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Daily Pivots: (S1) 0.9986; (P) 1.0017; (R1) 1.0067; More...

Intraday bias in USD/CHF remains neutral at this point. Considering bearish divergence condition in 4 hour MACD, a short term top is possibly in place at 1.0094. On the downside, below 0.9968 will extend the decline from 1.0094 into 0.9848/9954 support zone. On the upside, though, break of 1.0094 and sustained trading above 1.0067 will confirm resumption of larger rise from 0.9186 and should target 1.0342 key resistance next.

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 resistance will dampen this view and bring deeper decline back to 0.9541 support and possibly below.

Daily Pivots: (S1) 112.71; (P) 113.01; (R1) 113.51; More..

Intraday bias in USD/JPY remains neutral at this point. Another rise is mildly in favor as long as 112.56 minor support holds. On the upside, break of 113.38 will resume the rebound from 113.37 to o retest 114.54/73 key resistance zone. On the downside, break of 112.56 will likely extend the correction from 114.54 to 38.2% retracement of 104.62 to 114.54 at 110.75 before completion.

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.

The forex markets open the week rather quietly. Sterling and Dollar are generally firmer but are both kept below Friday's high. The Pound did attempt to rise against Euro at open but quickly retreated back into familiar range. On the other hand, New Zealand Dollar and Australian Dollar are mildly lower. Chinese President Xi Jinping's unambitious pledge on import triggered little reactions, nor did BoJ Governor Kuroda's message on easing that we've heard a thousand times. Traders will look into UK services PMI and US ISM services for more inspirations, as well as comment out of EU on Italy.

In other markets, Nikkei closed down -1.57% at 21895.22. Other Asian markets are in red, with Hong Kong HSI down -2.35%, Shanghai SSE down -0.98%, Singapore Strait Times down -1.81%. Gold is hovering at 1230 after rebounding off 1210 last week. The more interesting move is seen in WTI crude oil, which is dropping further to 62.79 at the time of writing. Oil was sold off after the US granted temporary exemptions on Iranian oil sanctions to eight countries, including China, India, South Korea, Turkey, Italy, the United Arab Emirates, Japan. Taiwan is also exempted.

Technically, the main focus today is on whether Dollar could extend Friday's late rebound. In particular, USD/JPY is closing in on 113.38 temporary top. Even though there's some hesitation, EUR/GBP looks set to take on 0.8722 low.

China Xi pledged unambitious USD 30T imports at CIIE

China is holding a week-long China International Import Expo, or CIIE, in Shanghai, starting today. President Xi Jinping said "CIIE is a major initiative by China to pro-actively open up its market to the world." And, he noted "economic globalization is facing setbacks, multilateralism and the free trade system is under attack, factors of instability and uncertainty are numerous, and risks and obstacles are increasing." That's the usual rhetorics that China has been using to position itself as defender of free trade.

Nevertheless, Xi also pledged to cut import taxes further and spend more on foreign goods and services. He said China's goods import will exceed USD 30T over the next 15 years. Meanwhile, Services import will exceed USD 10T. The figure on goods was somewhat raised from Xi's prior promise of USD 24T. But the fact is, USD 30T over 15 years means only USD 2T per annum, which Chin has already nearly met back in 2013 and 2014. After a dip to USD 1.6T in 2016, import has already bounced back to USD 1.8T in 2017. So, Xi's target is not that ambitious.

China Caixin PMI composite dropped to 28-month low, mounting downward pressure on the economy

China Caixin PMI services dropped to 50.8 in October, down from 53.1 and missed expectation of 52.9. That's the lowest level in 13 months. PMI composite output index dropped from 51.2 to 50.5, hitting a 28-month low, lowest since June 2016.

Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said in the release that the fall in PMI composite indicated "mounting downward pressure on China's economy". Employment edged up but stayed negative, which " could possibly be due to government efforts". Future output index edged down, "reflecting weakening confidence among companies."

BoJ Kuroda: It's necessary to persistently continue with powerful monetary easing

BoJ Governor Haruhiko Kuroda delivered a speech to business leaders in Nagoya today. There he acknowledged that "the BOJ fully recognizes that, by continuing monetary easing, financial institutions' strength will be cumulatively affected." And, even though, "these risks are judged as not significant at this point", he pledged to "scrutinize developments and encourage financial institutions to take action as necessary."

US-China trade war is one of the risks surrounding Japan's outlook. Kuroda said "the impact of such problems on Japan's economy is limited for now ... ut if the problems persist, the effect on Japan's economy could become bigger".

Overall, Kuroda reiterated that "it's necessary to persistently continue with powerful monetary easing, while considering both the positive effects and side effects in a balanced manner." But BoJ will "of course" exit ultra-easy monetary policy when the 2% price target is reached.

BoJ minutes: Need to explain thoroughly the intention to continue with powerful easing

Separately, BoJ also released minutes of September 18-19 monetary policy meeting. The minutes reiterated that the measures taken back in July, including introduction of forward guidance, were for strengthening the framework for "continuous" powerful monetary easing. However, A few members noted some market participants still viewed BoJ's intention as "unclear". Thus, "it was important to continue to thoroughly explain that the measure was intended to make clearer the Bank's policy stance that it would persistently continue with powerful monetary easing while taking into account its side effects.

One member also pointed out that allowing long term yields to move in a "more flexible manner" prompted "heightened" volatility in JGB market. And, since it's only two months past that meeting, with small transactions volume of JGB in summer, "it was necessary to continue to carefully examine the effects on financial markets".

Eurozone FM to discuss Italy's recipe for reviving growth

Italy's budget will certainly be a hot topic in the summit of Eurozone finance minister meeting in Brussels today. It comes at time time after European Commission rejected the country's 2019 budget, with deficit target at 2.4% of GDP. The Commission demand Italy to revise the plan by November 13, But Prime Minister Giuseppe Conte insisted there is no "Plan B" for the program and indicated no intention to comply with EU's demand.

Italian Deputy Prime Minister Luigi Di Maio, leader of the 5 Star Movement, said over the weekend that the coalition government "will not cede an inch" on the budget. He also hailed that their own plan will become a "recipe" for reviving European growth.

Three central banks to meet but politics could be more market moving

Three central banks will meet this week. RBA, RBNZ and Fed are all expected to keep monetary policies unchanged. They're unlikely to reveal anything new to the markets. Though, RBA's monetary policy statement on Friday could be a point of interest. ECB will also release monthly economic bulletin. Some important economic data are also scheduled, in particular form UK including services PMI, GDP and productions. IN addition, US ISM services, New Zealand employment; China trade balance will also be featured.

Nevertheless, Brexit negotiations, Italy budget, US-China trade talk, and US mid-term election will likely be bigger market movers.

• Monday: BoJ minutes; Eurozone Sentix investor confidence; UK services PMI; US ISM non-manufacturing
• Tuesday: RBA rate decision; Japan household spending; German factory orders; Eurozone PMI services final, PPI
• Wednesday: New Zealand employment, labor costs, inflation expectation; Japan average cash earnings, leading indicators; German industrial production; Eurozone retail sales; Canada Ivey PMI
• Thursday: RBNZ rate decision; BoJ summary of opinions, Japan machine orders, current account; China trade balance; Swiss unemployment rate; German trade balance; ECB monthly bulletin; Canada housing starts, new housing price index; US jobless claims, FOMC rate decision
• Friday: RBA monetary policy statement, Australia home loans; China CPI and PPI; UK GDP, industrial and manufacturing productions, trade balance; US PPI, U of Michigan sentiments

USD/JPY Daily Outlook

Daily Pivots: (S1) 112.71; (P) 113.01; (R1) 113.51; More..

Intraday bias in USD/JPY remains neutral at this point. Another rise is mildly in favor as long as 112.56 minor support holds. On the upside, break of 113.38 will resume the rebound from 113.37 to o retest 114.54/73 key resistance zone. On the downside, break of 112.56 will likely extend the correction from 114.54 to 38.2% retracement of 104.62 to 114.54 at 110.75 before completion.

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.

Economic Indicators Update

For the 24 hours to 23:00 GMT, the EUR declined 0.07% against the USD and closed at 1.1397 on Friday.

On the data front, the Euro-zone's final manufacturing PMI fell to a 26-month low level of 52.0 in October, exceeding market expectations for a fall to a level of 52.1 and compared to a reading of 53.2 in the previous month. The preliminary figures had indicated a drop to a level of 52.1. Meanwhile, in Germany, the Markit final manufacturing PMI slid to a level of 52.2 in October, hitting its lowest level in 29-months and compared to a level of 53.7 in the previous month. The preliminary figures had indicated a drop to 52.3.

The US dollar gained ground against major currencies, following stronger than expected jobs data.

In the US, the US non-farm payrolls climbed 250.0K in October, compared to a revised advance of 118.0K in the prior month. Markets had anticipated non-farm payrolls to rise a level of 200.0K. Further, average hourly earnings of all employees rose 3.1% on an annual basis in October, at par with market expectations and growing at its fastest pace since 2009. In the previous month, average hourly earnings of all employees had advanced 2.8%. Additionally, the nation's final durable goods orders advanced 0.7% on a monthly basis in September, compared to a revised rise of 4.6% in the previous month. The preliminary figures had recorded an advance of 0.8%. Furthermore, factory orders rose 0.7% on a monthly basis in September, higher than market consensus for a gain of 0.5%. In the prior month, factory orders had recorded a revised rise of 2.6%. Moreover, unemployment rate remained unchanged at a rate of 3.7% in October, in line with market expectations.

On the other hand, data showed that trade deficit widened more-than-anticipated to $54.0 billion in September, expanding to a seven-month high level. In the previous month, the region had recorded a revised deficit of $53.3 billion.

In the Asian session, at GMT0400, the pair is trading at 1.1384, with the EUR trading 0.11% lower against the USD from Friday's close.

The pair is expected to find support at 1.1352, and a fall through could take it to the next support level of 1.1320. The pair is expected to find its first resistance at 1.1436, and a rise through could take it to the next resistance level of 1.1488.

Moving ahead, investors would await the Euro-zone's Sentix investor confidence for November, set to release in a few hours. Later in the day, the US flash Markit services PMI for October, will pique significant amount of investors attention.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP declined 0.22% against the USD and closed at 1.2969 on Friday.

Data indicated that, UK's construction PMI unexpectedly climbed to a 16-month high level of 53.2 in October, defying market expectations for a drop to a level of 52.0. In the preceding month, the PMI had recorded a reading of 52.1.

In the Asian session, at GMT0400, the pair is trading at 1.2985, with the GBP trading 0.12% higher against the USD from Friday's close.

The pair is expected to find support at 1.2944, and a fall through could take it to the next support level of 1.2904. The pair is expected to find its first resistance at 1.3033, and a rise through could take it to the next resistance level of 1.3082.

Looking forward, traders would keep an eye on UK's services PMI for October, scheduled to release in a while.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD rose 0.47% against the JPY and closed at 113.17 on Friday.

In the Asian session, at GMT0400, the pair is trading at 113.19, with the USD trading marginally higher against the JPY from Friday’s close.

On the macro front, in Japan, the Nikkei Japan services PMI advanced to 52.4 in October. In the prior month, the services PMI had registered a reading of 50.2.

The pair is expected to find support at 112.79, and a fall through could take it to the next support level of 112.4. The pair is expected to find its first resistance at 113.45, and a rise through could take it to the next resistance level of 113.72.

In absence of key economic releases in Japan today, investor sentiment would be determined by global macroeconomic events.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.11% against the CHF and closed at 1.0034 on Friday.

On the macro front, Switzerland's real retail sales slid 2.7% on a yearly basis in September, declining at its strongest pace since December 2016 and more than market consensus for a fall of 0.1%. In the previous month, real retail sales had registered a revised rise of 0.5%.

In the Asian session, at GMT0400, the pair is trading at 1.0045, with the USD trading 0.11% higher against the CHF from Friday's close.

The pair is expected to find support at 0.9992, and a fall through could take it to the next support level of 0.9940. The pair is expected to find its first resistance at 1.0073, and a rise through could take it to the next resistance level of 1.0102.

Trading trend in the Swiss Franc today is expected to be determined by Switzerland's total sight deposits, due to release in a while.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.09% against the CAD and closed at 1.3099 on Friday.

In the economic news, Canada's unemployment rate unexpectedly slid to a four-decade low rate of 5.8% in October, confounding market expectations for a steady reading. The unemployment rate had registered a reading of 5.9% in the previous month.

In the Asian session, at GMT0400, the pair is trading at 1.3107, with the USD trading 0.06% higher against the CAD from Friday's close.

The pair is expected to find support at 1.3064, and a fall through could take it to the next support level of 1.3022. The pair is expected to find its first resistance at 1.3134, and a rise through could take it to the next resistance level of 1.3162.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the AUD slightly declined against the USD and closed at 0.7201 on Friday.

Yesterday data showed that Australia's AiG performance of services index dropped to 51.1 in October, compared to a level of 52.5 in the prior month.

LME Copper prices rose 3.1% or $185.0/MT to $6255.0/MT. Aluminium prices rose 0.3% or $6.0/MT to $1967.0/MT.

In the Asian session, at GMT0400, the pair is trading at 0.7187, with the AUD trading 0.19% lower against the USD from Friday's close.

Elsewhere, in China, Australia's largest trading partner, the Markit services PMI index fell to a level of 50.8 in October, more than market expectations. The Markit services PMI index had registered a level of 53.1 in the previous month.

The pair is expected to find support at 0.7160, and a fall through could take it to the next support level of 0.7132. The pair is expected to find its first resistance at 0.7237, and a rise through could take it to the next resistance level of 0.7286.

Going forward, traders would closely monitor the Reserve Bank of Australia's interest rate decision, slated to release early morning tomorrow.

The currency pair is trading below its 20 Hr moving average and showing convergence with its 50 Hr moving average.

For the 24 hours to 23:00 GMT, Gold declined 0.15% against the USD and closed at USD1234.00 per ounce on Friday, amid strength in the US dollar.

In the Asian session, at GMT0400, the pair is trading at 1233.50, with gold trading a tad lower against the USD from Friday’s close.

The pair is expected to find support at 1230.40, and a fall through could take it to the next support level of 1227.30. The pair is expected to find its first resistance at 1237.50, and a rise through could take it to the next resistance level of 1241.50.

The yellow metal is trading below its 20 Hr moving average and showing convergence with its 50 Hr moving average.