Sample Category Title

The euro has moved to a new weekly price-low against the U.S dollar, hitting 1.1775, as technical selling in the pair gathers pace. Broad-based U.S dollar strength is also weighing on the EURUSD on Thursday, with the dollar index breaking above strong resistance. Investors earlier looked past better than expected annual third quarter GDP growth from the eurozone, during a quiet European trading session. Euro traders now look to a market-moving speech from European Central President Mario Draghi later today, held in Frankfurt, Germany.

The EURUSD pair is turning technically bearish below the 1.1808 level, further downside selling towards the 1.1750 and 1.1713 levels remains possible.

Should EURUSD price-action move abo

The British pound continues to trade below the 1.3400 level against the U.S dollar, with the 1.3360 level still acting as strong support. Brexit headlines continue to dominate trading sentiment in the GBPUSD pair, ahead of the G-7 finance minister meeting. Price-action continues to trade in a narrow range between the 1.3360 to 1.3400 levels, as traders remain cautious on being overly long or short the pound. Investors now await the release of the Non-farm payrolls job report on Friday, with expectations shifting to the upside, after yesterday's solid ADP employment report.

The GBPUSD pair is still bearish while trading below the 1.3400 technical level, the 1.3360 level remains the foremost support, with 1.3303 extended weekly support.

Should buyers push price-action above the 1.3400 level, the GBPUSD pair should move back towards the 1.3450 and 1.3510 resistance levels.

The Japanese yen has posted losses in the Thursday session. In North American trade, USD/JPY is trading at 112.67, up 0.32% on the day. On the release front, unemployment claims dipped to 236 thousand, below the estimate of 239 thousand. In Japan, Final GDP in the third quarter is expected to slow to 0.4%. On Friday, the US publishes three key employment indicators – Average Hourly Earnings, Nonfarm Employment Change and the unemployment rate. As well, the US releases UoM Consumer Sentiment.

BoJ Governor Haruhiko Kuroda continues to drop subtle hints about easing monetary policy. On Thursday, Kuroda said that a change in economic conditions could lead the BoJ to raise its yield target, which would be a significant change to current policy. Kuroda noted that an exit from quantitative and qualitative easing would be "quite an important topic" to communicate to the markets. Although Kuroda has insisted that there will be no reduction of stimulus until the Bank's inflation target of 2% is met, there has been pressure on him to reconsider, given the marked improvement in Japanese economy this year. Although the BoJ is unlikely to tighten policy before next year at the earliest, these deliberate hints indicated that the Bank is thinking ahead to a time when conditions will warrant tightening monetary policy, after years of an ultra-accommodative stance.

In the US, this week's job numbers have met expectations, as unemployment claims and ADP nonfarm payrolls both beat their estimates. However, the stiffer test is on Friday, with the release of nonfarm payrolls and wage growth. The ADP reading slowed considerably compared to the previous release, and the markets are predicting the same trend for nonfarm payrolls, which is expected to come in at 190 thousand. As one of the most important indicators, nonfarm payrolls could shake up the markets, so traders should be prepared for some movement from USD/JPY in Friday's North American session.

• European equities trade near opening levels in another uneventful trading session. US stock markets open little changed as investors await more guidance from the payrolls and/or US political developments.
• The leader of Germany's Social Democrats has called for EU member states to commit to a "United States of Europe" by 2025, setting out an ambitious European reform agenda as a condition for holding talks with Chancellor Merkel on the formation of a new government.
• German industrial production unexpectedly declined for a second month in October as workers took extra days off, interrupting a run that put Europe's largest economy on track toward its best performance in six years. Output declined 1.4% from September, when it fell a revised 0.9%.
• The number of Americans filing for unemployment benefits unexpectedly fell last week to 236k (vs 240k expected), suggesting a rapid tightening of the labor market that bolsters expectations the Federal Reserve will raise interest rates next week.
• President Trump will face off with Democratic leaders of Congress later today in a high-stakes White House meeting intended to bridge differences over a spending bill and prevent a government shutdown.
• A spokesman for Jean-Claude Juncker, EC president, said there was still "no white smoke" in the talks which have stumbled as Theresa May tries to find a suitable border arrangement to satisfy the Democratic Unionist party in Northern Ireland.

Rates

More range bound trading

Global core bonds traded in a narrow sideways range today. Second tier eco data (disappointing German industrial production, confirmation EMU Q3 GDP and strong jobless claims) didn't affect trading. US Treasuries slightly outperformed as political risk remains elevated (debt ceiling, tax reforms, Mueller investigation, Jerusalem). Risk sentiment on equity and commodity markets remains fragile, but the selloff didn't continue.

At the time of writing, the German yield curve bear steepens with yield changes ranging between -0.3 bps (2-yr) and +1.5 bps. The test of 0.3% support in the German 10-yr yield is ongoing. The specific curve movement could be related to comments from the German deputy FM who said that the Finanzagentur will continue to rely on 30y funding next year while even suggesting the possibility of a 50-yr bond. The US yield curve bull flattens with yields up to 2.5 bps lower (30-yr). On intra-EMU bond markets, 10-yr yield spread changes versus Germany are nearly unchanged with Portugal (-5 bps) and Italy (-3 bps) outperforming.

Currencies

Dollar maintains benefit of the doubt

There was no high profile news to guide trading in the major FX cross rates today. The risk-off correction slowed, but there was no sustained rebound. Data were second tier and close to expectations. Investors await tomorrow's US payrolls and a solution on the US government spending bill. Trading in the major cross rates was technical in nature, with the dollar gaining on points. Investors apparently don't want to be positioned USD short ahead of tomorrow's payrolls.

Asian equities showed a diffuse picture. Japan outperformed with gains of 1% +. China and Korea underperformed. The profit taking move of the previous sessions slowed, but there is no big story to start a clear directional move/rebound. USD/JPY held in the mid 112 area. The pair lost only limited ground in yesterday's risk-off correction. EUR/USD stabilized near 1.18. At 93.60, the trade-weighted dollar (DXY) holds near the highest level in 2 weeks.

There was absolutely no unequivocal story to guide trading in Europe. European equities tried to join this morning's rebound in (some) Asian markets, but the move lacked any conviction. Core yields also didn't go anywhere. EMU Q3 growth was revised marginally higher to 2.6% Y/Y (from 2.5%). Evidently this was not enough to inspire any directional move. In line with the 'price action' earlier this week, the dollar maintained the benefit of the doubt recording marginal gains against the euro and yen.

The 'USD-bid' slowed this afternoon. US jobless claims were slightly better than expected (236K vs 240K expected), but that wasn't enough to cause any USD repositioning ahead of tomorrow's US payrolls. Headlines from the parties involved in the reconciliation of the House and Senate tax bill suggested further progress but we assume that (FX) markets didn't give much weight to it yet. USD/JPY trades in the 112.65 area. EUR/USD is changing hands just below 1.18. Dollar gains remain minimal, but investors apparently don't want to be positioned short USD going into tomorrow's US payrolls.

Sterling awaiting 'new' Brexit news

There was also little hard news on Brexit today. Rumours continued to swirl. Ireland indicated that it wants to be helpful in case UK PM may comes up with a new proposition, but its basic position on the issue of the Irish border hasn't changed. At the same time, the EU suggested that it might be more flexible on the deadline for PM May to finalize a proposal that would be presented at the EU summit at the end of next week. For now, there are no indications that there is any progress on the heart of the matter. Sterling was captured in erratic order-driven trading as most investors are avoiding directional positions as long as the binary Brexit-risk persists. EUR/GBP hovered up and down around the 0.88 pivot (currently 0.8810). Cable spiked briefly to the 1.3320 area, but trades again near 1.3375.

USD/CHF - 0.9919

Most recent candlesticks pattern : N/A

Trend                                    : Near term up

Tenkan-Sen level                  : 0.9921

Kijun-Sen level                    : 0.9809

Ichimoku cloud top                 : 0.9875

Ichimoku cloud bottom              : 0.9863

Original strategy :

Buy at 0.9825, Target: 0.9925, Stop: 0.9790

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 0.9825, Target: 0.9925, Stop: 0.9790

Position : -

Target :  -

Stop : -

As the greenback has maintained a firm undertone after staging a strong rebound from 0.9735 (last Friday’s low), adding credence to our view that a temporary low has been formed there and consolidation with upside bias remains for this move to bring at least a strong retracement of recent decline to resistance at 0.9947 but reckon 0.9990-00 would hold from here due to near term overbought condition.

In view of this, we are looking to buy dollar on dips as 0.9820-25 should limit downside and bring another rebound. Below 0.9790 would defer and risk weakness to 0.9755-60 but still reckon said last week’s low at 0.9735 would remain intact.

GBP/USD - 1.3383

Most recent candlesticks pattern   : N/A

Trend                                 : Near term up

Tenkan-Sen level                 : 1.3372

Kijun-Sen level                    : 1.3372

Ichimoku cloud top              : 1.3449

Ichimoku cloud bottom        : 1.3404

Original strategy :

Sold at 1.3440, met target at 1.3340

Position : - Short at 1.3440

Target :  - 1.3340

Stop : -

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Cable did resume recent fall from 1.3550 and our short position entered at 1.3440 met indicated downside target at 1.3340 as the pair fell to as low as 1.3320 (with 100 points profit), having said that, as sterling found good support at 1.3320 and has rebounded in NY morning, initial upside risk is seen for recovery to 1.3430-35 but break of resistance at 1.3461 is needed to confirm low is formed, bring further gain towards 1.3500.

As we have taken profit on our short position entered at 1.3440, would not chase this fall here and would be prudent to stand aside in the meantime. Below said support at 1.3320 would signal the fall from 1.3550 is still in progress and may extend further weakness to 1.3300 but reckon 1.3260-65 would hold, bring rebound later. 

Daily Pivots: (S1) 0.7537; (P) 0.7584; (R1) 0.7609; More...

AUD/USD drops to as low as 0.7514 so far today. Break of 0.7531 confirms resumption of whole decline from 0.8124. Intraday bias remains on the downside for next key cluster level at 0.7322/8. For now, near term outlook will stays bearish as long as 0.7652 resistance holds, in case of recovery.

In the bigger picture, corrective rise from 0.6826 medium term bottom is likely completed at 0.8124, after hitting 55 month EMA (now at 0.8033). Decisive break of 0.7328 key cluster support (61.8% retracement 0.6826 to 0.8124 at 0.7322) will confirm. And in that case, long term down trend from 1.1079 (2011 high) will likely be resuming. Break of 0.6826 will target 61.8% projection of 1.1079 to 0.6826 from 0.8124 at 0.5496. This will now be the favored case as long as 0.7732 near term resistance holds.

EUR/USD - 1.1793

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 1.1791

Kijun-Sen level                  : 1.1800

Ichimoku cloud top             : 1.1839

Ichimoku cloud bottom      : 1.1831

Original strategy  :

Sell at 1.1865, Target: 1.1765, Stop: 1.1900

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.1865, Target: 1.1765, Stop: 1.1900

Position : -

Target :  -

Stop : -

As the single currency has remained under pressure after recent selloff, adding credence to our bearish view that the erratic decline from 1.1961 top (last week’s high) is still in progress and downside bias remains for further weakness to to 1.1770 and possibly towards support at 1.1736 but near term oversold condition should limit downside and price should stay above previous key support at 1.1713.

In view of this, we are looking to sell euro on recovery as 1.1870-75 should limit upside and bring another decline. Above 1.1900 would risk test of last Friday’s high at 1.1940 but only break there would revive bullishness, bring retest of 1.1961 later.

Daily Pivots: (S1) 1.1768; (P) 1.1807 (R1) 1.1835; More....

No change in EUR/USD's outlook as corrective fall from 1.1960 is still extending. After all, with 1.1712 support intact, further rise remains in favor. On the upside, break of 1.1960 will resume the rise from 1.1553 and target 1.2091 high first. Break there will resume medium term up trend from 1.0339 and target 61.8% projection of 1.0569 to 1.2091 from 1.1553 at 1.2494, which is close to 1.2516 long term fibonacci level. We'd expect strong resistance from there to bring reversal. On the downside, break of 1.1712 will indicate completion of the rise from 1.1553 and turn near term outlook bearish.

In the bigger picture, rise from 1.0339 medium term bottom is 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. Meanwhile, sustained trading below 55 week EMA (now at 1.1393) will suggest that such medium term rebound is completed and could then bring retest of 1.0339 low.

USD/JPY - 112.58

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 112.66

Kijun-Sen level                  : 112.42

Ichimoku cloud top             : 112.54

Ichimoku cloud bottom      : 112.28

Original strategy  :

Bought at 112.10, Target: 113.30, Stop: 111.95

Position :  - Long at 112.10

Target :  - 113.30

Stop : - 111.95

New strategy  :

Hold long entered at 112.10, Target: 113.30, Stop: 111.95

Position :  - Long at 112.10

Target :  - 113.30

Stop : - 111.95

As the greenback found renewed buying interest just below 112.00 and has staged a rebound, suggesting the pullback from 113.09 has possibly ended at 111.99, retaining our bullishness and gain to 112.85-90 is likely, break there would confirm this view and bring retest of 113.09, above there would extend recent upmove to resistance at 113.33 and later towards 113.60-70.

In view of this, we are holding on to our long position entered at 112.10. Below 111.99 support would defer and risk weakness to 111.60 but only break of said support at 111.37-41 would abort and signal top is formed instead.