Sample Category Title

BTCUSD formed a fresh one-year trough today and is set to complete the eighth negative day in a row. The RSI and the MACD have both weakened, with the former dropping even lower in the oversold zone and the latter easing below its red signal line. Downside risks persist as both indicators continue to fluctuate in bearish territory; the RSI below 30 and the MACD below zero.

Should the market extend losses, support could be met around the 4910 region, taken from the lows on October 2017. A significant leg below this area could send prices towards the 4460 support, identified by the one-year inside peak.

On the flip side, if the pair bounces up and surpass the 5167 barrier, resistance could be met at the mid-level of Bollinger band near 5520. The next immediate hurdle is coming from the 5580 barrier, identified by the minor top on November 16. Steeper increases, could drive bitcoin north towards 5750, paring some losses of the preceding week.

In the short-term, the bearish phase remains in play especially when BTCUSD dropped below the 6030 support, which overlaps with the 50-simple moving average (SMA) and the upper Bollinger Band.

Daily Pivots: (S1) 1.1351; (P) 1.1387; (R1) 1.1452; More.....

No change in EUR/USD's outlook. While recovery from 1.1215 might extend, it's seen as a corrective move. Hence, upside should be limited by 1.1499 resistance. On the downside, below 1.1321 minor support will turn bias to the downside for 1.1215 and then 1.1186. However, 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) 1.2756; (P) 1.2817; (R1) 1.2885; More...

Intraday bias in GBP/USD remains neutral at this point. Price actions from 1.2661 are viewed as a consolidation pattern. 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 1.2913) 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) 112.41; (P) 113.04; (R1) 113.43; More..

Intraday bias in USD/JPY remains on the downside at this point. Fall from 114.20 is in progress for 113.37 support and possibly below. Such decline is seen as the third leg of the consolidation pattern from 114.54. Downside should be contained by 38.2% retracement of 104.62 to 114.54 at 110.75 to bring rebound. On the upside, above 113.30 minor resistance will turn bias back to the upside for 114.54/73 key resistance zone.

In the bigger picture, corrective fall from 118.65 (2016 high) should have completed with three waves down to 104.62. Decisive break of 114.73 resistance will likely resume whole rally from 98.97 (2016 low) to 100% projection of 98.97 to 118.65 from 104.62 at 124.30, which is reasonably close to 125.85 (2015 high). This will stay as the preferred case as long as 109.76 support holds. However, decisive break of 109.76 will dampen this bullish view and turns outlook mixed again.

AUDCAD turned positive after its bullish rally above the descending trend line, which has been holding since March 14, recording a three-month high of 0.9653. In the short-term, the technical indicators are signaling for overstretched movement as they point down. The RSI indicator is trying to slip below its overbought territory, while the %K line of the stochastic oscillator is ready for a bearish cross with the %D line.

On the downside, the area between the 38.2% Fibonacci retracement level of the downleg from 1.0240 to 0.9100, near 0.9535 and the 0.9490 support barrier could provide immediate support as it did the past week. Beyond this area, support could then run towards the 20-day simple moving average near 0.9440 at the time of writing before challenging the 23.6% Fibonacci region of 0.9365.

Should the price head north, it would be interesting to see whether the upside run could stop, probably around the 50.0% Fibonacci of 0.9670. If this is not the case, the market could jump above this level in order to meet the 0.9710 resistance. Even higher, the area between the 0.9800 handle and the 61.8% Fibonacci a few pips higher could be another target for investors.

To sum up, AUDCAD successfully surpassed the medium-term downtrend line, shifting the outlook to a more positive one.

Cable fell around 85 pips in mid-European session on Monday after being hit by latest Brexit comments, as PM May said she doesn't want to extend post Brexit transition period.
May wants transition to be completed before national election in May 2022.

Another negative signals for pound come from EU parliament official who said draft Brexit deal will not be renegotiated and rising number of those who show no confidence in PM May.

Cable shows indecision ahead of beginning of US session as Monday's action was so far strongly rejected on both sides. Strong bullish momentum underpins and keeps the downside protected for now, but upside attempts remain limited under key Fibo barrier at 1.2895 (38.2% of 1.3174/1.2722 bear-leg) as falling daily MA's in bearish setup weigh.

Near-term action remains volatile and looking for fresh news about Brexit, pair's recent key driver, to generate fresh direction signal.

The downside is expected to remain vulnerable while recovery attempts lack strength for stronger advance and would keep risk of retesting 1.2722 (last week's low, posted on Thursday) and 1.2695 (30 Oct low) loss of which would expose key med-term support at 1.2661 (2018 low, posted on 15 Aug).

On the other side, sustained break above 1.2895/1.2915 pivots (Fibo 38.2%/falling 20SMA) would provide relief.

Res: 1.2883; 1.2895; 1.2915; 1.2948
Sup: 1.2829; 1.2793; 1.2760; 1.2722

The Canadian dollar has posted losses in the Monday session. Currently, USD/CAD is trading at 1.3190, up 0.32% on the day. On the release front, it’s a quiet start to the week, with no Canadian indicators. The U.S. releases NAHB Housing Market Index, which is expected show little change. On Tuesday, the U.S. releases building permits and housing starts.

The simmering trade dispute between the U.S. and China shows no signs of being resolved anytime soon, which does not bode well for minor currencies like the Canadian dollar. An Asia-Pacific Economic Cooperation summit in Papua New Guinea ended in discord on Sunday, with leaders unable to agree on a final communique. U.S Vice President Mike Pence, who headed the U.S. delegation, was blunt in his remarks, saying that China would have to drastically change its trade practices before the U.S. would remove current tariffs on $250 billion in Chinese goods.

In the U.S., consumer inflation and spending numbers were strong in October. On Thursday, the U.S released retail sales reports. Retail sales rebounded with a strong gain of 0.7% in October, after a decline of -0.1% a month earlier. Core retail sales jumped 0.8%, after a gain of 0.1% in September. There was good news from the inflation front on Wednesday, as U.S consumer inflation numbers beat their estimates for October. The consumer price index posted a gain of 0.3%, its strongest gain since January. Core CPI, which excludes food and energy prices edged higher to 0.2%, marking a 3-month high. Both releases were in line with forecasts. Core CPI was 2.1% higher than a year ago. The solid consumer data means that the Fed remains on track to continue raising interest rates. The Federal Reserve holds its next policy meeting in December, with the odds of a December rate hike at 69%, slightly lower compared to last week.

Daily Pivots: (S1) 0.9965; (P) 1.0026; (R1) 1.0062; More...

USD/CHF's fall from 1.0128 extends to as low as 0.9957 so far but stays above 0.9952 support. Intraday bias remains neutral first. As long as 0.9952 support holds, further rally remains in favor. On the upside, above 1.0035 minor resistance will turn bias back to the upside for 1.0128. Decisive break there will resume the whole rise from 0.9186 and target 1.0342 key resistance next. However, firm break of 0.9952 will indicate short term topping and bring deeper fall back to 0.9848 support first.

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.

Swiss Franc is clearly the strongest one for today but the underlying reason is not apparent. There is no clear problem in emerging markets. Meanwhile, Euro is indeed following Swiss Franc, as another strong one. Sterling is a bit mixed as there is no new developments regarding May's leadership challenge, nor on Brexit. On the other hand, commodity currencies are back under pressure as last week's rally faded.

Technically, while EUR/GBP is strong, there is no follow through buying to break 0.8939 resistance yet. USD/CHF's fall now put 0.9952 support in progress and bring will be a strong sign of near term reversal. While the greenback looks bad against the Swissy, AUD/USD fails to sustain above 0.7314 resistance and dips back below 0.73 handle. Dollar might be rebounding there. Talking about Aussie, a focus will be 1.5693 minor resistance in EUR/AUD and break will suggest short term bottoming.

In other markets, major European indices are trading in black for now. FTSE is up 0.59%, DAX up 0.07% and CAC up 0.15%. German 10 year yield is up 0.022 at 0.392. Italian 10 year yield is up 0.018 at 3.508. German-Italian spread is over 310. Earlier in Asia, Nikkei rose 0.65%, Hong Kong HSI rose 0.72%, China Shanghai SSE rose 0.91% but Singapore Strait Times dropped -0.6%. A more interesting development was that 10 year JGB yield dropped -0.0112 to 0.095, back below 0.1%.

UK PM May: The Brexit deal takes back control over borders, money and laws

UK Prime Minister Theresa May said in the CBI annual conference that her Brexit agreement is "a good one for the UK" as it "fulfils the wishes of the British people as expressed in the 2016 referendum". And she emphasized the outcomes" she wanted to deliver.

Those include "Control over our borders, by bringing an end to free movement, once and for all"; "Control of our money, so we can decide for ourselves how to spend it, and can do so on priorities like our NHS"; "Control of our laws, by ending the jurisdiction of the European Court of Justice in the United Kingdom and ensuring that our laws are made and enforced here in this country."

CBI Fairbairn: Westminster living in own narrow world, extreme positions allowed to dominate

At the same occasion, CBI President John Allan said even though May's Brexit deal is "not perfect", it "opens a route to a long-term trade arrangement, it unlocks the transition period – the very least that companies need to prepare for Brexit". And more importantly, he emphasized that " it avoids the nightmare scenarios a no-deal departure, which would be a wrecking ball for our economy."

The group's Direct General Carolyn Fairbairn complained that "Westminster seems to be living in its own narrow world, in which extreme positions are being allowed to dominate." And, "the result is a high-stakes game of risk, where the outcome could be an accidental no-deal." She also acknowledged that May's deal is "not perfect" but a "compromise", a "hard-won progress". She urged that "this is not a time to go backward".

Responding to May's speech, Fairbairn urged that "future prosperity depends on getting the Brexit deal right. The overwhelming message from business is to make progress, don't go backwards." And, "We need frictionless trade, ambitious access for our world-beating services and a transition period which draws us back from the cliff edge. Anything less than that and jobs and investment could suffer."

UK Brady predicts PM May to win leadership challenge, but 48 threshold not even met yet

As of now, there is no confirmation of enough requests to trigger a no-confidence vote on May yet. Graham Brady, chair of the 1922 Committee, predicted even if there is a leadership challenge, May is going to win it. He said "it would be a simple majority, it would be very likely that the Prime Minister would win such a vote and if she did then there would be a 12-month period where this could not happen again, which would be a huge relief for me because people would have to stop asking me questions about numbers of letters for at least 12 months."

However, Brady is also dissatisfied with the May's Brexit deal and branded it as "tricky". He predicted that "it certainly doesn't look like the current agreement will get through [the Commons} unless either the agreement changes or the statement of the political declaration, the future relationship, gives considerably stronger grounds for optimism a bout the nature of the final deal."

Bundesbank: German economy to see fairly strong growth again in Q4

Bundesbank said in its monthly report that the -0.2% contraction in Q3 GDP in Germany was due to "a strong temporary one- off effect in the automotive sector." Meanwhile, "private consumption was temporarily absent as a driving force of the economy".

However, after that "setback" the German economy is "expected to see fairly strong growth again in the final quarter of 2018". Bundesbank said output and exports of motor vehicles are "expected to return to normal before the year is out". And, "manufacturing sector as a whole likewise looks set for marked growth." "Private consumption is expected to re- assume its role as a major economic driver". And, "the still outstanding income and labour market prospects are expected to again provide a boost."

Eurogroup Centeno hails Franco-German proposal of Eurozone budget a breakthrough

Eurogroup President Mario Centeno hailed that the Franco-German proposal of a Eurozone budget is "breakthrough" on reforms to be discussed among finance ministers in December. Centeno said "the contribution of France and Germany on the euro zone budget is an important topic for today's discussion," and, "it can be a sort of a breakthrough toward December".

Under the joint proposal, the objective of the Eurozone budget is to foster convergence and support reforms "in particular by co-financing growth-enhancing public expenditures such as investments, research and development, innovation and human capital". The pool of funds from dedicated taxes and individual state contributions would be put under a system of shared management. Members would then be allowed to used the fund for short-term investment plans with approvals from the European Commission. However, the budget would only be available to member states which abide by EUR rules, including deficit and debt.

Italy appears to be unhappy with the proposal as Deputy Prime Minister Matt eo Slovenia warned that "If, as it seems, it (the plan) damages Italy, it will never have our support."

ECB Villeroy de Galhau: No rush to set out length of reinvestment period after asset purchases end

ECB Governor Council member Francois Villeroy de Galhau said today that net asset purchase will "very probably end in December" as planned. However, he emphasized that "the end of our net asset purchases will not, however, mean the end of our monetary stimulus, far from it."

The pace of normalization would depend on incoming economic data. And three tools are at ECB's disposal, including reinvestment of assets, interest rate and refinancing operations. Villeroy would prefer slowing the rate of reinvestment only after the first interest rate hike, which wouldn't happen at least through the summer of 2019.

He also added that "we are not obliged to rush, as early as at our December meeting, to set out the precise length of our reinvestment period."

BoJ Kuroda: Mindful of banks' engagement in excessive risk taking

BoJ Governor Haruhiko Kuroda noted in a speech that amid a persistent low interest rate environment, "possible changes in the risk appetite and risk profile of banks ... is an issue" that BOJ is "highly attentive to". And, in the short term, "as downward pressure on banks' profits continues, we need to be mindful of the possible consequences of banks' engagement in excessive risk taking."

For banks with "abundant capital bases", risk taking "provides financial support to firms' production activities, thereby contributing to economic expansion". However, without appropriate risk management measures, continued decline in profits would lead to to "insufficient capital bases", and sharply higher credit costs. The stability of the financial system "could be threatened" in the event of a "large exogenous shock". Based on October's Financial System Report, the system has been maintaining stability on the whole.

On monetary, Kuroda repeated the same rhetoric that BoJ will continue with the current loose monetary policy. And, he's confident that BoJ inflation will eventually move back to target.

USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 0.9965; (P) 1.0026; (R1) 1.0062; More...

USD/CHF's fall from 1.0128 extends to as low as 0.9957 so far but stays above 0.9952 support. Intraday bias remains neutral first. As long as 0.9952 support holds, further rally remains in favor. On the upside, above 1.0035 minor resistance will turn bias back to the upside for 1.0128. Decisive break there will resume the whole rise from 0.9186 and target 1.0342 key resistance next. However, firm break of 0.9952 will indicate short term topping and bring deeper fall back to 0.9848 support first.

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.

Economic Indicators Update

The threat of British Prime Minister Theresa May possibly facing a no-confidence vote in her leadership will heavily influence the Pound this week.

Sterling has had it rough in recent days thanks to the combination of Brexit-related uncertainty and increased political instability in Westminster. With Theresa May’s Brexit battle set to rage on this week as she seeks backing from British business on the EU deal, Sterling could be in-store for another rollercoaster ride.

A scenario where a vote of no-confidence becomes reality may be detrimental to Brexit talks, as a change of leadership at such a crucial stage will only create further uncertainty – ultimately complicating negotiations. Even if Theresa May is able to overcome this trial, the next major test will be getting her deal through Parliament.

The GBPUSD edged slightly higher this morning after the EU’s chief Brexit negotiator proposed an extension on the Brexit transition period until 2022. Regardless of recent gains, the upside is likely to be limited by Brexit uncertainty and political risk in the UK. All in all, the Pound’s fortunes clearly hang on the Brexit outcome and this continues to be reflected in price actions. In regards to the technical picture, sustained weakness below the 1.2910 level is likely to inspire a move back towards 1.2750.

Commodity spotlight – Gold

One would have expected Gold to stand out today due to Brexit-related uncertainty, US-China trade tensions and a softening US Dollar.

However, we are seeing the opposite as the yellow metal struggles to keep above $1220 as of writing. The weakness observed in Gold could be the product of profit-taking and expectations of higher US interest rates. In regards to the technical picture, prices are trading within a bullish channel on the daily charts. Gold remains somewhat supported above $1,213, with an intraday breakout above $1,224 likely to inspire an incline towards $1,233.50.

Bitcoin tumbles to 13-month low

Bitcoin collapsed like a house of cards on Monday with prices tumbling below $5,300 as of writing. While most are blaming the Bitcoin cash “hard fork” as a key player behind Bitcoin’s weakness, technicals could have played a role. The weekly close under the $6,000 level was a bearish confirmation of further downside. The cryptocurrency has scope to extend losses if sellers are able to conquer the $5,000 level.