Sample Category Title

Pivot (invalidation): 51.90

Our preference Short positions below 51.90 with targets at 50.60 & 50.10 in extension.

Alternative scenario Above 51.90 look for further upside with 52.70 & 53.40 as targets.

Comment The RSI lacks upward momentum.

Pivot (invalidation): 14.6000

Our preference Short positions below 14.6000 with targets at 14.5000 & 14.4500 in extension.

Alternative scenario Above 14.6000 look for further upside with 14.6500 & 14.7200 as targets.

Comment The RSI is mixed with a bearish bias.

Pivot (invalidation): 1248.00

Our preference Short positions below 1248.00 with targets at 1241.50 & 1237.50 in extension.

Alternative scenario Above 1248.00 look for further upside with 1251.00 & 1253.00 as targets.

Comment The RSI is mixed with a bearish bias.

EUR/USD

Current level - 1.1354

After failing to break the resistance level 1.1420, we expect the pair to test the support levels 1.1263 and 1.1213, which if being successful, will open the way to 1.1186.

USD/JPY

Current level - 113.13

The 112.20 support level is holding so far and we expect a correction to 113.65 resistance level with next target at 114.00.

GBP/USD

Current level - 1.2599

During the last few days the movement of the pair is strongly influenced by the Brexit deal news. After breaking down 1.2660 we expect another fall towards the support level 1.2340.

XAUUSD (1246.54): Gold prices extended declines off the highs close to the 1250 handle. Price action is seen rebound off the support level at 1242.25. We expect the gains to form a lower high potentially. This could signal correction to the lower support at 1227.10. If gold prices manage to post a strong rebound leading to further gains, we could expect gold to test the $1250 handle. However, the overall momentum is likely to ease near these levels.

GBPUSD (1.2577): The GBPUSD extended declines on the day as price action finally broke out from the lower support area of 1.2747 - 1.2683. The cable fell to lows of 1.2511 before pulling back higher. However, the Stochastics oscillator is signaling that the decline is oversold and could potentially trigger a move to the upside. The GBPUSD could be seen retesting the breached support area to establish resistance. If the resistance fails to give way to the gain, we expect the GBPUSD to maintain the downside in price

Daily Pivots: (S1) 141.15; (P) 142.40; (R1) 143.57; More...

GBP/JPY recovers today but with 142.97 minor resistance intact, intraday bias stays on the downside for 139.29/47 key support zone. On the upside, above 142.97 minor resistance will turn bias neutral and bring consolidation first, before staging another decline.

In the bigger picture, as long as 139.29 cluster support (50% retracement of 122.36 to 156.59 at 139.47) holds, up trend from 122.36 (2016 low) could still extend beyond 156.69 high. However, decisive break of 139.29/47 will suggest that such up trend is completed and turn outlook bearish. In that case, next target is 61.8% retracement at 135.43.

EURUSD (1.1368): The EURUSD currency pair is seen maintaining the consolidation near the current levels. Price briefly broke past the falling trend line only for the gains to be capped near the resistance level of 1.1435. This promptly resulted in the common currency posting declines and falling back below the trend line. The sideways range within 1.1435 - 1.1315 remains in play as a result. We expect the EURUSD to retest the support at 1.1315 once again potentially. A breakout from this level is needed for the currency pair to establish the next direction in the trend.

The U.S. Dollar extended gains on Monday amid a somewhat slow trading day and lack of any clear fundamentals to push the USD higher. Gold prices retreated from Friday's highs, and it was a similar story for the Euro currency as well.

GDP data from the UK showed a monthly increase of 0.1% matching estimates. This came amid the previous month showing that the GDP flatlined. Other economic data over the day included manufacturing production which fell 0.9% which was worse than the forecasts of a flat print. Construction output fared modestly better, falling just 0.2% against estimates of a 0.4% decline.

Industrial production was down by 0.6%, more than the forecasts of a 0.4% decline. Brexit continued to hog the limelight as the British Prime minister, Theresa May called off the scheduled Brexit vote to be held in the UK Parliament tomorrow. The sterling fell amid renewed concerns of a no-Brexit deal.

In the NY trading session, Canada's building permits fell by 0.2% on the month, in line with estimates. This comes after building permits rose 0.4% the month before.

Looking ahead, the economic data for today is relatively quiet. The European trading session will see the UK's labor market data coming out. Average earnings index is expected to rise 0.2% on the month, marking a steady pace of increase. The unemployment rate is expected to remain steady at 4.1%, unchanged from the previous period.

The ZEW economic sentiment report from Germany is forecast to show the index in the sentiment falling to -25 from 24.1 previously. This would mark a continued pessimistic outlook among German business firms. The Eurozone's ZEW economic sentiment report is also due and is expected to fall to -23.2 from -22.0 previously.

The NY trading session will see the producer prices data. PPI is expected to remain flat for November while the core PPI is expected to rise 0.1%. This marks a modest increase compared to the 0.5% gain posted previously.

• Rates: Risk sentiment remains very fragile
  Market tensions finally eased somewhat on bond markets yesterday, but this morning Asian trading shows that risk sentiment is still very fragile. ECB and Fed meetings appear on investors' radars and could keep them sidelined following the recent sharp dovish repositioning. We continue to keep a close eye at 2.78%/2.8% support in the US 10-yr yield.
• Currencies: Slightly positive yet fragile risk environment to support euro?
  The lack of important economic data suggests sentiment will be key for markets today. A mildly positive but fragile risk environment favours the euro over the dollar. We anticipate the upward trend to hold within the established EUR/USD 1.12/15 range. Sterling remains in the defensive

The Sunrise Headlines

• US stock markets closed yesterday's session in green after they paired intraday losses of close to 2%. Asian bourses opened in red with Chinese indices flat on signs that US-China trade talks are moving along.
• US Treasury Secretary Steve Mnuchin and Chinese VP Liu He discussed the road map for the next stage of trade talks between the two countries, in a sign both parties remain talkative despite the Huawei debacle.
• French President Macron promised a series of measures in an effort to calm the ‘gilets jaunes' that has put France in a deadlock for weeks. Among others, he will increase the minimum wage and overtime work will no longer be taxed.
• UK PM May starts a tour of European capitals today after delaying the Brexit Parliament vote. The EU already signalled to be open to give more assurances on the Irish backstop, but it won't renegotiate the deal. May meets Juncker tonight.
• Australia's housing prices continue to decline as the House Price Index printed -1.5% (QoQ) and -1.9% (YoY), as credit curbs and nervous buyers are postponing purchases.
• The Indian Congress party is set to win key state polls in India, hinting Indian PM Modi's ruling Bharatiya Janata Party is set for a rare electoral defeat. The blow follows the resignation of Reserve Bank of India's governor Patel yesterday.
• Today's economic calendar contains the November PPI's in the US, the ILO unemployment rate (3mths) for October in the UK and the ZEW Survey expectations for December. ECB's de Guindos speaks in Frankfurt

Currencies: Slightly Positive Yet Fragile Risk Environment To Support Euro?

Positive yet fragile risk sentiment to support euro?

Friday's US equity sell-off, slumping Fed hiking expectations and the political tensions between China and the US weighed on investors' sentiment yesterday. The dollar wasn't able to profit and even lost a few ticks against the euro. The common currency received some support from better than expected German foreign trade data. EUR/USD briefly touched the 1.1440 area but went south afterwards during technical trade. The move accelerated after UK Prime Minister May decided to pull the brexit vote in Parliament to avoid a quasi certain defeat. Euro weakness pushed EUR/USD to 1.1356, down from 1.1379. USD/JPY showed a stark rebound from intraday lows to close at 113.14.

Asian risk sentiment turned slighty for the better following a statement of Liu He, but remains very fragile. The Chinese Vice Premier said he spoke with US Treasury Secretary Mnuchin and Trade Representative Lighthizer to exchange views on a timetable and road map for future trade talks. Chinese stocks are trading in light green, USD/CNY dropped below 6.91 again. The news is tentatively positive for EUR/USD also. USD/INR rocketed to 72.5 before easing to 71.9 after India's central bank governor Ujrit Patel resigned unexpectedly.

US's small business optimism is expected to ease further from 107.4 to a still lofty 107. Producer prices are worth keeping an eye on given last month's unexpected sharp increase. Headline PPI probably flatlines after increasing a strong 0.6% in October. Supercore PPI (excluding food, energy and trade) however, is likely to show building inflationary pressures. Germany's ZEW survey expectations is expected to fall further from -24.1 to -25.0. Risks are to the downside given the poor equity performance. Sentiment will probably remain today's most important market driver however. A slightly better risk sentiment currently favours the euro after yesterday's hit. We expect a modest drift north of EUR/USD within the 1.12-15 trading range.

Sterling took a hit yesterday following rumours and eventually the confirmation by May the crucial brexit vote is being postponed. The PM seeks more EU concessions in an attempt for her Parliament to swallow the bitter Irish backstop pill. The news propelled EUR/GBP to an intraday high close to 0.91 before trading stable at 0.904. These latest developments illustrate the difficult road ahead. There is no reason to swim against the current sterling tide. We expect the pound to remain in the defensive for the foreseeable future.

A slightly better risk sentiments currently favours the euro over the dollar. Move upwards to hold