Sample Category Title

For the 24 hours to 23:00 GMT, Crude Oil declined 1.66% against the USD and closed at USD68.78 per barrel, ahead of US sanctions on Iran to be imposed in November.

In the Asian session, at GMT0300, the pair is trading at 68.90, with oil trading 0.17% higher against the USD from yesterday’s close.

The pair is expected to find support at 68.28, and a fall through could take it to the next support level of 67.66. The pair is expected to find its first resistance at 69.71, and a rise through could take it to the next resistance level of 70.52.

Going ahead, traders look forward to the Baker Hughes weekly rig count data, set to release later in the day.

Crude oil is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

Daily Pivots: (S1) 1.2977; (P) 1.3055; (R1) 1.3093; More...

The strong break of 1.3081 minor support indicates resumption of fall from 1.3257. Intraday bias is turned back to the downside for 1.2921 support first. Firm break there will bring retest of 1.2661 low. Overall, price actions from 1.2661 are viewed as a corrective pattern. IN case of another rise, upside should be limited by 1.3316 key 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) 111.85; (P) 112.29; (R1) 112.63; More..

USD/JPY breached 112.01 minor support briefly and quickly recovered. Intraday bias is turned neutral first. On the upside, above 112.71 will extend the rebound from 111.62 to retest 114.54 high. On the downside, below 111.62 will resume the correction from 114.54 to 38.2% retracement of 104.62 to 114.54 at 110.75. We'll look for bottoming signal above 109.76 key support in that case.

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) 0.9925; (P) 0.9950; (R1) 0.9981; More...

Intraday bias in USD/CHF remains on the upside for the moment. Current rise from 0.9541 should target t 1.0067 key resistance and then 61.8% projection of 0.9541 to 0.9954 from 0.9848 at 1.0103. On the downside, break of 0.9848 support is needed to indicate short term topping. Otherwise, further rally will be expected even in case of retreat.

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.

Daily Pivots: (S1) 1.3036; (P) 1.3063; (R1) 1.3112; More...

USD/CAD's rebound from 1.2781 resumed by taking out 1.3070 and intraday bias is back on the upside. Sustained trading above 1.3081 resistance will be the first sign of completion of whole choppy fall from 1.3385. In that case, near term outlook will be turned bullish for 1.3225 resistance for confirmation. For now, as long as 1.2916 minor support holds, further rally will remain mildly in favor in case of retreat.

In the bigger picture, corrective rebound from 1.2061 could have completed at 1.3385 already. Deeper fall is mildly in favor to 61.8% retracement of 1.2061 to 1.3385 at 1.2567, which is close to 1.2526 support. For now, we're not seeing fall from 1.3385 as resuming larger down trend from 1.4689 (2015 high) yet. Thus, we'll look for bottoming signal again below 1.2567 . On the upside, though, break of 1.3081 resistance will argue that the pull back from 1.3385 is completed and rise from 1.2061 is resuming for another high above 1.3385.

Daily Pivots: (S1) 0.7081; (P) 0.7116; (R1) 0.7136; More...

AUD/USD's breach of 0.7098 minor support suggests that corrective rebound from 0.7040 has completed at 0.7159 already. Intraday bias is back on the downside for retesting 0.7040 low first. Break there will resume recent down trend to 61.8% projection of 0.7676 to 0.7084 from 0.7314 at 0.6948 next. On the upside, above 0.7159 will delay the bearish case and bring more consolidation first.

In the bigger picture, 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, break of 0.7500 support turned resistance will argue that the corrective pattern from 0.6826 is going to extend with another rising leg before completion.

Daily Pivots: (S1) 145.27; (P) 146.58; (R1) 147.34; More...

GBP/JPY drops to as low as 145.81 so far and focus is now on 145.67 resistance turned support. Decisive break there will suggests that whole rebound form 139.88 has completed. In that case, near term outlook will be turned bearish for 139.88 low again. On the upside, though, above 147.17 minor resistance will reaffirm the case that price actions from 149.70 are merely corrective. And intraday bias will be turned back to the upside for retesting 149.70.

In the bigger picture, current development suggests that GBP/JPY has successfully defended 139.29 cluster support (50% retracement of 122.36 to 156.59 at 139.47). And, the rally from 122.36 (2016 low) is still intact. Such medium to long term rise would extend through 156.96 high. This will now be the preferred case as long as 145.67 near term support holds. However, break of 145.67 will turn focus back to 139.29/47 key support zone.

Daily Pivots: (S1) 127.93; (P) 128.84; (R1) 129.36; More....

EUR/JPY's fall from 133.12 resumed by taking out 129.11 temporary low. Intraday bias is back on the downside for 127.85 support first. Decisive break there will confirm completion of rebound from 124.89 at 133.12. In that case, deeper decline would be seen back to 124.61.89 support zone. On the upside, break of 130.29 resistance is needed to indicate completion of the fall. Otherwise, near term outlook will stay mildly bearish in case of recovery.

In the bigger picture, current development suggests that EUR/JPY could have defended key support level of 124.08 key resistance turned support. And, the 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. This will be the preferred case as long as 127.85 near term support holds. However, break of 127.85 will turn focus back to 124.08 key support level.

Euro and Sterling recover mildly in Asian session but they remain the weakest two for the week. Brexit impasse and Italian budget continued to weigh down both currencies, which also drags down Swiss Franc. Dollar's rally extended lower night as helped by hawkish comments from a top Fed official. There are tentative signs of more Dollar strength but it's yet to be confirmed. Meanwhile, Australian and New Zealand Dollar are the strongest ones despite weakness in global equities, in particular China. And weaker than expected Chinese GDP was shrugged off by both Aussie and Kiwi.

Technically, EUR/USD is on track to 1.1431 support and break will confirm resumption of fall from 1.1814. USD/CHF stays firm as recent rally has resumed, even though there is no acceleration yet. GBP/USD's break of 1.3081 overnight should now send the pair back to 1.2921 support. USD/CAD's break of 1.3081 resistance also argue that rebound fro 1.2781 is resuming and carries near term bullish implications. It should also be noted that EUR/JPY resumed recent fall from 129.11 and should target 127.85 support next. GBP/JPY will likely test 145.67 resistance turned support. Break there will turn outlook bearish and re-align the outlook with EUR/JPY.

In other markets, DOW closed own 1.27% overnight, S&P 500 down -1.44% and NASDAQ dropped -2.06%. But all three indices are kept well above last week's lows. US 30-year yield closed up 0.013 at 3.359, 10 year yield down -0.004 at 3.175, five-year yield down -0.017 at 3.024. Strength continues to be seen at the long end.

In Asia, Nikkei is down -1.06% at the time of writing, Singapore Strait Times down -0.24%, Hong Kong HSI down -0.34%. China Shanghai SSE hit as low as 2449.20 earlier today as down trend extended. Subsequent recovery is capped by 2500 handle as well as weaker than expected China GDP. Another round of selloff could be seen before weekly close.

Fed Quarles: Right strategy is to maintain the gradual course

Fed Governor Randal Quarles said in a speech yesterday that monetary policy shouldn't "drift" because of the uncertainties around many macroeconomic inputs Instead, Fed policymakers should "chart a course that is stable, gradual, and predictable; communicate it clearly; and then follow that course through the temporarily shifting and sometimes conflicting signs from the economy". And, to him, given that "the economy has performed fundamentally as I expected", the "right strategy is to maintain the gradual course".

On the one hand, the "productive capacity" of the US might be increasing so there is no need to "accelerate our pace". On the other hand, there there is enough doubt that "current inflation as an infallibly reliable measure of current resource constraints". Hence, "continued gradual removal of accommodation is appropriate."

EU: Italy's budget an obvious significant deviation of Stability and Growth Pact

EU Commissioners Valdis Dombrovskis and Pierre Moscovici wrote a joint letter to warn Italy of its budget plan. Handing the letter directly to Italian Economy Minister Giovanni Tria, the EU started the first formal step to reject the budget which will lead to direct clash between Rome and Brussels. Italy will now have until October 22 to respond to the letter.

EU said in the letter that Italy's plan is an "obvious significant deviation" of the recommendations adopted by the European Council under the 2019 Stability and Growth Pact. Also, while the Council suggested fiscal adjustment, the Italy plans fiscal expansion of close to 1% of GDP, and the "size of the deviation (a gap of around 1.5% of GDP) are unprecedented".

EU also criticized that the macroeconomic forecasts under the plan has not been endorsed by the Parliamentary Budget Office. And this appears "not to respect" the rules of having forecasts produced or endorsed by an "independent body".

Italian Prime Minister Giuseppe Conte said they're ready to reply to EU's concern and he's not worried.

China Q3 GDP slowed to 6.5%, Shanghai SSE recovery capped by 2500

China's Shanghai SSE Composite dived to as low as 2449.20 in initial trading, following the steep selloff in the US. The index recovered after the China Banking and Insurance Regulatory Commission (CBRC) announced measures to encourage private equity funds to buy public traded shares. However, weaker than expected Q3 GDP data appears to cap SSE's recovery as it fails to get hold of 2500 handle.

Released from China, Q3 GDP growth slowed to 6.5% yoy, down from 6.7% yoy in Q2 and missed expectation of 6.6 yoy. That's also the weakest reading since Q2 of 2009. On quarterly basis, growth slowed to 1.6% qoq, down from Q2's 1.8% qoq. Also release, industrial production grew 5.8% yoy in September, down from 6.1% and missed expectation of 6.0% yoy. But retail sales rose 9.2% yoy, up from 9.0% yoy and beat expectation of 9.0% yoy. Fixed asset investment rose 5.4% ytd yoy, up from 5.3% ytd yoy and beat expectation of 5.3% ytd yoy.

Statistics bureau spokesman Mao Shengyong said China is still able to reach the full-year growth target of around 6.5% in 2018 even though downward pressure increases. He added that infrastructure investment growth will stabilize and "consumption upgrade" will continue. Nonetheless, Mao also admitted that external environment will pose uncertainties on stabilizing growth.

Elsewhere, Canadian retail sales and CPI to take center stage

Japan national CPI core accelerated to 1.0% yoy in September, up from 0.9% yoy and matched expectations. Eurozone currency account and UK public sector net borrowing are the only notable feature in European session. Canadian data will take center stage later today with retail sales and CPI. US will release existing home sales.

EUR/JPY Daily Outlook

Daily Pivots: (S1) 127.93; (P) 128.84; (R1) 129.36; More....

EUR/JPY's fall from 133.12 resumed by taking out 129.11 temporary low. Intraday bias is back on the downside for 127.85 support first. Decisive break there will confirm completion of rebound from 124.89 at 133.12. In that case, deeper decline would be seen back to 124.61.89 support zone. On the upside, break of 130.29 resistance is needed to indicate completion of the fall. Otherwise, near term outlook will stay mildly bearish in case of recovery.

In the bigger picture, current development suggests that EUR/JPY could have defended key support level of 124.08 key resistance turned support. And, the 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. This will be the preferred case as long as 127.85 near term support holds. However, break of 127.85 will turn focus back to 124.08 key support level.

Economic Indicators Update

China's Shanghai SSE Composite dived to as low as 2449.20 in initial trading, following the steep selloff in the US. The index recovered after the China Banking and Insurance Regulatory Commission (CBRC) announced measures to encourage private equity funds to buy public traded shares. However, weaker than expected Q3 GDP data appears to cap SSE's recovery as it fails to get hold of 2500 handle.

Released from China, Q3 GDP growth slowed to 6.5% yoy, down from 6.7% yoy in Q2 and missed expectation of 6.6 yoy. That's also the weakest reading since Q2 of 2009. On quarterly basis, growth slowed to 1.6% qoq, down from Q2's 1.8% qoq. Also release, industrial production grew 5.8% yoy in September, down from 6.1% and missed expectation of 6.0% yoy. But retail sales rose 9.2% yoy, up from 9.0% yoy and beat expectation of 9.0% yoy. Fixed asset investment rose 5.4% ytd yoy, up from 5.3% ytd yoy and beat expectation of 5.3% ytd yoy.

Statistics bureau spokesman Mao Shengyong said China is still able to reach the full-year growth target of around 6.5% in 2018 even though downward pressure increases. He added that infrastructure investment growth will stabilize and "consumption upgrade" will continue. Nonetheless, Mao also admitted that external environment will pose uncertainties on stabilizing growth.