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Daily Pivots: (S1) 0.9929; (P) 0.9944; (R1) 0.9960; More...

USD/CHF is staying in consolidation above 0.9908 temporary low. Intraday bias remains neutral first. Another fall could be seen with 1.0006 minor support intact. Break of 38.2% retracement of 0.9541 to 1.0128 at 0.9904 will target 0.9848 key support level. On the upside, above 1.0006 minor resistance will indicate that the pull back has completed. Intraday bias will be turned back to the upside for retesting 1.0128 high.

In the bigger picture, the pullback from 1.0067 has completed at 0.9541 already. And rise from 0.9186 is likely resuming. Firm break of 1.0067 will pave the way to retest 1.0342 key resistance. We'd be cautious on strong resistance from there to limit upside to bring another medium term fall to extend long term range trading. However, break of 0.9848 near term support will dampen this view and bring deeper decline back to 0.9541 support and possibly below.

Daily Pivots: (S1) 1.1358; (P) 1.1392; (R1) 1.1418; More.....

Intraday bias in EUR/USD remains neutral at this point. As long as 1.1499 resistance holds, outlook remains bearish. On the downside, break of 1.1358 minor support should bring retest of 1.1215 low first. Break will resume medium term down trend. However, on the upside, firm break of 1.1499 will indicate near term reversal and turn outlook bullish for 1.1814 resistance again.

In the bigger picture, down trend from 1.2555 medium term top has just resumed and should target 61.8% retracement of 1.0339 (2017 low) to 1.2555 at 1.1186 next. Sustained break there will pave the way to retest 1.0339. On the upside, break of 1.1814 resistance is now needed to confirm medium term bottoming. Otherwise, outlook will stay bearish in case of strong rebound.

Daily Pivots: (S1) 1.2754; (P) 1.2787; (R1) 1.2810; More...

Intraday bias in GBP/USD remain neutral first and outlook is unchanged. Price actions from 1.2661 are viewed as a consolidation pattern. On the downside, break of 1.2692 will bring retest of 1.2661 first. Firm break there will resume the larger down trend from 1.4376. On the upside, sustained break of 4 hour 55 EMA (now at 1.2864) could extend the consolidation with another rise. But even in case of strong rally, upside should be limited by 1.3316 fibonacci level to bring down trend resumption eventually.

In the bigger picture, whole medium term rebound from 1.1946 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA. The structure and momentum of the fall from 1.4376 argues that it's resuming long term down trend. And this will be the preferred case as long as 38.2% retracement of 1.4376 to 1.2661 at 1.3316 holds. However, firm break of 1.3316 would bring stronger rebound to 61.8% retracement at 1.3721. And, the eventual depth of the fall from 1.4376, and the chance of hitting 1.1946 low, will depend on the strength of the interim corrective rebound from 1.2661.

Daily Pivots: (S1) 1.3200; (P) 1.3260; (R1) 1.3291; More...

USD/CAD retreated sharply after hitting 1.3318 and intraday bias is turned neutral first. Some consolidations would be seen. But near term outlook remains bullish as long as 1.3141 support holds. On the upside, above 1.3318 will extend the rise from 1.2781 to 1.3385 resistance. Decisive break there will resume larger up trend from 1.2061 to 1.3685 fibonacci level next.

In the bigger picture, current development revives the case that corrective fall from 1.3385 has completed at 1.2781 already. And whole up trend from 1.2061 (2016 low) is ready to resume. Break of 1.3385 will target 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685. This will now be the favored case as long as 1.2781 support holds.

Daily Pivots: (S1) 0.7219; (P) 0.7248; (R1) 0.7295; More...

AUD/USD is staying in range of 0.7164/7325 and intraday bias remains neutral first. On the upside, sustained break of 0.7314 resistance will indicate medium term reversal. Further rally should be seen to 38.2% retracement of 0.8135 to 0.7020 at 0.7446 next. Nevertheless, failure to sustain above 0.7314, and break of 0.7164 support will retain bearishness and turn bias back to the downside for retesting 0.7020 low.

In the bigger picture, AUD/USD's decline from 0.8135 could have completed at 0.7020 already, ahead of 0.6826 key support (2016 low). Break of 0.7314 will confirm and bring strong rebound. But for now, we'd expect strong resistance from 0.7500 support turned resistance to limit upside. Medium term fall from 0.8135 should extend to take on 0.6826 low at a later stage.

Trading is rather subdued in Asian session today as the markets are already in holiday mood. For now, Euro is trading generally higher, followed by Sterling. Australia and New Zealand turned soft again. But most pairs and crosses are just bounded inside yesterday's strength. For the week, Swiss Franc remains the strongest one, followed by Dollar and then Yen. Aussie and Kiwi are the worst performing ones.

The rebound in US stocks overnight was rather disappointing. DOW hit day high at 24669.79 but eventually closed flat at 24464.69. S&P 500 rose 0.3% to 2649.93. NASDAQ closed up 0.92% at 6972.25. These three indices did nothing to indicate they're bottoming in near term and recent selloff will likely extend after the US markets are back from holiday. Treasury yields, closed slightly higher with 10 year yield rose 0.013 to 3.061.

Asian markets are mixed. Nikkei is currently up 0.62%. Hong Kong HSI fluctuate between gains and losses in very tight range. China SSE is down -0.45%. Singapore Strait Times is up merely 0.10%. WTI crude oil is consolidating at around 54.4. Gold is in tight range around 1225.

ECB accounts as the focus of the day

ECB accounts of October 25 monetary policy meeting will be the main focus today. ECB is so far sticking with its plan to end asset purchase program after December. Also, interest rates are expected to stay at current level at least through summer of 2019. There is little chance of any hint in the accounts for a change in the policy path. The forward guidance is also flexibility enough that there is no need for the slightest change.

Nevertheless, Eurozone economy is clearly slowing down. Q3's dismal 0.2% growth, as well as the contraction in Germany, are generally viewed as due to temporary factors. But we'd still be eager to see if ECB policy makers are maintaining this view.

Also, a number of ECB officials are lining up for speeches today. Most notably, there could be some comments on monetary policy from Bundesbank Jens Weidmann, Dutch central bank Klass Knot, Bank of Italy Ignazio Visco and Luxembourg central bank Yves Mersch.

UK May: Some further issues needed resolutions on future relationship with EU

UK Prime Minister Theresa May concluded her meeting with European Commission President Jean-Claude Juncker without any breakthrough. And she's set to fly to Brussels again on Saturday to continue with the work. The objective of the talk now is for finalizing a political blueprint on future relationship between the UK and the EU after Brexit.

May told BBC after the meeting that "I will be returning on Saturday for further meetings, including again with President Juncker, to discuss how we can ensure that we can conclude this process in the way which is in interests in all our people." And, "there were some further issues that needed resolution, we've given further direction to our negotiators this evening. I believe we've given sufficient direction for them to be able to resolve those remaining issues. An European Commission spokesman said that "Very good progress was made in the meeting between President Juncker and Prime Minister Theresa May. Work is continuing."

UK Hammond: Extension to Brexit transition has to be proportional

UK Chancellor of Exchequer Philip Hammond warned again yesterday that it the Brexit deal is not approved by Parliament, "we will have a political chaotic situation". And, "we don't know what the outcome of that will be".

On extension to the transition period, Hammond emphasized that "it would have to be proportional". And, " it certainly wouldn't be more than that, but it would depend on what we were getting in return." He added "When we look at the economy and the operation of the economy, getting a smooth exit from the European Union, doing this in an orderly fashion, is worth tens of billions of pounds to our economy."

Looking ahead

The economic calendar is light today with US on Thanksgiving holiday. Nevertheless, ECB monetary policy meeting accounts are important and would be watched. Eurozone will also release consumer confidence.

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.7219; (P) 0.7248; (R1) 0.7295; More...

AUD/USD is staying in range of 0.7164/7325 and intraday bias remains neutral first. On the upside, sustained break of 0.7314 resistance will indicate medium term reversal. Further rally should be seen to 38.2% retracement of 0.8135 to 0.7020 at 0.7446 next. Nevertheless, failure to sustain above 0.7314, and break of 0.7164 support will retain bearishness and turn bias back to the downside for retesting 0.7020 low.

In the bigger picture, AUD/USD's decline from 0.8135 could have completed at 0.7020 already, ahead of 0.6826 key support (2016 low). Break of 0.7314 will confirm and bring strong rebound. But for now, we'd expect strong resistance from 0.7500 support turned resistance to limit upside. Medium term fall from 0.8135 should extend to take on 0.6826 low at a later stage.

Economic Indicators Update

UK Chancellor of Exchequer Philip Hammond warned again yesterday that it the Brexit deal is not approved by Parliament, "we will have a political chaotic situation". And, "we don't know what the outcome of that will be".

On extension to the transition period, Hammond emphasized that "it would have to be proportional". And, " it certainly wouldn't be more than that, but it would depend on what we were getting in return." He added "When we look at the economy and the operation of the economy, getting a smooth exit from the European Union, doing this in an orderly fashion, is worth tens of billions of pounds to our economy."

UK Prime Minister Theresa May concluded her meeting with European Commission President Jean-Claude Juncker without any breakthrough. And she's set to fly to Brussels again on Saturday to continue with the work. The objective of the talk now is for finalizing a political blueprint on future relationship between the UK and the EU after Brexit.

May told BBC after the meeting that "I will be returning on Saturday for further meetings, including again with President Juncker, to discuss how we can ensure that we can conclude this process in the way which is in interests in all our people." And, "there were some further issues that needed resolution, we've given further direction to our negotiators this evening. I believe we've given sufficient direction for them to be able to resolve those remaining issues. An European Commission spokesman said that "Very good progress was made in the meeting between President Juncker and Prime Minister Theresa May. Work is continuing."

Stocks

Global indices have little room on the downside with supports coming up. While the supports hold, we could see a bounce in the coming weeks.

24250-24200 is the immediate support zone on the Dow (24464.69, -0.0039%). A bounce would take the index back towards 25500-26000 or even higher in the longer run.

While above 11000, a bounce could take Dax (11244.17, +1.61%) higher towards daily resistance near 11300. A break below 11000 would open up 10800 on the downside.

The Nikkei (21491.56, -0.074%) is trading lower today. A fall towards support at 21200 looks likely on the 3-day candles. Only on a break below 21200, if seen would we consider lower levels of 21000 to be tested. For now, we expect a bounce from 21200.

Shanghai (2646.73, -0.18%) is almost stable and is trading just below resistance at 2700. While above 2600, there could be scope of breaking above 2700 and heading higher in the medium term. Down channel is intact on the 3-day candles and indicates a fall towards 2550 or lower.

Resistances near 10800 and 36000 have held on Nifty (10600.05, -0.53%) and Sensex (35199.80, -0.77%) respectively. Immediate support is seen near 35000 which if holds could bring a bounce back towards 36000; else a fall towards 34500 or lower is possible. Nifty if breaks below 10600 and sustains, it could fall towards 10400. The indices look bearish for the near term.

COMMODITIES

News: OPEC is due to meet with major producers in Vienna next month, with Saudi Arabia proposing at least a 1mln barrel/day cut to stabilize prices.

Brent (63.24) and WTI (54.39) have fallen sharply breaking below our expected immediate supports near 65 and 55 respectively. We now look at crucial support at 62 on Brent and 51 on WTI to initiate a bounce and take the crude prices to higher levels gradually. Near term looks bearish towards respective support levels from where a bounce is expected soon.

Gold (1227.80) is holding below 1230 just now. A break above 1230 is needed to take it higher towards 1250. Watch price action near 1230 as a rejection from here, if strong could push it back towards 1210.

Copper (2.7860) is likely to hold below resistance zone of 2.85-2.80. A dip to 2.65 could be seen while below 2.85.

FOREX

Chances for Euro, Pound and Aussie to strengthen towards 1.145, 1.285 and 0.73 by early next week. Consequently, Rupee could also trade closer to 71.20.

Dollar Index (96.63) might just fall towards support on daily candles near 96.30 in the next 2-3 sessions and then rise from there again in the next week.

Euro (1.1398) came off after testing resistance (earlier support) on 3 day candles near 1.1472 and now has support near 1.137-1.138 (21 days MA). A break above 1.1405 could lead to an upmove to 1.145 while a break below 1.137 would lead towards 1.13-1.12. Looking at the Dollar Index, slight preference is for a break of 1.1405 towards 1.145.

Dollar Yen (112.98) might have resistance between 113.0-113.4 on daily candles, from where it might come off and resume its fall towards support near 112.25 in the next week. A break above 113.4 might negate the immediate fall towards 112.25.

Pound (1.2784) has immediate resistance on daily candles near 1.278-1.280, a break of which might take it towards higher resistance near 1.285-1.290 early next week. However, ultimately, it should again become bearish towards crucial support at 1.27.

Aussie (0.7252) : While it stays above support near 0.7225, it should again see a rise towards 0.730-0.734 by early next week. Alternatively, a break below 0.7225 would open up chances of a test of lower support near 0.720-0.717 by early next week. The bullish alternative is more preferred currently.

Euro Yen (128.78) has immediate resistance at 129.0-129.1 on daily candles which should push it down towards 127.5 over the next couple of weeks. Alternatively, a break above 129 would open up chances of a test of 130 early next week.

Dollar Rupee (Onshore Closing on 20th Nov: 71.455): Fall in Brent might just impart some strength to the Rupee making it trade close to 71.20. We broadly see a near-term range of 71.20-80 till early next week. Resolution of this range will set the trend for December. Two-way possibility for the medium term.

INTEREST RATES

US 10 Year yield (3.06%) : Chances of testing 3% has increased as the US 10 year seems to be struggling to rise back towards 3.10%. Crucial to see if this 3% support holds in the coming couple of weeks or not – since a break below 3% might keep US yields stable to bearish in the next 1-2 months. If 3% breaks, the next target would be lower support near 2.9%.

German 10 year yield (0.38%): Although there has been a slight rise in the German 10 year, preference is still tilted towards a possible downmove towards support near 0.30% in the near term, before an eventual rise from there back towards 0.5%.

The German-US 10 Year yield spread (-2.68%) might just break crucial resistance near -2.70% if the US 10 year breaks below 3%. The German-US 2 year spread (-3.39%) is almost breaking above the -3.40% resistance. A break of -2.70% by the 10 year spread and a break of -3.40% by the 2 year spread would both be significant and might point towards stability/bearishness in US yields in the near to medium term.

Japanese 10 year yield (0.10%) is testing crucial support at 0.10% and should see a bounce from here.

Key Highlights

• The Aussie Dollar declined sharply from 0.7337 and traded below 0.7260 against the US Dollar.
• There is a major bullish trend line in place with support at 0.7220 on the 4-hours chart of AUD/USD.
• The US Initial Jobless Claims figure for the week ending Nov 17, 2018 increased to 224K.
• Today, the Euro Zone Consumer Confidence for Nov 2018 (Prelim) will be released, which is forecasted to decline to -3.0.

AUDUSD Technical Analysis

After a major upward move, the Aussie Dollar found sellers near 0.7340 against the US Dollar. The AUD/USD pair traded as high as 0.7377 and later declined below 0.7300 and 0.7260.

Looking at the 4-hours chart, the pair declined heavily and even broke the 0.7240 support area. However, the decline was protected by the 0.7200 support and the 100 simple moving average (red, 4-hours).

The pair recovered above 0.7200 and the 38.2% Fib retracement level of the last decline from the 0.7337 high to 0.7201 low. If the pair continues to recover, the next resistance is near the 0.7260 level.

To move into a positive zone, the pair must break the 0.7285 resistance and the 61.8% Fib retracement level of the last decline from the 0.7337 high to 0.7201 low. On the other hand, if the pair fails to climb above 0.7285 and 0.7290, there could be a fresh bearish reaction.

On the downside, there is a decent support near 0.7215-20 and a major bullish trend line on the same chart. Should there be a daily close below 0.7215 and 0.7200, the pair could decline towards 0.7120 in the near term.

Fundamentally, the US Initial Jobless Claims figure for the week ending Nov 17, 2018 was released by the US Department of Labor. The market was looking for a decline from 216K to 215K.

However, the result was negative as there was an increase in claims to 224K. Moreover, the last reading was also revised up from 216K to 221K. The report added that:

The 4-week moving average was 218,500, an increase of 2,000 from the previous week’s revised average. The previous week’s average was revised up by 1,250 from 215,250 to 216,500.

Overall, the US Dollar came under pressure after the release, which could help AUD/USD, EUR/USD and GBP/USD in the short term.

Economic Releases to Watch Today

• Swiss Industrial Production for Q3 2018 (QoQ) – Forecast +7.4%, versus +7.6% previous.
• Euro Zone Consumer Confidence Nov 2018 (Preliminary) – Forecast -3.0, versus -2.7 previous.