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USDJPY is at the lows, now in wave five out of a triangle so market can see a low soon. Keep in mind that after every five waves, market will make a three wave recovery. In our case this reversal will be expected in the next few trading days. Technical support is at 111.30/111.50.

USDJPY, 1h

We see gold moving up in impulsive fashion. Price broke above 1226 and is now trading in fifth wave towards 1235/1240 area, where bulls may start slowing down for a new three-wave reversal.

Gold, 1h

The Canadian dollar is unchanged in the Monday session. Currently, USD/CAD is trading at 1.3016, down 0.04% on the day. On the release front, the focus is on retail sales reports. Retail Sales is expected to gain 0.7%, while Core Retail Sales is forecast to climb 0.3%. The U.S Treasury is expected to release the semi-annual currency report. In Canada, the sole event is the Bank of Canada business outlook survey.

U.S. consumer inflation reports missed their estimates, and the Canadian dollar took advantage, posting gains on Thursday. CPI and Core CPI both posted small gains of 0.1%, shy of the estimate of 0.2%. On a year-to-year basis, CPI increased 2.3% in September, down from 2.7% in August. Still, with inflation above the Fed’s 2% inflation target, these readings are unlikely to affect the Fed’s plans to raise interest rates in December, which would mark the fourth rate increase this year. The likelihood of a rate hike remains high, with the CME pegging the odds at 76%.

With the U.S economy continuing to post strong numbers, the Federal Reserve is on track to raise rates in December. This would be the fourth rate hike in 2018, and the markets are expecting three more hikes in 2019. Not surprisingly, this has put pressure on the Bank of Canada to raise rates as well. The Canadian economy is in good shape, but not nearly as strong as its southern neighbor. The Bank of Canada holds its next policy meeting on October 24, and the strength of key Canadian releases will be a major factor as to whether policymakers raise rates.

Brexit negotiation is one of the key theme today after the Irish border deadlock came up unresolved after the meeting between UK and EU in Brussels over the weekend. UK Prime Minister Theresa May's spokesman insisted that "there are a number of means of achieving what we want to achieve," referring to the issue. May is expected to publish a statement to the parliament later today regarding the failure of the weekend talks.

European Commission spokesman Margaritis Schinas said in a regular new conference that "while we are working hard for a deal, our preparedness and contingency work is continuing and intensifying." German government spokesman Steffen Seibert also said the cabinet will committee on Brexit will discuss the country's preparedness for a no-deal scenario.

The DAX index has posted slight gains in the Monday session. Currently, the index is at 11,562, up 0.37% on the day. In economic news, it’s a quiet start to the week, with no German or eurozone events. In the U.S, the Treasury Department is expected to release the semi-annual currency report.

It’s been a brutal week for global equity markets, but there has been some relief on Friday. Asian markets recorded gains, lifting European markets as well. Even with Friday’s gains, the DAX has declined 3.5% this week. Two key factors in the sharp decline are the spike in U.S bond yields and growing fears about the impact of the U.S-China trade war. The DAX touched a low of 11,518 this week, its worst showing since February 2017. If bond yields continue to rise next week, the DAX could face further headwinds next week.

German inflation data was strong in September. CPI climbed 2.3% in September on a year-to-year basis, its strongest gain since November 2011. Not surprisingly, much of the increase is a result of higher energy prices, as Brent crude remains above $80 a barrel. Eurozone inflation has also been moving higher and is finally closing in on the ECB’s target of just below 2 percent. Stronger inflation has reinforced speculation that the ECB could raise interest rates for the first time in years in the second half of 2019.

The ECB made no changes to monetary policy at the September policy meeting, but the minutes indicated that policymakers are worried that global trade tensions could dampen eurozone growth. The ECB debated whether to lower its risk assessment, but in the end decided that the eurozone economy was strong enough to allow the ECB to maintain its ‘slow but steady’ stance of tightening policy. The ECB remains on track to end its massive bond purchase program at the end of the year. Meanwhile, with bond yields pointing higher, investors have reacted negatively and stock markets continue to spin lower. On Thursday, German 10-year bonds fetched 0.55%, marking a 6-month high.

The European Single Currency appreciated 0.18% against the US Dollar since Friday's session. During Friday 's session, the currency pair depreciated to pass the 55-hour SMA to stop the trade at the 1.1550 mark. During Monday morning hours, the rate retraced to trade at the 1.1560 mark.

In regards to the near-term future, most likely, the European Single Currency will trade sideways near the weekly PP at the 1.1535 mark to stay at the 1.1540 level during the day.

However, the European Single Currency might move the rate to go any directions due to US fundamental data sets during the trading session

The British pound depreciated 0.89% against the US Dollar since Friday's session. During the previous session, the rate passed the 55-hour and the 100-hour SMAs supports together with the 50.00% Fibo and the weekly PP level to stop the trade at the 1.3101 mark. On Monday, the British pound was located below the weekly PP at the 1.3127 mark.

In regards to the near-term future, the currency exchange rate will trade sideways due to support of the 200-hour SMA and resistances of the significant technical indicators. Most likely, the rate will trade at the 1.3050 level during the day.

However, today's fundamentals could break the prediction for the currency pair!

The US Dollar depreciated 0.36% against the Japanese Yen since Friday's session. During the previous trading session, the currency pair was resisted by the 55-hour SMA during the whole trading session. On Monday morning, the US Dollar was located near the monthly S1 at the 111.66 mark.

In regards to the near-term future, most likely, the US dollar will trade downwards to the monthly S1 at the 111.49 mark. The US retail sales data sets will come out at 12.30 GMT on Monday.

In addition, it is expected that the currency pair might pass the monthly S1 and the weekly S1 at the 111.39 mark due to the fundamentals.

The gold price appreciated 0.87% since Friday's session. During the previous trading session, the yellow metal broke the large pattern to stop the trade at the 1,218.76 mark. During Monday morning hours, the gold broke the monthly R2 at the 1,227.33 mark to trade at the 1,230.99 mark.

In regards to the near-term future, the gold will trade upwards to the upper boundary of the ascending medium pattern which is located at the 1,235.50 mark. Most likely the yellow metal will trade at the 1,230.00 level during the day.

However, today's US fundament data sets could help the yellow metal to break the resistance of the pattern line to trade at the 1,240.00 level.

The British Pound has appreciated substantially against the Australian Dollar since the middle of August after the currency pair reversed from the lower boundary of an ascending channel pattern at 1.7290.

The exchange rate has breached the 50-hour simple moving average at 1.8461 during the morning hours of Monday's trading session.

Everything being equal, it is likely that the GBP/AUD pair fills the open gap north within this session.

On the other hand, the currency exchange rate could continue moving downward and aim at a support cluster formed by the combination of the weekly and the monthly PPs at 1.8378 during the following trading session.

The Pound Sterling has been trading in a two-week ascending channel against the Canadian Dollar. The currency pair made a U-turn north from the lower boundary of the channel on October 3.

The exchange rate opens below a support cluster formed by the combination of the weekly and the monthly PPs at 1.7089 during Monday's session.

As for the short-term future, it is expected for the currency exchange rate to aim at the three SMAs located near the 1.6963 within this session.

On the other hand, the GBP/CAD pair could fills the open gap north at 1.7115 during the following trading session.