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Daily Pivots: (S1) 0.8868; (P) 0.8887; (R1) 0.8897; More...

EUR/GBP breached 0.8875 to 0.8871 but quickly recovered. Intraday bias stays neutral for more consolidations. Outlook is unchanged that whole corrective rise from 0.8620 has completed at 0.9097 and deeper decline is expected. Upside of recovery should be limited well below 0.9051 resistance to bring fall resumption. On the downside, break of 0.8871 will target 61.8% retracement of 0.8620 to 0.9097 at 0.8802 and below.

In the bigger picture, EUR/GBP is staying in long term range pattern from 0.9304 (2016 high). At this point, there is no clear sign of range break out yet. And more corrective trading would continue. On the upside, in case of another rise, we'd stay cautious on strong resistance from 0.9304/5 to limit upside in case of further rally. Meanwhile, if there is another medium term decline, strong support will likely be seen from 0.8303 to contain downside.

Daily Pivots: (S1) 1.6247; (P) 1.6265; (R1) 1.6295; More....

EUR/AUD failed to break 1.6353 resistance and retreated sharply. Consolidation is extending and intraday bias remains neutral. Deeper fall could be seen to 38.2% retracement of 1.5601 to 1.6353 at 1.6066. But downside should be contained well above 1.5886 cluster support (61.8% retracement at 1.5888) to bring rise resumption. On the upside, break of 1.6353 will resume larger up trend to 1.6587 key resistance level.

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 1.5601 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) 1.1230; (P) 1.1246; (R1) 1.1261; More...

EUR/CHF's retreat from 1.1342 is still in progress and intraday bias stays neutral. Outlook is unchanged that in case of deeper fall, we'd continue to expect strong support from key support zone of 1.1154/98 to bring strong rebound. On the upside, above 1.1342 will target 1.1452 resistance first. Break should confirm that whole decline from 1.2004 has completed a target 1.1713 resistance next. However, sustained break of 1.1154/98 will carry larger bearish implications.

In the bigger picture, for now, the 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 1.1207) 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.

AMAZON ticker symbol: AMZN short-term Elliott wave view suggests that the rally to $2050.50 high ended intermediate wave (1) as impulse structure. Down from there, the instrument is doing a pullback in intermediate wave (2). The internals of that pullback unfolding in 3 swing structure with the sub-division of 5-3-5 structure in lesser degree cycles thus favored it to be a zigzag correction.

Below from $2050.50 high, the initial decline to $1917 low ended Minor wave A lower in 5 waves structure. The minute wave ((i)) ended at $1989.89, Minute wave ((ii)) ended at $2010.30 high. Minute wave ((iii)) ended at $1935.21 low and Minute wave ((iv)) bounce ended at $1975.20 high. Then finally a move lower to $1917 low ended Minute wave ((v)) of A. Up from there, the 3 wave bounce to $2009.47 high ended Minor wave B bounce as a zigzag correction.

Down from there, the decline lower in Minor wave C is taking place in another 5 waves structure looking to reach $1875.88-$1844.41 100%-123.6% Fibonacci extension area of Minor wave A-B. Afterwards, the stock is expected to resume the upside in intermediate wave (3) higher ideally or should find support for 3 wave bounce at least. Alternatively, if it exceeds below the 161.8% Fibonacci extension area A-B at $1791.89 then the decline from $2050.50 high could become impulsive structure & could be doing a bigger pullback. We don’t like selling it.

AMAZON 1 Hour Elliott Wave Chart

XAUUSD (1198.88): Gold prices inched higher only to give up the gains and retest the support level at 1197.50. Price action remains mostly muted in gold. If the support holds, then we can expect to see a rebound off the current support. This will pave the way for gold prices to extend gains toward 1219.75 which remains elusive for the moment. To the downside, a close below 1197.50 could keep gold prices extending the declines to 1183.30 support.

GBPUSD (1.3158): The GBPUSD currency pair extended the gains following the rebound off the 20 periods EMA on the 4-hour chart. Price action is expected to inch higher toward 1.3205 which remains the main target for now. A retest of the resistance level here could potentially keep the cable within the range until a breakout emerges. Further gains can be anticipated on a breakout above the resistance level. To the downside, the support at 1.3036 is expected to hold.

EURUSD (1.1694): The EURUSD currency pair rebounded on Monday erasing the losses from last Friday. The bounce comes following the decline to the support area of 1.1656 - 1.1626 level. Price action is now on track to test the next main resistance area at 1.1725. If this resistance level is cleared, we expect to see price action moving toward 1.1830 level as the minimum upside target.

The U.S. Dollar eased back on Monday. The declines came after a renewed threat of trade tariffs. The U.S. administration announced that it will impose new tariffs of 10% on over $200 billion in goods imported from China. A further increase to 25% is expected from January.

President Trump warned that retaliatory measures from China could lead to immediate tariffs on an extra $267 billion in goods of imports.

Data from the U.S. was limited to the Empire State Manufacturing Index. The index slipped to 19 in September. This was lower than the estimates and down from 25.6 from the month before.

In the European session, the British pound posted strong gains, rising to a seven-week high. Brexit news was the primary driver. The EU's chief Brexit negotiator, Michel Barnier told reporters that the talks between the EU and the UK were being conducted in a spirit of good cooperation.

The Eurozone's inflation data confirmed that headline CPI rose 2.0% on the year in August, as expected.

The day starts off with the ECB President Mario Draghi speaking at an event in Paris. Draghi's speech comes in the backdrop of the recent ECB meeting where the central bank did not make any major changes to monetary policy.

The European session is relatively quiet for the remainder of the day.

The NY trading session starts off with the manufacturing sales report from Canada. Forecast points to a 1.0% increase on the month. Later in the evening, the current account and trade balance numbers from New Zealand are due. The data comes ahead of the New Zealand's quarterly GDP report due later in the week

U.S. President Trump moved forward with imposing 10% tariffs on $200 billion of Chinese imports effective next week. Trump's move has obviously taken the trade war with China to a new level, and the confrontation may last longer than what was previously thought. There's no doubt that China's economy will begin feeling the pain given that the U.S. duties now cover almost half of its imports. So, expect to start seeing more aggressive monetary and fiscal actions to reduce the ongoing impact of the trade war. However, it remains unclear to what extent the U.S. economy will be hurt with these tariffs, but definitely corporate and consumer bills will be on the rise in the coming months.

Interestingly the impact onfinancial markets was muted after the announcement. While China's major indices were slightly lower, stocks in Korea and Japan traded in green territory. It seems as if the latest tariff announcement was largely pricedin, but what remains uncertain is how Beijing policymakers will respond. While China cannot match the U.S. tariffs dollar for dollar given the huge trade imbalance, it still has other weapons it could use, including boycotting U.S. products, increasing taxes on earnings of U.S. companies in China, refusing to grant approvals for M&A involving U.S. businesses, and reduce its U.S. debt holdings. Chinese officials have also threatened to walk away from the negotiating table, as they seem to be betting on Republicans losing the midterm elections in November. Investors should be prepared for more short-term downside risks across equity markets given all these uncertainties.

There are also little movements in FX markets as traders remained on the sidelines. The dollar index was treading water after dropping 0.45% on Monday. However, expect the greenback to resume its uptrend if risk aversion dominates again.

Sterling was the best performing currency on Monday, rising to a six-week high against the dollar to trade above 1.3150. Despite no significant progress occurring in Brexit talks, it seems traders are optimistic that a deal will be struck in the coming days. If EU leaders continue to adopt a flexible approach during their talks this week, expect the pound to continue outperforming. However, risks remain within UK politics and that could lead to big swings in the coming weeks.

General Trend:

• Hang Seng underperforms
• Nikkei 225 outperforms amid Monday’s holiday and focus on trade talks
• Japanese steelmakers outperform on hopes regarding US/Japan trade talks
• NY Copper declines over 2%, later pares loss
• (CN) China likely will not send trade delegation to Washington following US announcement on new round of tariffs (HK Press)
• China Securities Regulator official plays down stock market declines
• China HNA Group announces executive changes

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened -0.2%
• (AU) Reserve Bank of Australia (RBA) Sept Meeting Minutes: Reiterates next move in cash rate more likely to be an increase, sees no strong case for near-term adjustment in policy
• (AU) Australia Q2 House Price Index Q/Q: -0.7% v -0.7%e; Y/Y: -0.6% v -0.7%e
• (AU) Australia Debt Agency (AOFM): Priced A$3.75B in Feb 21 2050 Indexed Bonds through syndication, yield 1.16%
• (NZ) New Zealand Aug Non Resident Bond Holdings: 58.2% v 58.7% prior

China/Hong Kong

• Shanghai Composite opened -0.3%, Hang Seng -0.3%
• (CN) USTR publishes tariffs list related to $200B in China goods
• (CN) China Commerce Minister: China has confidence and ability to achieve 2018 targets; Cooperation between the US and China is the only correct choice on trade
• (CN) China Vice Premier said to convene tariff response meeting
• (CN) China Securities Market (CSRC) Official Fang: China has ample fiscal and monetary policy tools to cope with the impact from trade frictions with the US; China preparing for worst scenario on trade issue, sees tariffs negative impact on China GDP of about 0.7 ppt
• (CN) PBoC Advisor Liu: trade war has relatively big impact on expectations; trade war's impact on domestic economy not 'very big', but should watch impact on equity and currency markets
• (CN) According to analysts, China PBoC may announce targeted RRR cut around Oct - China Securities Journal
• (CN) China may announce additional measures to stabilize investment - Chinese Press
• (CN) China PBoC Open Market Operation (OMO): Injects CNY200B in 7 and 14-day reverse repos v skipped prior: Net: CNY200B injection
• (CN) China PBoC set yuan reference rate: 6.8554 v 6.8509 prior
• (HK) Hong Kong Finance Sec Chan: Reiterates Hong Kong dollar (HKD) currency peg is 'very strong'

Japan

• Nikkei 225 opened -0.2%
• (JP) Japan Fin Min Aso: Reiterates specific monetary policy up to BoJ to decide; Understands BoJ Gov Kuroda's view that premature debate on exit strategy will cause market confusion
• (JP) Japan to offer measures to reduce trade surplus with US in upcoming talks in order to avoid tariffs on autos, which is expected to hit Japan the hardest if implemented - Nikkei
• (JP) Japan Economy Min Montegi: No country wants 'tit-for-tat' tariff retaliation; Japan and the US are making final adjustments on the date for bilateral trade meeting, will likely make an announcement 'shortly'

Korea

• Kospi opened -0.7%
• (KR) South Korea President Moon trip to N. Korea today to focus on peace and a new economic relationship on the basis of denuclearization - Korean press

North America

• US equity markets ended lower: Dow -0.4%, S&P500 -0.6%, Nasdaq -1.4%, Russell 2000 -1.1%
• (CA) Canada PM Trudeau: Moving 'close to a decision point on NAFTA', might be days or weeks away

Europe

• (UK) UK Brexit Minister Raab expects the EU to make concessions - German Press
• (UK) UK Prime Min May: under a no-deal Brexit, there would be disruptions but UK has to make a success of a potential no-deal Brexit - BBC interview
• (EU) EU Commissioner Dombrovskis: Trade conflict is raising downside risks to the economy

Levels as of 01:30ET

• Nikkei 225, +1.5%, ASX 200 -0.4%, Hang Seng -0.8%; Shanghai Composite +0.2%; Kospi +0.3%
• Equity Futures: S&P500 -0.1%; Nasdaq100 -0.2%, Dax -0.1%; FTSE100 flat
• EUR 1.1703-1.1666 ; JPY 112.04-111.66 ; AUD 0.7211-0.7143 ;NZD 0.6603-0.6561
• Dec Gold -0.3% at $1,202/oz; Oct Crude Oil -0.5% at $68.33/brl; Dec Copper flat at $2.648 /lb