Sample Category Title

Daily Pivots: (S1) 0.8798; (P) 0.8836; (R1) 0.8859; More...

Break of 0.8847 minor support suggests that rebound form 0.8688 has completed at 0.8923. More importantly, the decline from 0.9305 is possibly still in progress. Intraday bias is back on the downside for 0.8688 support first. Break will target 0.8303 key support around. This will now be the favored case as long as 0.8923 resistance holds.

In the bigger picture, there are various ways to interpret price actions from 0.9304 high. But after all, firm break of 0.9304/5 is needed to confirm up trend resumption. Otherwise, range trading will continue with risk of deeper fall. And in that case, EUR/GBP could have a retest on 0.8303. But we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside.

Daily Pivots: (S1) 1.5229; (P) 1.5284; (R1) 1.5317; More....

EUR/AUD's decline from 1.5770 extends lower and focus is now on 1.5226 key support level. As long as this support holds, further rise will still be in favor. Break of 1.5430 minor resistance will now indicate completion of the correction from 1.5770 and turn bias back to the upside for retesting 1.5770. However, sustained break of 1.5226 will indicate larger reversal and target 1.4949 support next.

In the bigger picture, we're holding on to the view that corrective decline from 1.6587 medium term top (2015 high) has completed at 1.3624. Rise from 1.3624 is expected to extend to retest 1.6587. We'll hold on to this bullish view as long as 1.5226 resistance turned support holds. Firm break of 1.6587 will resume long term rise from 1.1602 (2012 low). However, sustained break of 1.5226 will indicate trend reversal and target 1.3624 again.

Daily Pivots: (S1) 152.96; (P) 153.31; (R1) 153.76; More...

No change in GBP/JPY's outlook even though it's losing upside momentum. As long as 151.74 minor support holds, further rally is expected. Current rise should target 61.8% projection of 139.29 to 152.82 from 146.96 at 155.32 first. Break will target 100% projection at 160.49 next. However, firm break of 151.74 will turn focus back to 149.40 support instead.

In the bigger picture, it now looks like GBP/JPY has finally taken out 38.2% retracement of 195.86 to 122.36 at 150.43. Medium term rise from 122.36 should be targeting 61.8% retracement at 167.78. This will now be the favored case as long as 146.96 support remains intact.

Daily Pivots: (S1) 134.87; (P) 135.59; (R1) 136.05; More....

The pull back from 136.63 extends lower today. But at this point, we'd still downside to be contained by 134.39 resistance turned support to bring another ally. Above 136.63 will extend the larger up trend towards 61.8% projection of 114.84 to 134.39 from 132.04 at 144.12. Nonetheless, firm break of 134.39 will be an early sign of trend reversal and turn focus back to 132.04 key support.

In the bigger picture, medium term rise from 109.03 (2016 low) is seen as at the same degree as the down trend from 149.76 (2014 high) to 109.03 (2016 low). It should now be targeting 141.04/149.76 resistance zone. On the downside, break of 132.04 support is needed to be the first sign of medium term reversal. Otherwise, outlook will stay bullish in case of pull back.

DAX Short Term Elliott Wave view suggests that the Index ended Intermediate wave (X) pullback at 12731.46. The rally from there is unfolding as a 5 waves impulse Elliott Wave structure where Minutte wave (i) ended at 12943, Minutte wave (ii) ended at 12881.5, Minutte wave (iii) ended at 13408.5, and Minutte wave (iv) is proposed complete at 13328.5. Index has scope to extend 1 more leg higher in Minutte wave (v) before ending 5 waves up from 1/2 low (12731.46).

The move higher in Minutte wave (v) should also end Minute wave ((a)) of a larger degree. Afterwards, Index should pullback in Minute wave ((b)) to correct cycle from 1/2 low before the rally resumes. Chasing the Index higher from here is risky, but we don’t like selling the Index either. We expect buyers to appear during Minute wave ((b)) pullback in 3, 7, or 11 swing for an extension higher as far as pivot at 1/2 low (12731.46) stays intact.

DAX 1 Hour Elliott Wave Chart

Daily Pivots: (S1) 1.1670; (P) 1.1708; (R1) 1.1733; More...

Intraday bias in EUR/CHF remains neutral at this point. We're holding on to the view that it's close to topping, if not formed. And even in case of another rise, strong resistance should be seen well below 1.2 handle to bring medium term reversal. On the downside, below 1.1670 minor support will turn bias to the downside for 1.1602 support first. Further break of 1.1602 will indicate reversal and turn outlook bearish for 1.1387 and below.

In the bigger picture, while a medium term top could be around the corner, there is no change in the larger outlook. That is, long term rise from SNB spike low back in 2015 is still in progress and would extend. As long as 1.1198 resistance turned support holds, we'll hold on to this bullish view and expect another to prior SNB imposed floor at 1.2000. Though, we'll reassess the outlook if 1.1198 is firmly taken out.

Headlines/Economic Data

General Trend: Asian equities are generally higher as US indices ended mostly positive

Nikkei and USD/JPY pare gains amid BoJ reduction of purchases of longer dated JGBs in daily operation

Analysts ponder if BoJ move at daily operation has broader implications for monetary policy

Japan Nov inflation adjusted real wages see first rise in 11-months (*Note: Wages are seen as key to BoJ policy to help maintain the ‘virtuous’ cycle. On

Jan 5th, Japan PM Abe reiterated his call for companies to raise wages by 3% to put the economy on a ‘virtuous’ cycle)

Japan Finance Min Aso said equities are rising at fast pace on global economic recovery

Samsung Electronics declines as Q4 guidance below consensus

In talks, North Korea and South Korea said to reach agreement on Winter Olympics, but other areas less clear

Japan

Nikkei 225 opened +1% (closed during prior session): close +0.6%

TOPIX Real Estate Index +2.2%, Securities +0.8%

Sony +2.6% (released 2017 holiday sales for PS4)

Fast Retailing +1.4% (Dec SSS +18.1% y/y)

USD/JPY down over 0.4%, BOJ bond buying adjustment triggering the yen and hitting stops

(JP) JAPAN NOV LABOR CASH EARNINGS Y/Y: 0.9% V 0.6%E; REAL CASH EARNINGS Y/Y: +0.1% V -0.1%E (1st rise in 11-months)

(JP) Japan Fin Min Aso: Equities are rising at a fast pace

(JP) BOJ announcement related to daily bond buying operation: reduces planned daily purchases of 10-25 year and over 25-year JGBs each by ¥10B

(JP) Analysts look at tonight's announcement by the BOJ reducing bond buying and how it could be the first indication that tightening is on the way, despite its commitment to ultra easy monetary policy

6758.JP Reports 2017 holiday period PS4 sales of 5.9M units v 6.2M units in 2016

Korea

Kospi opened -0.1%

Samsung -2.8%: Reported prelim Q4 below expectations, 005930.KR Reports prelim Q4 (KRW) Op profit 15.1T v 15.9Te; Rev 66.0T v 66.8Te; opened slightly lower

Steelmakers track gains seen in the US: Hyundai Steel +1.7%, Posco +1.7%

LG Innotek: +10.5%: Apple said to be funding LG Innotek's 3D camera factory - Korean press

LG Electronics +2.3% (reported prelim Q4 results; declined over 5% on prior session)

Samsung C&T +3.5% (announced management changes)

(KR) South Korea trade officials see 4% growth in exports in 2018 - Korean press

(KR) North and South Korea hold first talks since 2015: North Korea expressed will to jointly enter winter Olympics

China/Hong Kong

Hang Seng opened +0.1%, Shanghai Composite -0.1%

Hang Seng Info Tech Index +0.9%, Services Index +1.1% (strength in gaming names)

Hang Seng Materials Index -1.8%: Aluminum Corp of China -4.5% (broker commentary)

(CN) China Ministry of Industry: To allow 1 tonne of new steel capacity to be built for each 1.25 tonnes closed in key regions – press

(CN) Commerzbank economist Zhou Hao: Possibility very low for China lending rate hike

(CN) China said to have stopped approving some kinds of consumer loan ABS, including micro loans - press

USD/CNY (CN) Yuan is likely to keep strengthening, China may accelerate yuan exchange rate reform - China Securities Journal

USD/CNY China's stable FX reserves will support yuan value in 2018 - Chinese press

(CN) China PBoC: Skips OMO for 12th straight session; Net drains CNY130B v CNY40B prior; Current bank liquidity is moderate (prior banking liquidity at relatively high level)

(CN) China PBoC sets yuan reference rate at 6.4968 v 6.4832 prior

(CN) China Dec Retail Auto Sales y/y: 0.6% v 3.2% prior; 2017 24.2M units, 1.5% y/y (record sales for 27th consecutive year) - PCA

Looking Ahead: China Dec CPI and PPI due for release on Wednesday

Australia/New Zealand

ASX 200 opens +0.1%; closed %

ASX 200 Resources Index +0.7%, Financials +0.2%; Consumer Discretionary -0.5%

(AU) AUSTRALIA NOV BUILDING APPROVALS M/M: 11.7% V -1.3%E; Y/Y: 17.1% V 4.6%E

(AU) Australia Dec ANZ Job Advertisements M/M: -2.3% v 1.1% prior

Looking Ahead: Australia Dec NAB Business Confidence due for release on Wednesday

Other Asia

(ID) Indonesia Fin Min Indrawati: 2017 GDP growth to fall short of target; ready to use all instruments to maintain growth momentum

(TW) Taiwan 2018 machinery exports seen up over 10% - Taiwanese Press

North America

US equity markets ended mostly higher: Dow -0.1%, S&P500 +0.2%, Nasdaq +0.3%, Russell 2000 +0.1%

S&P500 Sectors: Utilities +0.9%, Real Estate +0.7%; Health Care -0.4%, Financials -0.1%

(US) Fed's Bostic (2018 voter, dove): Fed may not need 3 or 4 rate hikes a year; policy is approaching a more neutral stance that could be close to 2%; Personal base case is for 2 or 3 rate hikes this year; Wants to see inflation higher to justify 3-4 rate hikes

(US) Fed's Williams (moderate, 2018 voter): central banks have less room to cut rates in the next crisis

(US) Fed's Rosengren (moderate, non-voter): Optimal rate of inflation may move around just as the natural rate of unemployment does

(US) White House reportedly near to a decision on Fed vice chair nomination - press

(US) Special Counsel Mueller reportedly likely to interview Pres Trump as part of Russia investigation in next few weeks - Wash Post

Looking Ahead: US Weekly API Crude Oil Inventories due for release

Europe

(UK) Brexit Min Davis: sees EU's no-deal Brexit planning as 'damaging' to the process - FT

(UK) DEC BRC SALES LFL Y/Y: 0.6% V 0.3%E

(IE) Ireland Dec Consumer Confidence Index: 103.2 v 103.6 prior

Looking Ahead: Germany Nov Trade Balance and Industrial production due to be released

Levels as of 01:00ET

Nikkei225 %, Hang Seng +0.3%; Shanghai Composite +0.0%; ASX200 +0.1%, Kospi -0.3%

Equity Futures: S&P500 +0.2%; Nasdaq100 +0.2%, Dax +0.2%; FTSE100 +0.1%

EUR 1.1975-1.1958; JPY 113.18-112.50; AUD 0.7865-0.7839;NZD 0.7197-0.7167

Feb Gold -0.0% at $1,320/oz; Feb Crude Oil +0.8% at $62.22/brl; Mar Copper +0.0% at $3.23/lb

Daily Pivots: (S1) 0.7821; (P) 0.7846; (R1) 0.7866; More...

Intraday bias in AUD/USD remains neutral for the moment. Considering bearish divergence condition in 4 hour MACD, even in case of another rise, upside should be limited by 0.7896 cluster resistance (61.8% retracement of 0.8124 to 0.7500 at 0.7886) resistance zone to bring short term topping. Break of 0.7804 minor support will turn bias to the downside for 55 day EMA (now at 0.7711).

In the bigger picture, we're still slightly favoring the case that corrective rise from 0.6826 medium term bottom is completed at 0.8124, after hitting 55 month EMA (now at 0.8032). But stronger than expected rebound from 0.7500 is dampening this bearish view. On the downside, break of 0.7500 will target 0.7328 key cluster support (61.8% retracement 0.6826 to 0.8124 at 0.7322) to confirm this bearish case. But break of 0.8124 will extend the rise from 0.6826 to 38.2% retracement of 1.1079 (2011 high) to 0.6826 (2016 low) at 0.8451 before completion.

Daily Pivots: (S1) 1.2381; (P) 1.2415; (R1) 1.2453; More....

With 1.2480 minor resistance intact, intraday bias in USD/CAD remains on the downside. Current momentum argues that larger down trend from 1.4689 might be resuming. Deeper fall should be seen back to retest 1.2061 low first. On the upside, above 1.2480 minor resistance will turn bias neutral and bring consolidation before staging another decline.

In the bigger picture, current development argues that rebound from 1.2061 has completed at 1.2919, rejected by 55 week EMA (now at 1.2850) and kept below 38.2% retracement of 1.4689 to 1.2061 at 1.3065. The development also suggests that long term fall from 1.4689 is not completed yet. Decisive break of 1.2061 low will target 61.8% retracement of 0.9406 to 1.4689 at 1.1424. This will now be the favored case as long as 1.2929 resistance holds.

Daily Pivots: (S1) 1.1931; (P) 1.1991 (R1) 1.2028; More....

Intraday bias in EUR/USD remains mildly on the downside for the moment. The pair could have been rejected by 1.2091 key near term resistance. And, fall from 1.2088 might be the third leg of consolidation pattern from 1.2091. Further decline should be seen to 38.2% retracement of 1.1553 to 1.2088 at 1.1884. Break of 1.1884 will target 61.8% retracement at 1.1757 and below. On the upside, firm break of 1.2091 is needed to confirm up trend resumption. Otherwise, we'd expect more corrective trading in near term.

In the bigger picture, rise from 1.0339 medium term bottom is still seen as a corrective move for the moment. Therefore, in case of another rally, we'd be expect 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516 to limit upside and bring reversal. That is also close to 61.8% projection of 1.0569 to 1.2091 from 1.1553 at 1.2494.