Sample Category Title

Daily Pivots: (S1) 0.8751; (P) 0.8800; (R1) 0.8827; More...

Intraday bias in EUR/GBP remains on the downside as this point. Current fall from 0.9097 is in progress for 0.8620 low. 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) 1.6276; (P) 1.6316; (R1) 1.6382; More....

EUR/AUD fails to take out 1.6353 resistance so far and intraday bias is turned neutral first. Further rally is expected as long as 1.6175 support holds. Decisive break of 1.6353 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.

Daily Pivots: (S1) 1.1408; (P) 1.1429; (R1) 1.1449; More...

Intraday bias in EUR/CHF remains neutral as it still cannot take out 1.1452 resistance yet. 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. On the downside, however, break of 1.1361 minor support will suggest rejection by 1.1452. And intraday bias will be turned back to the downsides for retesting 1.1154/98.

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.

Daily Pivots: (S1) 1.1486; (P) 1.1518; (R1) 1.1551; More.....

Intraday bias in EUR/USD remains neutral for consolidation above 1.1463 temporary low. Stronger recovery could be seen. But upside should be limited below 1.1623 minor resistance to bring fall resumption. As noted before, rebound from 1.1300 has completed at 1.1814 already. Below 1.1463 will bring retest of 1.1300 low.

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.

Daily Pivots: (S1) 1.3039; (P) 1.3080; (R1) 1.3157; More...

Intraday bias in GBP/USD remains on the upside for the moment. Further rise should be seen to retest 1.3297 resistance. But still, for now, we'd expect strong resistance from 1.3316 key fibonacci level to limit upside to bring down trend resumption. On the downside, below 1.3002 minor support will turn bias back to the downside for 1.2921 first.

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 (now at 1.4062). 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) 0.9902; (P) 0.9928; (R1) 0.9947; More...

Intraday bias in USD/CHF remains neutral for consolidation below 0.9954 temporary low. Deeper pull back cannot be ruled out. But downside should be contained by 38.2% retracement of 0.9541 to 0.9954 at 0.9796 to bring another rally. On the upside, break of 0.9954 will target 1.0067 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.

Daily Pivots: (S1) 113.49; (P) 113.79; (R1) 114.03; More...

Intraday bias in USD/JPY remains neutral for the moment. A short term top could be in place at ahead of 114.73 resistance, on bearish divergence condition in 4 hour MACD. On the downside, break of 113.51 minor support will bring deeper pull back to 38.2% retracement of 110.37 to 114.54 at 112.94. We'd expect strong support from there to contain downside and bring rebound. On the upside, decisive break of 114.73 will confirm larger bullish case. Next target will be 118.65 resistance.

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.

Daily Pivots: (S1) 1.2905; (P) 1.2931; (R1) 1.2970; More...

USD/CAD's rebound from 1.2781 extends higher today. But for now it's limited well below 1.3081 resistance, and such rebound is still viewed as a correction. On the downside, below 1.2886 minor support will turn bias to the downside for 1.2781 first. Break of 1.2781 will extend whole decline from 1.3385 to next fibonacci level at 1.2567, which is close to 1.2526 support. However, break of 1.3081 will turn outlook bullish for 1.3225 resistance.

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) 0.7032; (P) 0.7059; (R1) 0.7077; More...

AUD/USD is losing some downside momentum as seen in 4 hour MACD. But intraday bias stays on the downside with 0.7096 minor resistance intact. Current decline should target 61.8% projection of 0.7676 to 0.7084 from 0.7314 at 0.6948 next. Though, above 0.7096 will turn intraday bias neutral and bring consolidations. Recovery could be seen to 4 hour 55 EMA (now at 0.7152). But upside should be limited well below 0.7314 resistance to bring fall resumption.

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.

Risk aversion continues in Asian market but there is no disastrous development. Chinese stocks are back from holiday, down -3%. That's just playing catch up to last week's broad based decline in other Asian markets. China's RRR cut on Sunday stabilized sentiments somewhat, without giving it any lift though. At the time of writing, Hong Kong HSI is down -0.85%, Singapore Strait Times is down -0.58%. Japanese Nikkei is on holiday.

The forex markets are rather quiet. Australian and New Zealand Dollar trade mildly higher, paring last week's losses. Swiss Franc and Dollar and firm up slightly. Canadian Dollar, on the other hand, suffers fresh selling and is trading as the weakest one so far. As US and Canada markets will be on holiday today, activity could remain subdued.

Technically, one development to note is EUR/AUD's retreat today which might hint on rejection by 1.6353 key near term resistance. A pull back in EUR/AUD could either be accompanied by renewed selling in EUR/USD through 1.1463 temporary low, or lift AUD/USD for recovery, or both.

China lowers RRR by 1% for some banks to release CNY 750B funds

China's central bank PBoC announced on Sunday to cut the reserve requirement ratio (RRR) for some lenders by 1%, effective October 15. According to the bank's statement, this will release a total of CNY 1.2T. Of which, CNY 0.45T will be used to repay existing medium-term funding (MLF) facilities which will mature on the same date. The cut will apply to large commercial banks, joint-stock commercial banks, city commercial banks, non-county rural commercial banks and foreign banks.

PBoC said that objective of the RRR cut is to "optimize the liquidity structure and enhance the financial ability of financial services." Release of CNY 750B of funds can "increase the financial institutions' support for small and micro enterprises, private enterprises and innovative enterprises, promote the vitality and resilience of economic innovation, enhance the growth of endogenous economic growth, and promote the healthy development of the real economy."

PBoC also maintained that despite the RRR cut, monetary policy is "stable and neutral" and the "orientation has not changed". It added that the cut added liquidity but monetary policy is "not relaxed while market interest rate is stable. PBoC does not expect "depreciation pressure" on the Chines Yuan after the move.

China Caixin PMI services rose to 53.1, PMI composite composite at 52.1

China Caixin PMI services rose to 53.1 in September, up from 51.5 and beat expectation of 51.5. Caixin PMI composite rose 0.1 to 52.1, showing that overall business activity expanded modestly at the end of Q3. Still, the rate of activity growth remains lackluster compares to earlier in 2018.

Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said in the release that the PMI composite indicated "stable" performance for the month. However, "demand remained subdued as the growth rate for new orders, although marginally higher than the previous month, lingered at a low level." Also, "the deterioration in employment will test policymakers' determination in pressing ahead with reforms." The employment sub-index hit the lowest level since August 2016.

Japan Abe welcomes UK to join TPP with open arms

Japan Prime Minister Shinzo Abe said in a Financial Times interview that he would welcome UK to join the Trans-Pacific Partnership "with open arms". Abe's words could be used by Brexiteers to reaffirm their stance that there are more opportunities outside of the EU. On the other hand, it's also a clear signal that Japan is sticking with the trade pact despite US withdrawal under Trump. And the preserving the TPP could be at a very high priority during the trade negotiation with the US.

On Brexit, Abe urged "that both sides can contribute their wisdom and at least avoid a so-called disorderly Brexit." Also, he hoped that "the negative impact of Brexit to the global economy, including Japanese businesses, will be minimized."

Irish Coveney said Brexit text 90% done, outstanding issues predominantly Ireland related

Irish Foreign Minister Simon Coveney the Brexit withdrawal treaty is "already about 90% agreed in terms of text". And, "the issues that haven't been signed off on yet relate predominantly to Ireland and what's needed now is the two negotiating teams to lock themselves in a room for the next 10 days."

European Commission President Jean-Claude Juncker said earlier in the weekend that "the rapprochement potential between both sides has increased in recent days". He added, it's unsure whether the work will be finished in October, but "If not, we'll do it in November." And he emphasized EU's "will is unbroken to reach agreement"

European Council President Donald Tusk also said "We will try for it in October... and I think there is a chance to have an accord by the end of the year."

US inflation, UK production, ECB accounts and China trade balance ahead

Looking ahead, the economic calendar is relatively light this week. US CPI and PPI inflation will be a major focus, along side UK production. ECB meeting accounts will be read carefully too but shouldn't reveal anything different from ECB's forward guidance. That is, interest rates will remain at present levels at least through summer of 2019. China trade balance will also be another point of interest, for revealing how the tariffs affect trade with the US.

• Monday: Swiss unemployment rate; German industrial production; Eurozone Sentix investor confidence
• Tuesday: UK BRC retail sales monitor; Australia NAB business confidence; Germany trade balance; Canada housing starts
• Wednesday: Australia Westpac consumer confidence; Japan machine orders; UK industrial and manufacturing productions, trade balance, GDP; Canada building permits; US PPI
• Thursday: UK RICS house price; Japan PPI; ECB meeting accounts; Canada new housing price index; US CPI, jobless claims
• Friday: New Zealand BusinessNZ manufacturing index; Australia home loans; China trade balance; Japan tertiary industry index; Eurozone industrial production; German CPI final; US import prices, U of Michigan consumer sentiment

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.7032; (P) 0.7059; (R1) 0.7077; More...

AUD/USD is losing some downside momentum as seen in 4 hour MACD. But intraday bias stays on the downside with 0.7096 minor resistance intact. Current decline should target 61.8% projection of 0.7676 to 0.7084 from 0.7314 at 0.6948 next. Though, above 0.7096 will turn intraday bias neutral and bring consolidations. Recovery could be seen to 4 hour 55 EMA (now at 0.7152). But upside should be limited well below 0.7314 resistance to bring fall resumption.

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.

Economic Indicators Update