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The USDJPY currency pair is making a small consolidation zone at the -100% Fibonacci target near 114, which is a new decision zone for a bullish breakout or a bearish bounce. The candlestick patterns will confirm the immediate direction, but ultimately, the trend remains bullish and the price could complete wave C (purple) of wave Y of D at higher Fib targets.

The USDJPY currency pair seems to have completed a wave 3 (green) due to the current consolidation zone or the bull flag chart pattern. A break below the support trend line (blue) could indicate a pullback to the Fibonacci retracement levels, whereas a bullish break above the resistance (red) might see the price move higher.

The USDJPY currency pair is showing a new higher high, but the bullish trend channel could still be part of a larger triangle (wave D purple), as long as the price remains below the 78.6% Fibonacci level at 115.95.

The EUR/USD remains in a bearish mode but a potential reversal zone is nearby.

The EUR/USD could make a bullish reversal at the Fibonacciretracement levels of wave X (pink), which could either complete wave X or a wave A (purple) of X. For the moment a new low seems likely unless price manages to break above the resistance trend lines.

The EUR/USD completed an ABC correction (green) within wave 4 (blue) and has now broken below the support trend line (dotted blue). This could be part of a wave 5 (blue) of a potential wave A (purple), although this wave count depends on whether price bounces at, above or near to the support trend line (green).

General Trend:

• Hang Seng declines after returning from holiday
• Financials index weighs on the Australian market
• Fast Retailing expected to report SSS after the market close
• Q3 business confidence data weighs on the NZD
• Few surprises seen in the Reserve Bank of Australia (RBA) policy decision, notes tighter credit conditions

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened +0.1%
• (AU) Australia ACCC commences inquiry into foreign exchange (FX); expected to provide the final report to the Treasurer in May 2019
• (AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES RATES UNCHANGED AT 1.50% (AS EXPECTED)
• (AU) Australia Dept of Industry expects 2018/19 resource exports to rise to A$252B (record) v A$227B y/y
• (AU) Australia Sept CBA Manufacturing PMI: 54.0 v 53.2 prior
• (NZ) New Zealand Q3 NZIER Adjusted business confidence: -28 v -21 prior (lowest level since March 2009)

China/Hong Kong

• Shanghai Composite closed, Hang Seng opened -0.3%
• (CN) China’s narrowing interest rate spread with the US and declining current account surplus have led to some concerns about capital outflows – FT
• (CN) White House Econ Adviser Kudlow: A trade deal with China is not imminent; Pres Trump and China Pres Xi may meet at the G20 summit - TV interview
• (US) US Treasury Sec Mnuchin: China needs to have 'real action' - Fox

Japan

• Nikkei 225 opened +0.5%
• (JP) Japan Sept Monetary Base End of Period: ¥505T v ¥502T prior; Y/Y: 5.9% v 6.9% prior
• (JP) Japan PM Abe said to plan to replace Japan's Defense Minister Onodera as part of cabinet reshuffle - Japanese Press

Korea

• Kospi opened flat
• (KR) South Korea Aug Industrial Production M/M: 1.4% v 0.4%e; Y/Y: 2.5% v 1.3%e
• (KR) South Korea Oct Business Survey: Manufacturing: 78 v 77 prior
• (KR) South Korea Finance Min: Negative job growth on a y/y basis cannot be ruled out in Sept

North America

• US equity markets ended mixed: Dow +0.7%, S&P500 +0.4%, Nasdaq -0.1%, Russell 2000 -1.4%

Europe

• (IT) Italy Fin Min Tria: 2.4% deficit to GDP target is not in line with EU rules but it has precedents; Many other countries have not respected EU fiscal rules in the past
• (IT) Eurogroup Chief Centeno: need more detail to evaluate Italy's 2019 draft budget; draft needs to be finalized
• (UK) UK PM May said to be preparing to limit the UK's ability to strike free trade agreements after Brexit in a concession to the EU - UK Press
• (UK) Former Foreign Min Johnson said to have told senior conservatives that he'd postpone Brexit by at least six months if he became PM
• (FR) Customs Minister Darmanin: French customs ready for worst-case Brexit - French press
• ThyssenKrupp [TKA.DE]: Said to be preparing to exit the DAX index - German Press

Levels as of 01:30ET

• Nikkei 225, flat, ASX 200 -0.8%, Hang Seng -2.1%; Shanghai Composite closed; Kospi -1.1%
• Equity Futures: S&P500 -0.2%; Nasdaq100 -0.2%, Dax -0.3%; FTSE100 -0.2%
• EUR 1.1581-1.1560 ; JPY 114.03-113.81 ; AUD 0.7240-0.7218 ;NZD 0.6618-0.6592
• Dec Gold +0.3% at $1,195/oz; Oct Crude Oil +0.3% at $75.53/brl; Dec Copper -0.4% at $2.775/lb

For the 24 hours to 23:00 GMT, the EUR declined 0.22% against the USD and closed at 1.1577, on Italian budget woes.

On the macro front, Euro-zone's unemployment rate fell to a decade low level of 8.1% in August, in line with market expectations. The unemployment rate had recorded a rate of 8.2% in the previous month. On the other hand, the region's final manufacturing PMI slid to a level of 53.2 in September, marking its lowest level since September 2016 and compared to a level of 54.6 in the prior month. The preliminary figures had indicated a drop to a level of 53.3.

Additionally, Germany's final manufacturing PMI dropped to 53.7 in September, at par with market expectations and confirming the preliminary print. In the preceding month, the PMI had recorded a reading of 55.9. Moreover, the nation's retail sales unexpectedly dropped 0.1% on a monthly basis in August. Retail sales had registered a drop of 0.4% in the prior month.

In the US, data indicated that the US final Markit manufacturing PMI advanced to a level of 55.6 in September, meeting market expectations and confirming the preliminary figures. In the previous month, the PMI had recorded a level of 54.7. Also, construction spending rose 0.1% on a monthly basis in August, compared to a revised gain of 0.2% in the prior month. However, the nation's ISM manufacturing activity index dropped to a level of 59.8 in September, compared to a level of 61.3 in the prior month. Market participants had envisaged the index to ease to a level of 60.0.

In the Asian session, at GMT0300, the pair is trading at 1.1572, with the EUR trading slightly lower against the USD from yesterday's close.

The pair is expected to find support at 1.1549, and a fall through could take it to the next support level of 1.1527. The pair is expected to find its first resistance at 1.1609, and a rise through could take it to the next resistance level of 1.1647.

Looking forward, investors would await Euro-zone's producer price index for August, set to release in a few hours.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP rose 0.05% against the USD and closed at 1.3043, after Britain's Finance Minister, Philip Hammond stated that the European Union was willing to do a Brexit deal.

Data showed that the UK's manufacturing PMI unexpectedly advanced to a level of 53.8 in September, defying market expectations for a fall to a level of 52.5. The PMI had recorded a revised level of 53.0 in the previous month. Further, the nation's number of mortgage approvals for house purchases surprisingly rose to a six-month high level of 66.4K in August, compared to a revised level of 65.2K in the previous month. Market participants had anticipated for the mortgage approvals to ease to a level of 64.5K. Meanwhile, the nation's net consumer credit increased at its weakest pace by £1.1 billion, undershooting market consensus for a rise of £1.3 billion. Net consumer credit had advanced £0.8 billion in the previous month.

In the Asian session, at GMT0300, the pair is trading at 1.3039, with the GBP trading a tad lower against the USD from yesterday's close.

The pair is expected to find support at 1.2995, and a fall through could take it to the next support level of 1.2952. The pair is expected to find its first resistance at 1.3099, and a rise through could take it to the next resistance level of 1.3160.

Going ahead, traders would closely monitor the Nationwide house price index and the Markit construction PMI, both for September, set to release in a few hours.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.06% against the JPY and closed at 114.01.

In the Asian session, at GMT0300, the pair is trading at 113.93, with the USD trading 0.07% lower against the JPY from yesterday’s close.

The pair is expected to find support at 113.81, and a fall through could take it to the next support level of 113.70. The pair is expected to find its first resistance at 114.05, and a rise through could take it to the next resistance level of 114.18.

Going forward, traders would closely monitor Japan’s consumer confidence index for September, set to release in a while.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average

For the 24 hours to 23:00 GMT, the USD rose 0.29% against the CHF and closed at 0.9839.

Data revealed that Switzerland's SVME manufacturing PMI slid to a level of 59.7 in September, compared to a reading of 64.8 in the previous month. Market participants had envisaged the PMI to drop to a level of 62.1. On the contrary, the nation's real retail sales rebounded 0.4% on a yearly basis in August, compared to a revised drop of 0.9% in the prior month. Market participants had anticipated for real retail sales to climb 1.7%.

In the Asian session, at GMT0300, the pair is trading at 0.9839, with the USD trading flat against the CHF from yesterday's close.

The pair is expected to find support at 0.9812, and a fall through could take it to the next support level of 0.9785. The pair is expected to find its first resistance at 0.9861, and a rise through could take it to the next resistance level of 0.9883.

With no macroeconomic releases in Switzerland today, investors would look forward to global macroeconomic releases for further clues.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD declined 0.05% against the CAD and closed at 1.2810.

The Canadian dollar gained ground against the US dollar, after Canada secured a deal for a trilateral trade pact with the US and Mexico to revise the existing North American Free Trade Agreement.

Macroeconomic data indicated that Canada’s manufacturing PMI dropped to a level of 54.8 in September, following a level of 56.8 in the prior month.

On the contrary, the nation’s MLI leading indicator rose 0.1% on a monthly basis in August, after recording a flat reading in the previous month

In the Asian session, at GMT0300, the pair is trading at 1.2805, with the USD trading a tad lower against the CAD from yesterday’s close.

The pair is expected to find support at 1.2776, and a fall through could take it to the next support level of 1.2747. The pair is expected to find its first resistance at 1.2841, and a rise through could take it to the next resistance level of 1.2877.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the AUD slightly declined against the USD and closed at 0.7225.

LME Copper prices declined 0.1% or $8.0/MT to $6172.0/MT. Aluminium prices rose 1.8% or $36.0/MT to $2047.5/MT.

In the Asian session, at GMT0300, the pair is trading at 0.7228, with the AUD trading marginally higher against the USD from yesterday’s close.

The Reserve Bank of Australia (RBA), in its latest policy meeting, retained its benchmark interest rate at 1.50%, in line with expectations.

Overnight data revealed that Australia’s CBA manufacturing PMI advanced to a level of 54.0 in September, rising at its fastest pace since June and compared to reading of 53.2 in the prior month.

The pair is expected to find support at 0.7211, and a fall through could take it to the next support level of 0.7195. The pair is expected to find its first resistance at 0.7240, and a rise through could take it to the next resistance level of 0.7253.

Moving ahead, investors would keep an eye on Australia’s AiG performance of service index for September and building approvals for August, slated to release overnight.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Gold trading flat against the USD and closed at USD1192.70 per ounce.

In the Asian session, at GMT0300, the pair is trading at 1194.80, with gold trading 0.18% higher against the USD from yesterday’s close.

The pair is expected to find support at 1190.00, and a fall through could take it to the next support level of 1185.20. The pair is expected to find its first resistance at 1197.70, and a rise through could take it to the next resistance level of 1200.60.

The yellow metal is trading above its 20 Hr and 50 Hr moving averages.