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Daily Pivots: (S1) 147.33; (P) 148.42; (R1) 149.35; More...

GBP/JPY is still bounded in consolidation from 149.70 and intraday bias remains neutral first. In case of deeper fall, outlook will stay remain bullish as long as 145.67 resistance turned support holds. On the upside, above 149.70 will target 153.84/156.69 resistance zone next. However, break of 145.67 will suggest that the rebound from 139.88 has completed and turn near term outlook bearish again.

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) 129.34; (P) 130.29; (R1) 131.09; More....

Intraday bias in EUR/JPY remains on the downside at this point. Current fall from 133.12 would target 127.85 support first. Prior rise fro 124.89 could have completed at 133.12 already. Break of 127.85 will pave the way to retest 124.89. On the upside, though, above 131.23 minor resistance will turn bias back to the upside for 133.12 instead.

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 now be the preferred case as long as 127.85 near term support holds.

Daily Pivots: (S1) 0.8766; (P) 0.8788; (R1) 0.8802; More...

EUR/GBP's fall is still in progress and intraday bias remains on the downside. Current decline fro 0.9097 should target 0.8620 low next. Decisive break there will resume whole down trend from 0.9304. In that case, next target will be 100% projection of 0.9305 to 0.8620 from 0.9097 at 0.8412. On the upside, break of 0.8847 support turned resistance is needed to be the first sign of short term bottoming. Otherwise, outlook will remain bearish in case of recovery.

In the bigger picture, EUR/GBP is seen as staying in long term range pattern started at 0.9304 (2016 high). Current development suggests that fall from 0.9303, as a down leg in the pattern, is still in progress. But in case of deeper fall, downside should be contained by 0.8116 cluster support, 50% retracement of 0.6935 (2015 low) to 0.9304 at 0.8120, to bring rebound.

Daily Pivots: (S1) 1.6183; (P) 1.6270; (R1) 1.6320; More....

Intraday bias in EUR/AUD remains neutral first. As long as 1.6175 minor support holds, further rise is expected in the cross. On the upside, firm break of 1.6353 resistance will resume larger up trend and target 1.6857 key resistance next. However, break of 1.6175 will dampen the bullish case and extend the consolidation pattern from 1.6353 with another fall.

In the bigger picture, up trend from 1.3624 (2017 low) is still in progress. Further rise should be seen to retest 1.6587 (2015 high). Decisive break there will resume the long term rally and target 1.7488 fibonacci level. On the downside, break of 1.5984 support is need to be the first sign of medium term reversal. Otherwise, outlook will remain bullish in case of deep pull back.

General Trend:

• Shanghai Composite moves between gains and losses during morning session
• China listed Luxshare rises on profit forecast upgrade
• IT index underperforms in Australia
• Equities in New Zealand decline for 7th straight session
• Electric Appliances and Marine Transportation stocks weigh on Japan equity markets
• Tokyo Stock Exchange having problems with server related to equity trading, which caused some trade delays
• Papa John’s rises in the afterhours on takeover speculation
• IMF cuts world 2018 and 2019 GDP forecast by 0.2% to 3.7% (first cut since 2016); risk of balance has shifted to the downside due to escalating trade conflicts and tighter financial conditions
• No ‘trade’ talks expected between top US and China officials at this week’s global meetings (HK Press)
• China continues to weaken the yuan following recent holiday
• Questions about the yuan (CNY) would be addressed in the US Treasury’s next Foreign Exchange Report, likely to be released during the week of Oct 15th (US Treasury Official)
• China money market rates continue to rise despite recent RRR cut
• China is expected to hold its roadshow for planned US dollar denominated bond issuance today
• US Treasury yields rise in Asian trading
• Hong Kong Chief Executive Lam expected to issue policy speech on Wed

Headlines/Economic Data

Japan

• Nikkei 225 opened -1.0%
• (JP) Japan Aug Adj Current Account: : ¥1.43T v ¥1.52Te; Current Account: ¥1.84T v ¥1.89Te; Trade Balance: -¥219.3B v -¥208.0Be
• 8358.JP Japan Post Bank to limit its efforts to promote loans offered by Suruga - US financial press [-8%]
• (JP) JAPAN SEPT ECO WATCHERS CURRENT SURVEY: 48.6 V 47.0E; OUTLOOK SURVEY: 51.3 V 50.8E

Korea

• Kospi closed for holiday
• Kakai, 035720.KR Blockchain subsidiary, Ground X, announced plans to launch a testnet version of its proprietary blockchain platform Klaytn
• (NK) North Korea hackers said to have broke into banks and sought $1.1B - financial press (US session)

China/Hong Kong

• Hang Seng opened 0.0%, Shanghai Composite -0.1%
• (CN) Top trade negotiators from China and the US are unlikely to meet this week during the IMF and World Bank annual meetings - Hong Kong Press
• (CN) China Daily editorial: Recent RRR cut together with previous three cuts this year, help channel funds into the country's real economy and boost the growth of the Chinese economy
• (US) US Treasury Dept Official: US is concerned about China currency depreciation and is monitoring developments - IMF event (US session)
• (CN) China PBoC Open Market Operation (OMO): Skips OMO v skipped prior: Net: CNY60B drain v CNY100B drain prior (drains liquidity for the 8th straight session, 3rd consecutive skip)
• (CN) China offering 16% tax rebate to exporters - HK press
• (CN) China state-backed Global Times: China must take 'strong' stimulus measures to support growth, country is in a critical period of stabilizing its economy
• (CN) S&P: China recent RRR cut is not enough to boost select lending, does not signal significant change in monetary policy

Australia/New Zealand

• ASX 200 opened -0.3%
• (NZ) New Zealand 2017/18 operating surplus NZ$5.53B v NZ$3.14B forecasted; debt to GDP 19.9% v 20.8% forecasted
• (NZ) New Zealand Sept ANZ Truckometer Heavy m/m: -2.6% v +1.0% prior
• (AU) Australia sells A$150M v A$150M indicated in 0.75% 2027 indexed bonds, avg yield 0.8078%, bid to cover 4.97x
• (AU) Australia Sept NAB Business Conditions: 15 v 14 prior; Confidence: 6 v 5 prior
• (NZ) New Zealand Sept ANZ Inflation Gauge M/M: +0.3% v 0.6% prior; Y/Y: 2.9% v 2.8% prior

North America

• PZZA Trian Fund Management said to be in early stages of putting together a possible bid; also has interest from possible strategic buyer - financial press [+16.6% afterhours]

Europe

• (UK) UK Sept Barclaycard Consumer Spending Y/Y: +3.9% v +4.5% prior (slowest rise since April)
• (NO) Norway Central Bank (Norges) Gov Olsen: Reiterates view of suggesting cautious approach to rate setting

Levels as of 01:30ET

• Hang Seng +0.2%; Shanghai Composite +0.3%; Kospi closed for holiday; Nikkei225 -1.3%; ASX 200 -1.0%
• Equity Futures: S&P500 -0.1%; Nasdaq100 +0.0%, Dax -0.1%; FTSE100 -0.3%
• EUR 1.1503-1.1485; JPY 113.22.-112.93; AUD 0.7093-0.7066;NZD 0.76459-0.6443
• Dec Gold -0.5% at $1,194/oz; Nov Crude Oil +0.4% at $74.61/brl; Dec Copper +0.4% at $2.78/lb

Daily Pivots: (S1) 1.1375; (P) 1.1410; (R1) 1.1440; More...

No change in EUR/CHF's outlook and intraday bias remains neutral. On the downside, break of 1.1361 minor support suggest rejection by 1.1452 resistance. Intraday bias will then be turned back to the downsides for retesting 1.1154/98. On the upside, decisive break of 1.1452 resistance should confirm bullish reversal, after drawing strong support from 1.1154/98 zone. In that case, outlook will be turned bullish for 1.1713 resistance next.

In the bigger picture, price actions from 1.2004 medium term top is seen as a correction only. Downside should be contained by support zone of 1.1198 (2016 high) and 61.8% retracement of 1.0629 to 1.2004 at 1.1154 to complete it and bring rebound. This cluster level is in proximity to long term channel support (now at 1.1234) too. A break of 1.2 key resistance is still expected in the medium term long term. However, sustained break of the mentioned support zone will mark reversal of the long term trend. In that case, 1.0629 key support will be back into focus.

The euro is trading back towards the psychological 1.1500 level against the US dollar after sellers failed to hold price below critical support on Monday. The EURUSD pair may have formed a bullish double-bottom pattern, hinting that price could now start to correct higher. Intraday buyers need to move price above the 1.1553 resistance level, while sellers will need to break the current weekly trading low.

The EURUSD pair is intraday bearish while trading below the 1.1500 level, key technical support is now found at the 1.1456 and 1.1405 levels.

If the EURUSD buyers move price above the 1.1500 level, key resistance is found at the 1.1553 and 1.1600 levels.

The US dollar has fallen sharply lower against the Japanese yen after Chinese equity markets plunged lower on Monday, causing a flight into safe-haven currencies. The USDJPY pair remains under pressure and is intraday bearish while price trades below the well-defined rising channel. Sellers will attempt to break the 112.75 support level, while buyers need to move price back inside the rising channel.

The USDJPY pair is intraday bearish while trading below the 113.52 level, key support is found at the 112.75 and 112.35 levels.

If the USDJPY pair moves above the 113.52 level, buyers will likely test towards 113.72 and 114.06 levels.

The International Monetary Fund (IMF) lowered the global economic forecast to 3.7% from the previous 3.9%. The organization said that the current trade rhetoric coupled with the disruption of capital flows to the emerging markets will curtail growth. In recent months, the United States and China have engaged in a prolonged trade war with retaliatory tariffs. Recent reports suggest that Chinese companies have found thousands of loopholes allowing them to evade such tariffs.

After falling initially, US stocks ended the day a bit higher yesterday. News of the Google+ service being hacked circulated with reports claiming that Google failed to notify the markets about the hack fearing it would trigger a large-scale investigation. Later in the day, it was announced that Google had dropped out of bidding for a $10 billion Pentagon data deal. Today, in Europe, the DAX is likely to see some weakness. Yesterday, Daimler, one of its biggest constituents reported that sales had dropped sharply because of the new emissions standards. The same will likely happen for other auto manufacturers like BMW and VW. Yesterday, the DAX declined by 165 points.

The New Zealand dollar was lower than the USD even after positive confidence numbers. The numbers from the National Australian Bank (NAB) showed that confidence rose to 6, which was higher than the 5 that traders were expecting. This ended a slide that started a few months ago after the confidence number reached 13. This is probably a reflection of the fact that executives are more optimistic that the trade war issue will be resolved.

EUR/USD

The EUR/USD pair is trading at 1.1490, which is slightly higher than yesterday’s low of 1.1460. This pair is clearly in a downtrend and currently finding support at these levels. Most indicators show that the pair will likely continue to move downward. The Ichimoku Kinko Hyo indicator points to lower movements. This is confirmed with the volumes indicators like the Money Flow Index (MFI) and oscillators like the Bears Power.

GER30

Yesterday, the DAX ended the day at £11,969. This was slightly higher than the intraday low of £11,890 but lower than the open. Today, with the growth problems among German companies, there is a likelihood that the index will continue to fall. On the hourly chart, the index is now trading below the 50 and 100-day EMA as shown below. It is in line with the middle band of the Bollinger Bands. If the index drops today, traders should watch out for the £11,856 level, which will also mark the end of the inverted cup pattern as shown below.

NZD/USD

The NZD/USD pair remained at low levels after positive confidence numbers from New Zealand. The pair is trading at the 0.6448 level which is slightly higher than yesterday’s close of 0.6426. The RSI has moved from the oversold level of 17 and is currently at 32. Since this happened amidst low volume, this could be a false breakout. Traders should continue to monitor the pair before initiating any trades.

Daily Pivots: (S1) 1.1459; (P) 1.1494; (R1) 1.1529; More.....

There is no follow through selling in EUR/USD after breaching 1.1463. But still, with 1.1549 minor resistance intact, deeper fall is expected. Current decline from 1.1814 should target a test on 1.1300 low. On the upside, above 1.1549 minor resistance will now indicate short term bottoming and bring lengthier consolidation. But for now, we'd hold on to the view that correction from 1.1300 has completed at 1.1814. Thus, in that case, we'd expect upside to be limited well below 1.1814 to bring another decline to 1.1300 eventually.

In the bigger picture, corrective pattern from 1.1300 could have completed at 1.1814 after hitting 38.2% retracement of 1.2555 to 1.1300at 1.1779. 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. On the upside, break of 1.1814 will delay the bearish case and extend the correction from 1.1300 with another rise before completion.