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Daily Pivots: (S1) 1.3155; (P) 1.3194; (R1) 1.3248; More...

Intraday bias in USD/CAD remains on the upside as rise from 1.2781 is in progress. Sustained trading above 1.3225 will confirm completion of choppy fall from 1.3385. Further rally should then be seen to retest 1.3385 high. On the downside, break of 1.3056 support is needed to indicate short term reversal. Otherwise, outlook will remain bullish in case of retreat.

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) 0.7208; (P) 0.7239; (R1) 0.7260; More...

Intraday bias in AUD/USD remains neutral at this point. On the upside, decisive break of 0.7314 will indicate medium term reversal. Further rally should be seen to 38.2% retracement of 0.8135 to 0.7020 at 0.7446 next. However, break of 0.7182 will suggests that rebound from 0.7020 has completed and maintain medium term bearishness. Intraday bias would be turned back to the downside for retesting 0.7020 low.

In the bigger picture, as long as 0.7314 resistance holds, fall from 0.8135 is tentatively treated as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 will target 0.6008 key support next (2008 low). However, firm break of 0.7314 will suggest that whole decline from 0.8135 has completed. And, the corrective pattern from 0.6826 (2016 low) is extending with another rising leg towards 0.8135 before completion.

Daily Pivots: (S1) 113.60; (P) 113.85; (R1) 114.05; More..

Further rise is expected in USD/JPY as long as 112.94 support holds, towards 114.54/73 resistance zone. As upside momentum isn't too convincing, we'd be cautions strong resistance from there to limit upside to bring another decline. Overall, rise from 104.62 is still in progress and decisive break of 114.73 will confirm resumption.

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.

Daily Pivots: (S1) 1.0037; (P) 1.0061; (R1) 1.0080; More...

Intraday bias in USD/CHF remains neutral with focus on 1.0094 resistance. Decisive break there and sustained trading above 1.0067 will confirm resumption of whole rise from 0.9541. USD/CHF should then target 1.0342 key resistance next. In case of another fall through 0.9952, downside should be contained by 38.2% retracement of 0.9541 to 1.0094 at 0.9883 to contain downside to bring rebound.

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, firm 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) 1.1311; (P) 1.1340; (R1) 1.1365; More....

Intraday bias in EUR/USD remains on the downside for 1.1300 key support. Decisive break there will resume the whole down trend from 1.2555 and target 1.1186 fibonacci level next. On the upside, though, break of 1.1499 resistance will turn bias back to the upside for another rebound. But after all, price actions from 1.1300 are seen as developing into a corrective pattern. So, down trend resumption would just be delayed.

In the bigger picture, price actions from 1.1300 is seen as a corrective pattern. Decisive break of 1.1300 will resume the down trend from 1.2555 to 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. In case the consolidation from 1.1300 extends, upside should be limited by 1.1814 and 38.2% retracement of 1.2555 to 1.1300 at 1.1779. to bring down trend resumption eventually.

Daily Pivots: (S1) 1.2928; (P) 1.3003; (R1) 1.3047; More...

GBP/USD's break of 1.2951 support now suggests that rebound from 1.2692 has already completed at 1.3174 already. Intraday bias is turned back to the downside for 1.2661/92 key support zone. Decisive break there will resume larger down trend from 1.4376. On the upside, in case of another rise, strong resistance should be seen at 1.3316 fibonacci level to limit upside to bring down trend resumption eventually. Overall, price actions from 1.2661 are seen as a consolidation pattern. Fall from 1.4376 will resume after such consolidation completes.

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.

Sterling opens the week sharply and broadly lower as it's getting less and less likely to complete a Brexit deal within November. Yen is the second weakest as Asian stocks recover mildly after last week's selloff. Meanwhile, Euro is following as the third weakest at the time of writing. On other hand, Canadian Dollar is the strongest one, helped by rebound in oil prices. New Zealand Dollar and Dollar follow. Nevertheless it's still early in the week and trading is usually subdued in Monday Asian session. The picture could change quite drastically as the day goes on.

In other markets, Nikkei is currently up 0.14%. Hong Kong HSI is up 0.31%. China Shanghai SSE is up 0.67%. But Singapore Strait Times is down -0.22%. 10 year JGB yield is nearly unchanged at 0.126. WTI crude oil is up 1.25%, pressing 61. Gold is back pressing 1210 after defending 1200 for now.

Technically, GBP/USD's break of 1.2951 minor support now suggests that rebound from 1.2692 has completed. Deeper fall is in favor to retest 1.2661/92 key support zone. Otherwise, there is no significant development so far. Focuses will stay on 1.1300 key support in EUR/USD and 1.0094 resistance in USD/CHF to confirm underlying strength of Dollar. Also, 128.60 in EUR/JPY and 146.28 in GBP/JPY will be watched to see if Yen is staging a near term reversal.

Sterling gaps down as UK PM May cancels emergency cabinet meeting on Brexit

Sterling gaps down the week and stays the weakest one as it's getting more unlikely for a Brexit deal within November. There was originally a planned emergency cabinet meeting today to approve a Brexit deal. But UK Prime Minister Theresa May dropped the plan due to resistance within her own cabinet. And it's unlikely for May to come up with something by Tuesday's regular meeting to secure enough support.

Irish backstop remains the sticky point. But now, it's over the right for UK to unilaterally exit the backstop. EU and Ireland have been explicit that UK cannot do that. On the other hand, it's unacceptable for some Tories that UK would have to be locked into the customs arrangement of the backstop forever.

Additionally, May is facing more rebellion even within the remain camp of the Tories. It's rumored that four more pro-Europe ministers are on the brink of resignation, following ex-transport minister Jo Johnson's departure last week.

Italy Tria to lower growth forecast to meet EU budget demand

Italy was requested by the European Commission to submit a new or revised draft budget plan (DBP) by November 13, tomorrow, after rejection. Ahead of that, it's reported that Economy Minister Giovanni Tria is considering to tweak the plan by lowering 2019 growth forecast.

According to Italian coalition government's own budget, 2019 GDP growth is projected at 1.5%. And, the budget deficit target is 2.4% of GDP. Tria has pledged last week to maintain the "pillars" of the budget. And clearly, the pillars don't necessarily include growth forecast.

La Repubblica reported that Tria could cut the growth estimate to 1.0%. On the other hand, Il Messaggero said he could cut the forecast to 1.2%. According to European Commission's own projections, Italy's growth would be at 1.2% in 2019. Also Tria might also look at automatic mechanism to cut public expenses to keep deficit under the 2.4% cap.

Japan PM Abe to boost infrastructure spending to ensure recovery continues

Japanese Prime Minister Shinzo Abe is pushing for more public infrastructure spending in the upcoming fiscal year. At the Council on Economic and Fiscal Policy (CEFP) meeting today, Abe requested his cabinets to draw out plans with focuses strengthening infrastructure to withstand earthquakes and frequent flooding.

Economy Minister Toshimitsu Motegi said after the CEFP that "the prime minister asked me to take firm measures to ensure that our economic recovery continues." Motegi added that Abe also said "public works spending program expected at the end of this year should be compiled with this point in mind."

A preliminary public works plan will be compiled by the end of this month and the final version would be ready by the end of the year.

WTI oil back above 60 as Saudi Arabia cuts oil exports starting Dec

WTI crude oil opened the week higher and is back above 60. Saudi Arabia announced during the weekend to cut oil exports by 500k bpd in December. Its Energy Minister Khalid Al-Falih said on Sunday that demand for Saudi oil is "tapering off" partly due to seasonal factors. And, he pledged that "we as responsible producers are going to work, and work hard, to balance the market within a reasonable corridor."

The OPEC+ also said in a post-meeting statement that it might need new strategies onwards. It said "the committee reviewed current oil supply and demand fundamentals and noted that 2019 prospects point to higher supply growth than global requirements." And, weaker global economic growth "could lead to widening the gap between supply and demand."

WTI crude oil topped at 77.06 back in early October but then persistently dropped to as low as 59.37 last week. A key factor driving the free fall was the erratic sanction policy of the US on Iran. Trump initially insisted to restrict all Iranian exports to the world. But it turned out that waivers were granted to eight countries on oil trade with Iran, including Taiwan.

Technically, today's recovery is so far not strong enough to warrant a change in near term down trend.

Economic data as main focuses of the week

The week starts with a light calendar today, with US and Canada on holiday today. Looking ahead, economic data will be the major focuses. In particular, US will release CPI and retail sales. UK will release employment, CPI and retail sales. Eurozone will release GDP and German ZEW. Australia will have wage price and employment; China will also have some growth data. Here are some highlights for the week.

• Tuesday: Australia NAB business confidence; German CPI final, ZEW ; Swiss PPI; UK employment;
• Wednesday: Australia wage price index; China retail sales, unemployment, fixed asset investment, industrial production; Japan industrial production, tertiary industry index; Germany GDP; Eurozone GDP, industrial production; UK CPI, PPI; US CPI
• Thursday: Australia employment; UK retail sales; Eurozone trade balance; US retail sales, Empire state manufacturing, Philly Fed manufacturing, import prices, jobless claims, business inventories
• Friday: New Zealand BusinessNZ manufacturing; Eurozone CPI final; Canada manufacturing sales, foreign securities purchases; US industrial production

GBP/USD Daily Outlook

Daily Pivots: (S1) 1.2928; (P) 1.3003; (R1) 1.3047; More...

GBP/USD's break of 1.2951 support now suggests that rebound from 1.2692 has already completed at 1.3174 already. Intraday bias is turned back to the downside for 1.2661/92 key support zone. Decisive break there will resume larger down trend from 1.4376. On the upside, in case of another rise, strong resistance should be seen at 1.3316 fibonacci level to limit upside to bring down trend resumption eventually. Overall, price actions from 1.2661 are seen as a consolidation pattern. Fall from 1.4376 will resume after such consolidation completes.

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.

Economic Indicators Update

The CFTC Commitments of Traders report in the week ended November 6 shows that all major currencies (except USD) remained in NET SHORT positions. Speculative longs on USD index fell -1 564 contracts while shorts declined -2 323, sending the NET LENGTH higher, by +759 contracts, to 40 282 contracts. The greenback weakened against major currencies during the reporting week with the exception of Japanese yen.

NET SHORTS for both European currencies increased. For EUR futures, speculative long positions fell -8 718 contracts while shorts rose +5 463 contracts, deepening NET SHORT to 46 843 for the week. NET SHORT for GBP futures decreased -4 317 contracts to 56 799.

On safe-haven currencies, Net SHORT for CHF futures rose +5 426 contracts to 19 948 while that for JPY futures dropped -2 498 contracts, to 89 122 during the week. Bets on the latter gained on both sides.

While staying in NET SHORT, such positions were trimmed in all commodity currencies . NET SHORT for AUD futures slipped -3 967 contracts to 66 445, while that for NZD futures sank - 9 305 contracts to 25 726. NET SHORT for CAD futures plunged -7 023 contracts to 2 632.

WTI crude oil opened the week higher and is back above 60. Saudi Arabia announced during the weekend to cut oil exports by 500k bpd in December. Its Energy Minister Khalid Al-Falih said on Sunday that demand for Saudi oil is "tapering off" partly due to seasonal factors. And, he pledged that "we as responsible producers are going to work, and work hard, to balance the market within a reasonable corridor."

The OPEC+ also said in a post-meeting statement that it might need new strategies onwards. It said "the committee reviewed current oil supply and demand fundamentals and noted that 2019 prospects point to higher supply growth than global requirements." And, weaker global economic growth "could lead to widening the gap between supply and demand."

WTI crude oil topped at 77.06 back in early October but then persistently dropped to as low as 59.37 last week. A key factor driving the free fall was the erratic sanction policy of the US on Iran. Trump initially insisted to restrict all Iranian exports to the world. But it turned out that waivers were granted to eight countries on oil trade with Iran, including Taiwan.

Technically, today's recovery is so far not strong enough to warrant a change in near term down trend.

According to the CFTC Commitments of Traders report for the week ended November 6,  NET LENGTH for crude oil, heating oil and gasoline futures all continued to drop. Oil prices slumped during the reporting week, with the front-month WTI crude oil contract pluning -6% while the Brent contract was down -4.98%. Speculative long positions of crude oil futures declined -11 109 contracts, while shorts soared +17 746 contracts, resulting in a fall in NET LENGTH, by -28 855 contracts, to 403 783 contracts. For refined oil products, Net LENGTH for heating oil futures plunged -5 241 contracts to 28 966, while that for gasoline was down -1 764 contracts to 86 310. During the reporting week, correction of prices of refined oil products deepened. the front-month RBOB gasoline contract declined -3.16 % while the heating oil contract sank -6.2%.  Natural gas reverted to NET LENGTH of 5 420 for the week. Expectations that cold weather would boost natural gas consumption sent Nymex futures higher by +11.6%.

Traders turned more bullish on the precious metal complex last week. NET LENGTH for gold futures climbed higher. Speculative long positions added +387 contracts, while shorts sank -5 445, resulting in a NET LENGTH of 19 026 contracts. For silver futures, speculative long positions dropped -2 936 contracts while shorts fell -8 936, reducing NET SHORT, by -6 000 contracts, to 2 470 contracts. For PGMs, NET LENGTH of Nymex platinum futures gained +9 201 contracts to 23 924 while that for palladium gained +1 106 contracts to 13 249.