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Cable eases on Monday after strong two-day rally on Thu/Fri, driven by positive Brexit news hit high at 1.3132. Near-term structure is bullish, along with daily Ichimoku studies, favoring further upside after correction. Daily Tenkan-sen offers immediate support at 1.3069, followed by Kijun-sen at 1.3041, which should ideally contain dips and keep pivotal support at 1.3012 (daily cloud top) intact. Only break and close below daily cloud top would sideline bulls and risk further weakness.

Res: 1.3106, 1.3132, 1.3154, 1.3217
Sup: 1.3069, 1.3041, 1.3012, 1.2980

The Euro stands at the back foot at the beginning of the week and maintains overall bearish bias after last week's recovery attempts were repeatedly capped by daily cloud base.

Stronger dollar on positive US jobs data and China's decision to loosen the policy added to negative outlook on Monday.

Fresh bears are probing again below cracked pivotal support at 1.1497 (Fibo 61.8% of 1.1300/1.1815 ascend) for renewed attack at 1.1563 double-bottom (03/04 Oct low) to signal continuation of downtrend from 1.1815 (24 Sep high) towards 1.1422 (Fibo 76.4%).

Strong bearish momentum on daily/weekly charts favors further downside, with negative signal generated on Friday's close below the base of thick weekly cloud which acted as strong support in past couple of weeks, supporting scenario.

Selling upticks remains favored scenario with 1.1545 resistance (daily cloud base) expected to cap.

Alternative scenario requires break and close above daily cloud (1.1545/1.1577) to ease bearish pressure.

Res: 1.1529, 1.1545, 1.1577, 1.1593
Sup: 1.1483, 1.1463, 1.1422, 1.1394

XAUUSD (1196.56): Gold prices continue the consolidation with the 20-period moving average on the 4-hour chart holding the declines for the moment. We expect the sideways price action in gold prices to continue. The resistance level at 1212.05 remains the upside target that could be tested. To the downside, a break down below the 20-period EMA could signal a retest back to the 1193.40 region. In the near term, gold prices are likely to maintain the ranging price action.

GBPUSD (1.3110): The GBPUSD currency pair managed to break out from the resistance level of 1.3054 – 1.3028 region. The upside bounce could potentially shift the bias to the upside. However, we expect a rebound back to the breached resistance to establish support. Forming support here could mean a possible rebound in price action. The resistance level at 1.3250 is likely to be the target to the upside. In the event of a failure to establish support, the cable could ease back below and settle into a range.

EURUSD (1.1514): The euro currency posted a modest rebound, but price action was stuck near the resistance level area of 1.1547 1.1525 region. With the resistance level now established, price action is expected to trend lower. The lower support at 1.1435 remains the key level of interest to the downside. A break down below this level could potentially push the currency pair lower to the next support level at 1.1315.

Australia released its retail sales report. Data showed that retail sales increased 0.3% on the month, matching estimates. In Japan, the household spending report showed a 2.8% increase on the year. This beat estimates of a flat reading. However, the average cash earnings rose just 0.9% missing estimates of a 1.3% increase. This was, however, better compared to the previous month's revised print of 1.6% increase.

Germany's factory orders report showed a rebound in August. This came amid a decline in domestic demand was offset by foreign demand. Factory orders were seen rising 2.0% on a month over month basis. This reversed a 0.9% decline in July.

The German PPI data was also released which showed that producer prices advanced at the fastest pace in 11 months in August. German PPI rose 3.1% on the year in August extending July's gains of 2.9%.

In the UK, house prices fell unexpectedly. Data from Lloyds Bank and IHS Markit showed housing prices falling 0.2%. This was below estimates of a 0.2% increase.

The NY trading session showed that the U.S. economy added a lower number of jobs. Data from the labor department showed the U.S. economy added 134,000 jobs during the month. This was below estimates of 185,000.

However, the U.S. unemployment rate fell to fresh lows of 3.7% beating estimates and down from previous month's 3.9%. Average hourly earnings rose 2.8% on the year.

The commerce department also released a report showing imports increased more than exports. The data showed the U.S. trade deficit widening in August to $53.2 billion.

Data from Canada showed that the economy posted a sharp rebound in the labor market. Canada's unemployment rate fell to 5.9% in September while adding 63,300 net jobs on a seasonally adjusted basis.

The markets open to a quiet trading day today. The Canadian and the U.S. markets are closed on account of a bank holiday. The European trading session will see the release of the German import prices data. The industrial production numbers follow this and later on the Eurozone Sentix investor confidence report will be coming out.

The US dollar is trading back towards the key 114.00 level against the Japanese yen after price bounced from trendline support following Friday’s disappointing Nonfarm Payrolls job report from the US economy. The USDJPY pair retains a bullish intraday bias while trading inside the well-defined rising channel. Buyers will look to move price back above the 114.06 level, while sellers will attempt to break the 113.55 support level.

The USDJPY pair is intraday bullish while trading above the 113.55 level, key resistance is now found at the 114.06 and 114.58 levels.

If the USDJPY pair moves below the 113.55 level, sellers will likely test towards 112.90 and 112.10 levels.

The British pound has moved back above the key 1.3100 level against the US dollar, as optimism grows that a Brexit deal may soon be struck between the EU and the United Kingdom. The MACD indicator on the four-hour time frame is trending higher and signalling further gains ahead. With an absence of economic data from the United States economy, Brexit news remains the number one driver of sterling.

The GBPUSD pair is only bearish while trading below the 1.3100 level, key support is found at the 1.3056 and 1.3000 levels.

If the GBPUSD pair continues to hold above the 1.3100 level, key technical resistance is found at the 1.3155 and 1.3216 levels.

German industrial production dropped -0.3% mom in August, much worse than expectation of 0.4% mom rise. Recent batch of soft data confirmed that growth momentum has slowed further in 2018. And some concerns were raised as the slowdown could be deeper than expected. In particular, German PMI composite has dropped to a 2-month low of 55.0 in September. Q3 growth is unlikely to match Q2's 0.5%. The government's economic projections to be updated this Thursday will shed some mor lights on the outlook.

Full release here.

The US dollar index rose slightly in the Asian session after a major victory for Donald Trump over the weekend. On Saturday, the Senate voted to confirm Brett Kavanaugh as the next Associate Justice of the U.S. Supreme Court replacing Justice Kennedy who resigned a few months ago. The confirmation ended a week of major political drama. Democrats attacked the judge based on the sexual harassment allegations that had been made against him. They also attacked his temperament. The news helped to unify the Republican Party ahead of the midterms.

Trump said: "I applaud and congratulate the U.S. Senate for confirming our GREAT NOMINEE, Judge Brett Kavanaugh, to the United States Supreme Court."

The Swiss Franc was little moved ahead of key employment data from Switzerland. Shortly after the European markets open, Switzerland will release employment numbers which are expected to show that the national unemployment rate remained unchanged at 2.4%. This number has not changed in the past four months.

The euro was little changed against the US dollar as traders wait for important industrial production data from Germany. They expect the data to show that production rose in September to 0.4% after a contraction of minus 0.4% in August. This data measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

EUR/USD

The EUR/USD pair is trading at the 1.1510 level, which is slightly higher than last week’s low of 1.1463. This price is close to the 38.3% Fibonacci Retracement level and along the middle band of the Bollinger Bands. The momentum indicator crossed the important 100 or zero level while the parabolic SAR indicator is signalling an upward momentum. Today, with no major news expected from the US, Germany’s industrial production data could be the key catalyst for the pair’s movement.

USD/CHF

The USD/CHF pair was little changed in the Asian session today. It is trading at 0.9913, which is slightly lower than last week’s high of 0.9955. The pair has found a strong resistance around this level. The 21-day and 14-day Exponential Moving Averages (EMA) are showing signs that the upward momentum could be ending. The RSI has moved from the overbought level of 70 and is currently at 64. The pair could continue the upward trend until it reaches parity.

USD/JPY

The USD/JPY pair rose slightly in the Asian session. It reached an intraday high of 113.93. This movement was important because the pair reached the 200-day EMA level on the hourly chart below. Today, the pair will likely continue moving up, possibly to test the important level of 114.