Sample Category Title

Pivot (invalidation): 0.9930

Our preference Long positions above 0.9930 with targets at 0.9970 & 0.9990 in extension.

Alternative scenario Below 0.9930 look for further downside with 0.9910 & 0.9880 as targets.

Comment The break above 0.9930 is a positive signal that has opened a path to 0.9970.

Pivot (invalidation): 112.60

Our preference Long positions above 112.60 with targets at 113.20 & 113.40 in extension.

Alternative scenario Below 112.60 look for further downside with 112.30 & 112.00 as targets.

Comment The RSI calls for a new upleg.

Pivot (invalidation): 1.2830

Our preference Short positions below 1.2830 with targets at 1.2755 & 1.2700 in extension.

Alternative scenario Above 1.2830 look for further upside with 1.2880 & 1.2950 as targets.

Comment A break below 1.2755 would trigger a drop towards 1.2700.

Pivot (invalidation): 1.1400

Our preference Short positions below 1.1400 with targets at 1.1350 & 1.1320 in extension.

Alternative scenario Above 1.1400 look for further upside with 1.1420 & 1.1440 as targets.

Comment A break below 1.1350 would trigger a drop towards 1.1320.

Daily Pivots: (S1) 143.84; (P) 144.37; (R1) 144.73; More...

GBP/JPY is losing downside momentum as seen in 4 hour MACD. But with 145.99 minor resistance intact, further decline is in favor to 142.76 support first. Sustained break there will bring retest of 139.39/47 key support zone. On the upside, above 145.99 support turned resistance could bring stronger rebound. But near tem outlook will be neutral at best as long as 149.70 key resistance holds.

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) would 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.

The GBP/USD is expected to make a bullish bounce back towards the top of the triangle pattern unless price breaks below the support line (green). The Fibonacci levels of wave E vs D could act as potential resistance levels.

The GBP/USD has completed or is close to completing a wave C (green) within waveB (blue). A bullish bounce is expected if price indeed completes the bullish ABC (blue) zigzag correction.

DAX has broken below Oct 26 low (11051) and suggests that the Index has resumed the decline lower. We are calling the decline from July 27 high (12886.83) as a triple three Elliott Wave Structure where decline to 11051.04 low on Oct 26 ended Intermediate wave (Y) and bounce to 11692.91 high on Nov 2 ended second Intermediate wave (X).

Down from 1162.91, short term Elliott Wave view suggests that the decline has resumed with the break below Intermediate wave (Y) at 11051.04. Structure of the decline is unfolding as an impulse Elliott Wave where Minute wave ((i)) ended at 11310.72, Minute wave ((ii)) ended at 11566.79, and Minute wave ((iii)) ended at 11009.25. Internal of Minute wave ((i)) unfolded as a 5 waves leading diagonal while the internal of Minute wave ((iii)) unfolded as 5 waves impulse of lesser Minutte degree.

Currently Minute wave ((iv)) rally is in progress and while the bounce fails below 11692.91, we expect Index to extend lower. We don't like buying the Index and expect rally to fails in 3, 7, or 11 swing as far as pivot at Nov 2 high (11692.91) stays intact. DAX 1 Hour Elliott Wave Chart

Daily Pivots: (S1) 127.81; (P) 128.43; (R1) 128.85; More....

Intraday bias in EUR/JPY remains neutral for the moment. As long as 130.14 resistance holds, deeper decline is in favor in the cross. Below 127.49 will target 126.63 support first. Break there will resume whole fall from 133.12 and target 124.08/89 support zone. On the upside, however, break of 130.14 will resume the rebound from 126.63 towards 133.12 resistance.

In the bigger picture, as long as 124.08 key resistance turn supported holds, larger up trend from 109.03 (2016 low) is still in progress. Firm break of 137.49 structural resistance will target 141.04/149.76 resistance zone next. However, decisive break of 124.08 will argue that such rise from 109.03 has completed and turn outlook bearish. In that case, deeper fall would be seen to 61.8% retracement of 109.03 to 137.49 at 119.90.

Here are the latest developments in global markets:

FOREX:The dollar index is somewhat lower on Wednesday (-0.17%), giving back some of the significant gains it recorded in the previous session as investors sought the safety of the world’s reserve currency. The loonie was the biggest underperformer, weighed down by another plunge in oil prices. Meanwhile, the yen and the franc attracted inflows amid the broad-based risk aversion, though both are today, as sentiment seems to have turned around somewhat.

STOCKS: US markets recorded another day of substantial losses, with the retail, technology, and energy sectors bearing the brunt of the pain. The Dow Jones (-2.21%) suffered the most, while the S&P 500 (-1.82%) and the Nasdaq Composite (-1.70%) did not fare much better. That being said, the mood seems to have turned around somewhat, as futures tracking the Dow, S&P, and Nasdaq 100 are all pointing to a higher open today. Asia was mixed on Wednesday, with Japanese indices falling but Chinese benchmarks ticking higher. In Europe, all the major indices were set to open higher today, futures suggest.

COMMODITIES: The carnage in crude accelerated, with WTI falling by a dramatic 6.6% on Tuesday, while Brent plunged 6.4%, with both benchmarks touching one-year lows. Prices rebounded somewhat today, with WTI settling near $54.50 per barrel and Brent at $63.40/barrel. The trigger appears to have been a combination of Trump ruling out sanctions against Saudi Arabia, subdued risk sentiment, and a stronger dollar. In precious metals, gold edged lower yesterday after testing the downtrend line drawn from the peaks of May, as a surging dollar rendered the dollar-denominated metal more expensive to buy for investors using foreign currencies.

Major movers: Risk aversion intensifies; dollar outperforms on haven demand

Market sentiment remained in the doldrums for a second session on Tuesday, with sustained weakness in heavyweight tech names – including the likes of Apple (-4.78%) – dragging the broader markets lower, even in the absence of any fresh catalyst or news. Soft earnings and downbeat forecasts by major retailers didn’t help the situation, nor did the renewed carnage in oil prices, which pushed energy shares lower. As is typical in such an environment, commodity-linked currencies such as the loonie, aussie, and kiwi all underperformed, while haven assets such as the yen and Swiss franc saw an influx of demand as investors turned defensive.

Strikingly, the US dollar was the star performer in the session, outshining both the yen and franc as haven buying trumped the recent concerns that the Fed may be set to pause its hiking cycle. The move once again underscores that the greenback is currently an “all weather currency” in the sense that it can shine both in risk-off sessions given its status as the world’s reserve asset, and on risk-on days as wide yield differentials brighten its carry appeal. Separately, after the latest dovish repricing of Fed rate-hike expectations in 2019, the dollar seems more attractive from a risk-reward perspective, as the bar to price out even more hikes – and hence weaken the currency – is probably quite high; it may require concrete evidence of a US slowdown.

In the UK, Brexit continues to dominate, as the testimony by BoE Governor Carney yesterday delivered nothing new. The pound has been quiet as Brexit headlines have taken a break over the past two days; attention remains on whether or not a Tory leadership challenge against May will be triggered, especially in light of the DUP’s support for her government fading.

Elsewhere, the loonie crumbled under the weight of collapsing oil prices, touching a fresh 5-month low against the powerful greenback. The catalyst behind the latest wave of selling in crude was seemingly the US President, who said his nation has no intention of sanctioning the Saudi regime for the killing of journalist Khashoggi, easing worries around supply disruptions. It remains to be seen whether speculation for an OPEC supply cut will be enough to put a floor under prices as we draw nearer to the December 6 OPEC meeting.

Day ahead: Italian budget in focus; US durable goods orders due; tech rout eyed

Wednesday’s calendar features numerous releases out of the US, including on durable goods orders. However, perhaps having the greatest capacity to move FX markets will be developments having to do with Italy’s budget, with a European Commission report on the matter due later today. Meanwhile, any headlines on Brexit or the US-China trade dispute will also be attracting interest.

The European Commission will be releasing its report on all eurozone draft budgets later today (around 1100 GMT). The Commission may have no choice but identify Italy as violating the budget rules, which would constitute the first step in the EU’s excessive deficit procedures, something that in turn could theoretically result in fines. The Italian government’s response to the report may prove instrumental in determining the direction in the single currency – a confrontational stance is expected to lead to a weaker euro, and vice versa.

On the data front, monthly data on durable goods orders and weekly jobless claims are due out of the US at 1330 GMT. These don’t tend to move the greenback much, though given some unexpected weakness in recent figures, they’re getting some additional attention. A disappointment could fuel the narrative of a Fed that will slow down its rate normalization plans in 2019, thus hurting the US currency.

Also out of the US will be monthly readings on existing home sales and the University of Michigan’s final survey on November’s consumer sentiment. These will be made public at 1500 GMT. Earlier, Canadian wholesale trade numbers for September are slated for release at 1330 GMT.

On trade, the US Trade Representative’s office accusing China of continuing to support intellectual property theft may be an indication that next week’s meeting between Presidents Trump and Xi at the G20 summit will not provide much of a breakthrough in the trade relations of the two economic superpowers.

In equities, the tech rout that among others saw Apple lose roughly a quarter of its value relative to its October peak is generating interest. Does this provide an opportunity to buy the dip or do the fundamentals justify an extension of the selloff?

After yesterday’s massive decline in oil prices, traders will be paying attention to EIA numbers on US crude stocks due at 1530 GMT. Those are projected to show an inventory buildup of around 2.9 million barrels during the week ending November 16, marking the ninth straight weekly increase, following a rise by approximately 10.3m in the previously tracked week.

Lastly, Japan will be on the receiving end of inflation prints during Thursday’s Asian session (Wednesday at 2330 GMT).

Technical Analysis: EURUSD looks bullish-to-neutral in the short term

EURUSD has retreated a bit after touching a two-week high of 1.1472 on Tuesday. The Tenkan- and Kijun-sen lines remain positively aligned in support of a positive bias in the short term, though they have both flatlined, overall projecting a bullish-to-neutral picture.

An easing of worries over Italy’s budget is likely to see the pair heading higher. Immediate resistance to gains could take place around the current level of the Tenkan-sen at 1.1415. Higher, yesterday’s high of 1.1472 would be eyed; the 1.15 handle lies not far above, while the area around this yesterday’s peak captures a couple of tops from the recent past as well. More bullish movement would turn the attention to the 1.1549 top.

Growing concerns over an EU-Italy clash are expected to exert selling pressure on EURUSD. Support to declines could take place at 1.1365, the 100-period moving average line; the zone around this includes the Kijun-sen (1.1371), the Ichimoku cloud top (1.1357) and a bottom from previous weeks (1.1352). Not far below lies the 50-period MA at 1.1338, while lower still, the 1.13 handle would come within scope – this is also where the Ichimoku cloud bottom is roughly situated.

US data due later on Wednesday can also lead to some positioning on the pair.

Daily Pivots: (S1) 1.1284; (P) 1.1335; (R1) 1.1366; More...

EUR/CHF's correction from 1.1501 resumed and dipped to as low as 1.1303. While further decline cannot be ruled out, downside should be contained by 61.8% retracement of 1.1173 to 1.1501 at 1.1298 to bring rebound. On the upside, break of 1.1433 resistance will argue that the pull back has completed. Further rise should be seen back to 1.1501 resistance first. Break of 1.1501 will revive the case of bullish trend reversal. However, sustained break of 1.1298 will turn focus back to 1.1173 low.

In the bigger picture, price actions from 1.2004 medium term top is seen as a correction only. Downside should be contained by support zone of 1.1198 (2016 high) and 61.8% retracement of 1.0629 to 1.2004 at 1.1154 to complete it and bring rebound. This cluster level is in proximity to long term channel support (now at 1.1261) too. A break of 1.2 key resistance is still expected in the medium term long term. However, sustained break of the mentioned support zone will mark reversal of the long term trend. In that case, 1.0629 key support will be back into focus.