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With holidays in China, HK and Australia today, and a typhoon in Tokyo, its been tough to get a good feel of local Asia markets given the diminished liquidity. So, the focus has been primarily on the G-10 with the Canadian Dollar hogging the spotlight.

The Canadian Dollar

The Canadian dollar has run into profit-taking at 1.2800. We should trade well into n the 1.2700 handles sooner than later. But after this morning's aggressive move lower, and the lack of a convincing follow through in London, it does appear traders are curbing their enthusiasm. There's a growing sense were not entirely out of the weeds just yet, and since there will be a considerable period before the deal as ratified, Asia and London's traders are tentatively waiting for their Canadian colleagues to grab the baton where the order books should be busy on both sides of the ledger.

The Euro

During little more than one week, the Euro has gone from eyeing the 1.20 penthouse to now facing the reality of the 1.15 outhouse. The Italian budget has hit another bump in the road as Repubblica reports the EU will dismiss the proposal as inadequate. Talk about adding insult to injury as EU policymakers including the ECB had convinced the market it was business as usual and Italy was running effortlessly, now traders will be sitting nervously anxious until the budget is submitted on October 15.

The British Pound

The UK manufacturing PMI for September has risen to 53.8 versus 52.5 expected. GBPUSD has shown an only limited reaction to the data and trades around the 1.3050 level. Cable is stuck in a broader range still getting knocked around by various Brexit headlines. It's impossible to filter out the political nose so best to remain cautious on GBP as it's tough to predict next rate move hence the market is entirely tuning out the data.

The Japanese Yen

Not too unexpectedly with the NKY touching multi-decade highs, USDJPY has breached the 114.00 level. But not the tough part starts as the markets pivots to Friday NFP, Yes, I know its only Monday, but Friday report will take on the tremendous importance for near-term USD momentum.

Local Asia markets

China's September manufacturing data released over the weekend cast a very gloomy shadow over local sentiment. The export components shrunk at the fastest pace since February 2016. Indeed, trade frictions are to blame. Equity markets that are open are trading mixed as the US 10y yield are back up at 3.07, and predictably USD Asia moved higher. While tariffs are causing some fraying at the brick and mortar level, China continues to support the demand side of the equation so while the manufacturing PMI is weak; we could expect some immediate damage control from both the fiscal and monetary policy tweaks, so by no means is the damage irreparable.

Euro rebound expected

Slow start to trading this Monday. EUR/USD dipped to 1.1574 as markets digested the weekend news flow around Brexit, soft EU CPI (Consumer Price Index) and the Italian budget. On Friday, Italian yields rose to a multi-year high of 3.20%, pressing the Euro lower. Investors are less afraid of the fiscal consequences of a 2.4% deficit, then a weakening relationship with Brussels and credit deterioration. USD firmed on last-minute NAFTA deal. The new USMCA (United States-Mexico-Canada Agreement) will replace the old NAFTA agreement.

In the European session, Italy's public finances will dominate when the Eurogroup finance ministers meet today. It's unlikely that we will see any market-moving headlines, however, as the meeting will focus on EU integration, specifically ESM reform. While the Euro looks to be suffering from a thousand cuts, we don't see much additional upside in USD. The Fed increased policy rates as was universally expected, but the 10-year note yields actually fell — an indication that pricing for the Fed path is completely priced in. With limited support from the US yield curve, expect USD to weaken moving forward. Fading confidence in the next stage of USD bullish rally and short covering has allowed ZAR (South African Rand), TRY (Turkish Lira), and RUB (Russian Ruble), the most-sold Emerging Market currencies, to rebound impressively.

Brexit to weigh on the British Pound

We anticipate the sterling will see further selling heading into late October. Over the weekend, Boris Johnson attacked Prime Minister Theresa May's Chequers plan calling it "deranged' and "entirely preposterous”. The vicious attack indicated how divisive the subject remains. To secure support at this week's Conservative Party conference, May is likely to take a hawkish stance in her keynote speech on Wednesday in Birmingham. Should May take a hard line, this will generate additional friction. We remain constructive on EUR/GBP watching for a reversal of weakness to regain the 0.9000 level.

Notes/Observations

• European Manufacturing PMIs mixed as risk-on sentiment drives markets higher -US futures sharply higher; US agrees trilateral trade deal with Mexico which will be called 'USMCA'

Asia:

• China September Caixin and Official Government Manufacturing PMI fall short of consensus
• Japan Tankan Q3 Large Manufacturing Index marks 3 straight fall and registers lowest reading since June 2017; Outlook and All Industry Capex fall short of forecasts

Europe:

• September Manufacturing readings in Europe mixed: Spain, Italy, Euro Zone missed forecasts, UK beats, Germany and France confirmed prelim readings.
• IHS notes Germany export Sales fell for the first time in three years, gloomiest outlook for output since May 2015 -La Repubblica reports that the EU Commission set to reject Italy's budget plans in November

Americas

• US and Canada agree new trilateral trade deal with Mexico which will be called 'USMCA'
• Tesla shares up over 13% in premarket after Elon Musk reached agreement with the SEC; relinquished Chairman role but remains as CEO

Macro

• (CH) China: The NBS manufacturing PMI fell to 50.8 in September, from 51.3 in August. The new export order sub-index fell to 48.0 from 49.4, and the imports to 48.5. Both at their weakest levels since February 2016 reflecting the increasing impact of the U.S.-China trade war on China’s manufacturing export sector.
• (SK) South Korea: September exports fell -8.2% y/y with the government reporting it was mainly due to Chuseok holiday. As one of the world’s most export-oriented economies, South Korea is sensitive to global growth and the export reading is a notoriously accurate global cyclical indicator. Thus October's reading will be eyed for evidence of whether this was a one-off
• (US) US: The NAFTA (USMCA) deal will not be voted on in the U.S. until 2019, which could see a Democratic controlled House and/or Senate and hence be a major roadblock for President Trump to gain approval. While formal approval is still due, the deal will sharply reduce uncertainty over trade that has been a headwind for some firms in Canada, Mexico and the U.S. The deal adds to the probability of a 25 bps rate hike from the Bank of Canada at their October 24 meeting.
• (UK) Eurozone: The final Eurozone manufacturing PMI for September was revised slightly lower to 53.2 from 53.3 in the flash reading and down from 54.6 in August . MarkIt highlighted that exports rose only slightly, which weighed on total orders growth as well as production, with global trade concerns pushing confidence down to a near three year low. The all-important German number was confirmed at a 25 month low.
• (IT) Italy: The Italian PMI reading hit a 25 month low of 50.0 stalling for the first time in two years. It adds to the risk that the manufacturing sector will slide into a recession as political concerns and the government's expected confrontation with the EU add to trade uncertainties. MarkIt said the "survey paints the worst trade picture for over five years, with export growth having slumped sharply from a series record high in late 2017 to near-stagnation in September".
• (DE) Germany: Aug retail sales unexpectedly fell-0.1% m/m against expectations for a rebound of 0.5% m/m from the -0.4% m/m drop in July. The annual rate still improved to 1.6% y/y from 0.9% y/y in the prior month, but the second consecutive drop over the month left the three month trend rate at 0.1%, the lowest since April. Worth caveating that German retail sales are often subject to heavy revisions and only cover a portion of overall consumption.

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx50 +0.6% at 3,421, FTSE +0.1% at 7,520, DAX +0.7% at 12,335, CAC-40 +0.4% at 5,513, IBEX-35 +0.6% at 9,448, FTSE MIB 1.5% at 21,021, SMI +0.3% at 9,118, S&P 500 Futures +0.6%]
• Market Focal Points/Key Themes: European indices open mixed with a slight positive bias, later to move broadly positive as the session wore on (notable exception being Portugal); risk sentiment positive after new US a-nd Canada reach trade agreement; energy stocks supported by crude prices; financials among worst performing sectors; Israel and Cyprus closed for holiday; facebook disclosed accounts were hacked, supporting net security firms; airlines impacted following profit warning from Ryanair; upcoming events expected in the US session include earnings Cal-Maine Foods, as well as monthly US auto sales data

Equities

• Consumer discretionary: Casino Guichard-Perrachon CO.FR +0.8% (asset sale), Hugo Boss BOSS.DE +3.5% (analyst action), Just Group JUST.UK -8.8% (CFO to step down), Kaufman & Broad KOF.FR +5.3% (results, analyst action), Ryanair RYA.UK -8.4% (outlook)
• Financials: FBD Holdings FBD.IE +2.5% (note buyback)
• Healthcare: Realm Therapeutics RLM.UK +6.1% (takeover interest)
• Industrials: Linde AG LIN.DE +1.6% (merger approval in China), Trelleborg TRELB.SE -1.9% (analyst action)
• Materials: Avocet Mining AVM.UK -21.3% (results)
• Technology: Computacenter Plc CCC.UK +1.0% (acquisition)
• Telecom: Telecom Italia TIT.IT -1.9% (analyst action)

Speakers

• (UK) Fin Min Hammond: what we need to do is to protect our trading relations with EU; we don't want no-deal Brexit with EU
• (IN) Govt says intervening on IL&FS due to bearing on economy; management needed to stop financial collapse of IL&FS - US financial press
• (IT) Italy's EU Affairs Minister Savona: no discussion on Euro - Italian press

Currencies

• The dollar Index trades weaker on risk-on sentiment, USDTRY dips below 6 down over 1.4%.
• The Indian Rupee continues to drop with the USDINR pair rising once again approaching 73 as Oil continues to rise nearing a 4 year high.

Fixed Income

• Bund Futures trades at 158.60 down 30 ticks as as BTPs pare losses, Bund futures block supports spread tightening. A downside break of 158.25 sees 157.69 initially.
• Gilt futures trades at 120.78 down 26 ticks following the move in Treasuries. Continued support at 120.50, with a continued move higher targeting 123.93 then 124.00.
• Friday's liquidity report showed Thursday's excess liquidity fell from €1.841T to €1.824T. Use of the marginal lending facility stayed rose from €29M to €130M.
• Corporate issuance saw high grade issuers raise $12.7B last week

Economic Data:

• (ES) SPAIN SEPT MANUFACTURING PMI: 51.4 V 52.6E (lowest since Aug 2016)
• (UK) SEPT MANUFACTURING PMI: 53.8 V 52.5E (26th month of expansion)
• (IT) ITALY SEPT MANUFACTURING PMI: 50.0 V 50.2E
• (FR) FRANCE SEPT FINAL MANUFACTURING PMI: 52.5 V 52.5E
• (DE) GERMANY SEPT FINAL MANUFACTURING PMI: 53.7 V 53.7E (confirms 45th month of expansion)
• (EU) EURO ZONE SEPT FINAL MANUFACTURING PMI: 53.2 V 53.3E (confirms 62nd month of expansion)
• (DE) GERMANY RETAIL SALES M/M: -0.1% V +0.5%E; Y/Y: 1.6% V 1.6%E
• (UK) AUG MORTGAGE APPROVALS: 66.4K V 64.5KE
• (UK) AUG NET CONSUMER CREDIT: £1.1B V £1.3BE; NET LENDING: £2.9B V £3.5BE
• (EU) EURO ZONE AUG UNEMPLOYMENT RATE: 8.1% V 8.1%E
• (IN) INDIA SEPT MANUFACTURING PMI: 52.2 V 51.7 PRIOR (14th month of expansion)
• (UK) Aug M4 Money Supply M/M: 0.2% v 0.9% prior; Y/Y: 1.2% v 2.1% prior
• (CZ) Czech Sept Manufacturing PMI: 53.4 v 54.4e (26th month of expansion)
• (CH) Swiss Sept Manufacturing PMI: 59.7 v 62.1e
• (CH) Swiss Aug Real Retail Sales Y/Y: +0.4% v +1.7%e
• (ES) Spain Sept Adjusted Retail Sales Y/Y: 0.3% v 0.4%e; Retail Sales (unadj) Y/Y: 0.3% v -0.6% prior
• (GR) Greece Sept Manufacturing PMI: 53.6 v 53.9 prior (16th month of expansion)
• (IT) ITALY AUG UNEMPLOYMENT RATE: 9.7% V 10.5%E
• (PL) Poland Sept Preliminary CPI M/M: 0.2% v 0.2%e; Y/Y: 1.8% v 1.9%e
• (NO) Norway Sept Manufacturing PMI: 55.7 v 56.4e (3rd month of expansion)
• (NL) Netherlands Sept Manufacturing PMI: 59.8 v 59.1e (61st month of expansion)
• (TR) Turkey Sept Manufacturing PMI: 42.7 v 46.4 (6th straight contraction)
• (PL) Poland Sept Manufacturing PMI:50.5 v 51.3e (46th month of expansion)
• (HU) Hungary Sept Manufacturing PMI: 53.8 v 56.2 prior (34th month of expansion)
• (SE) Sweden Sept Manufacturing PMI: 55.2 v 53.5e
• (RU) Russia Sept Manufacturing PMI: 50.0 v 49.4e (1st month of non-contraction)
• (IE) Ireland Sept Manufacturing PMI: 56.3 v 57.5 prior (64th month of expansion)
• (DK) Denmark Sept Manufacturing PMI Survey: 53.2 v 59.1 prior
• (ZA) South Africa Sept Manufacturing PMI: 43.2 v 44.6e (BE) Belgium Aug Unemployment Rate: 6.5% v 6.6% prior

Looking Ahead

•  07:25 (BR) Brazil Central Bank Weekly Economists Survey
• 07:30 (CL) Chile Sept International Reserves: No est v $36.8B prior
• 07:30 (CL) Chile Sept Trade Balance: No est v -$0.3B prior
• 07:30 (IN) India Aug Eight Infrastructure (key industries) Y/Y: No est v 6.6% prior
• 08:00 (CZ) Czech Sept Budget Balance (CZK): No est v 14.8B prior
• 08:05 (UK) Baltic Dry Bulk Index
• 08:30 (CA) Canada Aug MLI Leading Indicator M/M: No est v 0.1% prior
• 09:00 (BR) Brazil Sept Manufacturing PMI: No est v 51.1 prior
• 09:30 (CA) Canada Sept Manufacturing PMI: No est v 56.8 prior
• 09:45 (US) Sept Final Markit Manufacturing PMI: 55.6e v 55.6 prelim
• 10:00 (MX) Mexico Central Bank Economist Survey
• 10:00 (US) Aug Construction Spending M/M: 0.4%e v 0.1% prior
• 10:00 (US) Sept ISM Manufacturing: 60.0e v 61.3 prior; Prices Paid: 71.4e v 72.1 prior
• 10:00 (MX) Mexico Aug Total Remittances: No est v $2.9B prior
• 10:30 (MX) Mexico Sept Manufacturing PMI: No est v 50.7 prior
• 12:00 (IT) Italy Sept New Car Registrations Y/Y: No est v 9.5% prior
• 13:00 (MX) Mexico Sept IMEF Manufacturing Index: No est v 51.6 prior; Non-Manufacturing Index: No est v 49.9 prior
• 16:00 (US) Weekly Crop Progress Report

The US dollar has moved below the 112.00 level against the Japanese yen on concerns that US President Donald Trump will announce new trade tariffs on Chinese imports later today. Despite the move below the 112.00 support level, the USDJPY pair remains intraday bullish while trading above the 111.75 level. The bullish inverted head and shoulders pattern across the four-hour time frame suggests that price could reach the 113.00 level.

The USDJPY pair remains bullish while trading above the 111.75 level, key resistance is found at the 112.16 and 112.80 levels.

If the USDJPY pair moves below the 111.75 level, key support is found at the 111.37 and 110.90 levels.

The euro currency has moved away from the worst trading levels of the week so far against the US dollar, as the greenback gives back earlier gains. The EURUSD pair has moved back towards the 1.1650 level, which was a key resistance area buyers struggled to break before last Thursday’s strong move higher. Short-term momentum is currently with buyers as the MACD indicator across the one-hour timeframe continue to trend higher.

The EURUSD pair retains a bullish intraday bias while trading above the 1.1600 level, key resistance is found at the 1.1700 and 1.1730 levels.

If the EURUSD pair moves below the 1.1600 level, sellers will likely to test towards the 1.1577 and 1.1528 support levels.

Daily Pivots: (S1) 147.57; (P) 148.11; (R1) 148.67; More...

Intraday bias in GBP/JPY remains neutral as consolidation from 149.70 is extending. With 145.67 support intact, outlook stays bullish and further rally is expected. 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.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.16402
Open: 1.16158
% chg. over the last day: -0.27
Day's range: 1.15739 – 1.15873
52 wk range: 1.0571 – 1.2557

There are sales on the EUR/USD currency pair. The euro is declining against the US dollar due to the concerns regarding the budget of Italy. At the moment, the EUR/USD quotes are consolidating. The key support and resistance levels are: 1.15700 and 1.16100, respectively. We recommend opening positions from these marks. The EUR/USD currency pair has the potential for further decrease.

The news feed on 2018.10.01:

The index of economic activity in the manufacturing sector of Germany at 10:55 (GMT+3:00);

The index of economic activity in the manufacturing sector of the US from ISM at 17:00 (GMT+3:00).

Indicators point to the power of sellers: the price has fixed below 50 MA and 200 MA.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell EUR/USD.

Stochastic Oscillator is located in the neutral zone, the %K line is above the %D line, which signals to buy EUR/USD.

Trading recommendations

Support levels: 1.15700, 1.15400, 1.15000
Resistance levels: 1.16100, 1.16500, 1.16800

If the price fixes below the support level of 1.15700, the EUR/USD quotes are expected to fall. The movement is tending to 1.15400-1.15000.

An alternative may be the growth of the EUR/USD currency pair to 1.16400-1.16700.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.30730
Open: 1.30379
% chg. over the last day: -0.39
Day's range: 1.30242 – 1.30382
52 wk range: 1.2361 – 1.4345

On Friday, the bearish sentiment prevailed on the GBP/USD currency pair. The British pound weakened against the US dollar after the publication of a weak report on UK GDP. GDP (y/y) fell to 1.2% in the second quarter, while experts expected 1.3%. GDP (q/q) counted to 0.4%, as investors expected. At the moment, the key support and resistance levels are: 1.30200 and 1.30600, respectively. The positions should be opened from these marks.

At 11:30 (GMT+3:00), the index of economic activity in the UK manufacturing sector will be published.

Indicators point to the power of sellers: the price has fixed below 50 MA and 200 MA.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell GBP/USD.

Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which signals to buy GBP/USD.

Trading recommendations

Support levels: 1.30200, 1.29800
Resistance levels: 1.30600, 1.31000, 1.31400

If the price fixes below the support level of 1.30200, the GBP/USD quotes are expected to fall. The movement is tending to 1.29800-1.29600.

An alternative may be the growth of the GBP/USD currency pair to 1.31000-1.31400.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.30409
Open: 1.28477
% chg. over the last day: -0.53
Day's range: 1.28184 – 1.28436
52 wk range: 1.2059 – 1.3795

Aggressive sales are observed on the USD/CAD currency pair. On Friday, the decline in quotes exceeded 200 points. Demand for Canadian currency is still at a high level. Optimistic report on Canada's GDP supports Loonie. Governor of the Bank of Canada said that in the near future the regulator could consider raising interest rates. It also became known that Canada agreed to join the trade agreement with the US and Mexico. The new agreement will be called the US-Mexico-Canada Agreement (USMCA). At the moment, the key support and resistance levels are: 1.28100 and 1.28500, respectively. We recommend looking for entry points to the market from these levels.

Today, the publication of important economic reports from Canada is not planned.

Indicators point to the power of sellers: the price has fixed below 50 MA and 200 MA.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell USD/CAD.

Stochastic Oscillator is located in the neutral zone, the %K line is below the %D line, which also indicates a decline in quotes.

Trading recommendations

Support levels: 1.28100, 1.27600
Resistance levels: 1.28500, 1.29000, 1.29500

If the price fixes below 1.28100, we recommend looking for entry points to the market to open short positions. The target level for profit-taking is 1.27600-1.27400.

Alternative option. If the price fixes above the resistance level of 1.28500, the correction of the USD/CAD quotes is expected. The movement is tending to 1.29000-1.29200.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 113.360
Open: 113.703
% chg. over the last day: +0.27
Day's range: 113.701 – 113.761
52 wk range: 104.56 – 114.74

There is an upward trend on the USD/JPY currency pair. During the Friday’s and today's trading, the growth of quotes was almost 100 points. At the moment, local support and resistance levels are: 113.700 and 114.100, respectively. The positions should be opened from these marks. The trading instrument has the potential for further growth.

During the Asian trading session, weak statistics from Tankan have been published.

The price has fixed above 50 MA and 200 MA, which indicates the bullish sentiment.

The MACD histogram is located in the positive zone, above the signal line, which gives a strong signal to buy USD/JPY.

Stochastic Oscillator is in the overbought zone, the %K line is crossing the %D line. There are no accurate signals.

Trading recommendations

Support levels: 113.700, 113.350, 113.000
Resistance levels: 114.100, 114.500

If the price fixes above the local resistance of 114.100, further growth of the USD/JPY currency pair is expected. The movement is tending to 114.500-114.700.

An alternative may be the correction of the USD/JPY quotes to the level of 113.500-113.350.

The US currency shows positive dynamics. On Friday, the US dollar index (#DX) closed in the positive zone (+0.23%). The US currency is supported by the differential of interest rates, as well as optimistic economic reports. Financial market participants expect a report on the US labor market for September.

As it became known, Canada agreed to join the trade agreement with the US and Mexico. The new agreement will be called the US-Mexico-Canada Agreement (USMCA) and will replace the North American Free Trade Agreement (NAFTA).

The euro is declining against the US dollar due to concerns regarding Italy. On Friday, Italy submitted a budget for the next year, which foresaw a deficit of 2.4% of GDP. This indicator of a deficit is three times higher than the previous directions of Italy’s government. The British pound also weakened against the US dollar after the publication of a weak report on UK GDP. GDP (y/y) fell to 1.2% in the second quarter, while experts expected 1.3%. GDP (q/q) counted to 0.4%, as investors expected.

The "black gold" prices are growing. At the moment, futures for the WTI crude oil are testing a mark of $73.40 per barrel.

Market Indicators

On Friday, there was a variety of trends in the US stock market: #SPY (+0.01%), #DIA (+0.06%), #QQQ (-0.02%).

At the moment, the 10-year US government bonds yield is at the level of 3.05-3.06%.

The news feed on 2018.10.01:

The index of economic activity in the manufacturing sector of Germany at 10:55 (GMT+3:00);

The index of economic activity in the manufacturing sector of the UK at 11:30 (GMT+3:00);

The index of economic activity in the manufacturing sector of the US from ISM at 17:00 (GMT+3:00).

The GBP/USD currency pair has dropped from the recent highs, but it has still been bought on dips. In the lack of Brexit news lately, we have seen a bullish market that has been supported by the latest UK CPI numbers. Today, the manufacturing PMI (Purchasing manager Index) is on the table, scheduled for 8:30 AM GMT. The PMI is a leading indicator of economic health as businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy. Don't forget to follow our Forex calendar for all regular updates on the news,economic announcements, forecasts and much more.

Technically, the GBP/USD currency pair has formed an ascending trend line. At this point the price is struggling to bounce from the POC zone 1.2980-1.3015. A sustained bounce and positive bullish momentum should lead the price to pivot point resistance levels - 1.3077 and 1.3102. Only a strong close above 1.3102 could get the price towards 1.3177. Rejections from the POC 2 zone 1.2845-95 are also possible, as long as the 88.6 fib lies exactly at S3 and S2 support. After the Manufacturing PMI numbers today we should see slightly higher than usual volatility so be prepared to react to price action as usual.

Pivot Lines - Weekly Support and Resistance

POC - POC - Point Of Confluence (The zone where we expect the price to react - aka the entry zone)

Daily Pivots: (S1) 131.49; (P) 132.09; (R1) 132.61; More....

Intraday bias in EUR/JPY remains neutral at this point. With 130.86 resistance turned support intact, near term outlook stays bullish and further rally is in favor. On the upside, above 133.12 will target 100% projection of 124.89 to 130.86 from 127.85 at 133.82 first. Break will target 137.49 high. However, firm break of 130.86 will turn focus back to 127.85 support.

In the bigger picture, current development suggests that EUR/JPY has 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 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.