Sample Category Title

GBP/USD - 1.3247

Most recent candlesticks pattern   : N/A

Trend                                 : Near term up

Tenkan-Sen level                 : 1.3241

Kijun-Sen level                    : 1.3228

Ichimoku cloud top              : 1.3215

Ichimoku cloud bottom        : 1.3197

Original strategy :

Bought at 1.3180, met target at 1.3280

Position : - Long at 1.3180

Target :  - 1.3280

Stop : -

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Despite intra-day anticipated rally to 1.3280 (our long position entered at 1.3180 met target at 1.3280), as cable’s broad outlook remains consolidative, reckon upside would be limited to 1.3300 and price should falter below indicated previous resistance area at 1.3321-38, bring another retreat later today or tomorrow.

As we have taken profit on our long position entered at 1.3180, would not chase this rise here and would be prudent to stand aside in the meantime. Below 1.3210-15 would bring weakness to 1.3180-85 but only break of support at 1.3170 would abort and risk correction to 1.3150, then test of said support at 1.3134, once this level is penetrated, this would signal top has been formed.

Daily Pivots: (S1) 1.1760; (P) 1.1791 (R1) 1.1817; More....

EUR/USD rebounds strongly after drawing support from 4 hour 55 EMA. Intraday bias remains neutral at this point. Also, with 1.1677 minor support intact, further rally is expected. As noted before, corrective fall from 1.2091 has completed at 1.1553 already, ahead of 38.2% retracement of 1.0569 to 1.2091 at 1.1510. Above 1.1860 will turn bias to the upside for retesting 1.2091 high. However, break of 1.1677 will dampen this bullish view and turn focus back to 1.1553 low instead.

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 cautious on 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 1.1373) will suggest that such medium term rebound is completed and could then bring retest of 1.0339 low.

Euro tumbled earlier today in knee-jerk reaction to news that German Chancellor failed to form coalition government. But the common currency quickly recovered as markets perceive that the economy won't be hurt by the current political uncertainty. DAX dipped to as low as 1926.13 but is now back above 13000 handle at the time of writing, up 0.25%. Elsewhere, trading is very quiet today. Sterling is lifted by news that UK is ready to give an improved offer on the divorce bill to EU. Dollar trades mildly firmer today except versus Sterling and Kiwi. Swiss Franc is indeed trading as the weakest one, indicating followed by Canadian Dollar and then Yen. So far, markets are not in risk aversion mode.

German President Steinmeier urged parties to reconsider

German President Frank-Walter Steinmeier met with Chancellor Angela Merkel today after the latter declared failure in forming coalition. Steinmeier issued a statement following the meeting and said he will meet the parties this week. He also urged the parties to reconsider their positions in forming the new government. Steinmeier added that "there would be incomprehension and great concern inside and outside our country, and particularly in our European neighborhood, if the political forces in the biggest and economically strongest country in Europe of all places didn't fulfill their responsibility."

The coalition talk collapsed at over time after pro-business Free Democrats pulled out of talk with Merkel's CDU and Greens. Social Democrats reiterated their stance on not joining the new government to reform the grand coalition". For now, Steinmeier and Merkel had decided not to call a new election immediately and opt for putting more efforts in negotiating with the parties.

Chancellor Hammond: UK ready to offer Brexit bill before Dec summit

Chancellor of Exchequer Philip Hammond indicated that UK could be ready to break the negotiation "logjam" with EU and make a divorce bill offer before December summit. Hammond said on BBC that UK is "on the brink of making some serious movement forward". And, "we will make our proposals to the European Union in time for the council. I am sure about that." Meanwhile he also insisted that "It's not about demands, it's about what is properly due from the U.K. to the European Union under international law in accordance with European treaties." He added that "we've always been clear it won't be easy to work out that number. But whatever is due, we will pay."

IMF: RBA monetary policy "appropriately accommodative"

IMF said that RBA's monetary policy is "appropriately accommodative". The fund published a report after visiting Australia. It noted that "with stronger momentum in domestic demand and inflation close to the mid-point of the target range not yet secured, continued macroeconomic policy support will remain essential." Also, "with Australia's recovery lagging that of other major advanced economies, monetary policy should remain firmly focused on ensuring stronger sustained momentum in domestic demand and inflation." Regarding the economy, IMF believed the government's infrastructure spending would have positive spillovers. It added that "further increases in investment have the potential to improve physical and digital interconnectivity, both internally and with Australia's trading partners, thereby contributing to higher growth."

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1760; (P) 1.1791 (R1) 1.1817; More....

EUR/USD rebounds strongly after drawing support from 4 hour 55 EMA. Intraday bias remains neutral at this point. Also, with 1.1677 minor support intact, further rally is expected. As noted before, corrective fall from 1.2091 has completed at 1.1553 already, ahead of 38.2% retracement of 1.0569 to 1.2091 at 1.1510. Above 1.1860 will turn bias to the upside for retesting 1.2091 high. However, break of 1.1677 will dampen this bullish view and turn focus back to 1.1553 low instead.

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 cautious on 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 1.1373) will suggest that such medium term rebound is completed and could then bring retest of 1.0339 low.

Economic Indicators Update

EUR/USD - 1.1772

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.1771

Kijun-Sen level                  : 1.1766

Ichimoku cloud top             : 1.1809

Ichimoku cloud bottom      : 1.1793

Original strategy  :

Buy at 1.1700, Target: 1.1800, Stop: 1.1665

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.1700, Target: 1.1800, Stop: 1.1665

Position : -

Target :  -

Stop : -

Although the single currency has rebounded after finding support at 1.1722, break of resistance at 1.1822 is needed to signal the pullback fro 1.1861 (last week’s high) has ended, bring retest of said resistance, break there would extend recent rise to 1.1900 but near term overbought condition should limit upside to 1.1920-25 and price should falter below 1.1950-60, bring retreat later. If said resistance at 1.1822 continues to hold, then further consolidation would take place and another fall to 1.1722 cannot be ruled out but 1.1700-10 (50% Fibonacci retracement of 1.1554-1.1861) should limit downside and 1.1671-78 (61.8% Fibonacci retracement and previous resistance) would hold, bring another rise later.

In view of this, we are looking to buy euro on next decline. Only below 1.1671-78 would defer and signal top has been formed instead, bring a stronger retracement of recent rise to 1.1650, then test of previous support at 1.1637 which is likely to hold from here. 

USD/JPY - 112.27

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 112.12

Kijun-Sen level                  : 112.23

Ichimoku cloud top             : 112.86

Ichimoku cloud bottom      : 112.68

Original strategy  :

Sell at 112.60, Target: 111.60, Stop: 111.60

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 112.60, Target: 111.60, Stop: 111.60

Position :  -

Target :  -

Stop : -

As the greenback has remained under pressure after last week’s selloff from 113.91, suggesting recent decline from 114.74 top is still in progress, hence bearishness is seen for further weakness to previous support at 111.65, break there would extend fall to 111.45-50, however, near term oversold condition should limit downside and reckon 111.00-05 would hold from here, bring rebound later.

In view of this, would not chase this fall here and would be prudent to sell dollar on recovery as 112.60-65 should limit upside. bring another decline later. Above 112.85-90 would risk test of previous support at 113.09 but only break there would abort and signal low is formed instead, bring a stronger rebound to 113.33 resistance first.

EUR/GBP - 0.8891

Original strategy  :

Sell at 0.8975, Target: 0.8850, Stop: 0.9015

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 0.8950, Target: 0.8820, Stop: 0.8990

Position : -

Target :  -

Stop : -

 
The single currency has fallen again after meeting renewed selling interest at 0.8954, adding credence to our view that top has possibly been formed at 0.9015 last week, bearishness remains for the fall from there to extend extend weakness to 0.8850, however, break of support at 0.8812 is needed to signal the rebound from 0.8733 has ended at 0.9015, bring subsequent fall towards 0.8791 support which is likely to hold from here.

In view of this, we are looking to sell euro on recovery as 0.8950 should limit upside and bring another decline. Only above said resistance at 0.9015 would risk test of previous resistance at 0.9033 but only a breach of this level would signal an upside break of recent established broad range has occurred, then subsequent rise to 0.9070-75 would follow.

Our preferred count is that, after forming a major top at 0.9805 (wave V), (A)-(B)-(C) correction is unfolding with (A) leg ended at 0.8400 (A: 0.8637, B: 0.9491 and 5-waver C ended at 0.8400. Wave (B) has ended at 0.9413 and impulsive wave (C) has either ended at 0.8067 or may extend one more fall to 0.8000 before prospect of another rally. Current breach of indicated resistance at 0.9043 confirms our view that the (C) leg has ended and bring stronger rebound towards 0.9150/54, then towards 0.9240/50.

EURAUD Short term Elliott Wave view suggests that the decline to 10/27 low 1.5052 ended intermediate (X). A rally from there is unfolding as an impulse Elliott Wave structure with extension and showing bullish sequence in the pair. This 5 waves move should end Minor wave A of an Elliott wave zigzag structure. In which case, after 5 waves move ends, the pair should pullback in 3 waves at least as the Elliott Wave Theory suggests. Up from 10/27 low 1.5052, Minute wave ((i)) ended at 1.5232, Minute wave ((ii)) ended at 1.5079 low. Minute wave ((iii)) ended at 1.5605. Minute wave ((iv)) ended at 1.5483 low and Minute wave ((v)) of A ended at today's peak 1.5656. Below from there, the pair is correcting the 10/27 cycle in Minor wave B pullback and expected to find the buyer's in a sequence of 3, 7 or 11 swings. We don't like selling the pair and favor buying the wave B dip provided the pivot at 10/27 low 1.5052 stays intact.

EURAUD 1 Hour Elliott Wave Chart

Zigzag is a 3 waves corrective pattern which is labeled as ABC. The subdivision of wave A is in 5 waves, either as impulse or diagonal. The subdivision of wave B can be any corrective structure. Finally, the subdivision of wave C is also in 5 waves, either as impulse or diagonal. Thus, zigzag has a 5-3-5 structure. Wave C typically ends at 100% – 123.6% of wave A.

The Canadian dollar has edged lower in the Monday session. Currently, USD/CAD is trading at 1.2788, up 0.15% on the day. On the release front, the sole indicator is US CB Leading Index, with an estimate of 0.6%. On Tuesday, Canada releases Wholesale Sales and the US publishes Existing Home Sales. As well, US Federal Reserve Chair Janet Yellen will speak at an event in New York City.

Like its southern neighbor, Canada continues to grapple with low inflation levels. There were no surprises on Friday, as CPI posted a negligible gain of 0.1% for October, matching the estimate. The Bank of Canada remains cautiously optimistic about inflation – on Wednesday, Senior Deputy Governor Carolyn Wilkins said she expected wages to rise as the economy improved. Inflation levels remain well below the Bank's inflation target of 2.0%, and the markets don't expect another rate hike until 2018.

US housing numbers ended the week on a positive note, easily beating expectations. Building Permits for single-family homes jumped to 1.30 million, above the estimate of 1.25 million. The annualized pace of 839,000 building permits in October was the fastest since September 2007. Housing Start also sparkled, accelerating to 1.29 million, compared to an estimate of 1.19 million. The catalyst for the strong numbers were hurricanes Harvey and Irma, which caused massive damage in the southern part of the US. With rebuilding efforts well underway, construction numbers should remain strong in the fourth quarter.

GBPUSD: The pair may have hesitated the past week, but remains slightly biased to upside. Support lies at the 1.3200 level where a break will turn attention to the 1.3150 level. Further down, support lies at the 1.3100 level. Below here will set the stage for more weakness towards the 1.3050 level. Conversely, resistance stands at the 1.3300 levels with a turn above here allowing more strength to build up towards the 1.3350 level. Further out, resistance resides at the 1.3400 level followed by the 1.3450 level. Its daily RSI is bullish and pointing higher suggesting further upside pressure. On the whole, GBPUSD continues to face upside pressure but with caution.

The euro has rebounded strongly against the U.S dollar, hitting 1.1807 during the European trading session. After dipping to 1.1722, EURUSD bargain hunters bought the pair the aggressively, despite the ongoing political uncertainty in Germany. The euro currently trades around the 1.1780 region, pulling back from the daily price high, ahead of the U.S trading session. The macro-economic calendar remains fairly light in the U.S, traders will look to 1.1800 handle for guidance on the euros directional bias.

The EURUSD pair is now intraday bullish while trading above the key 1.1755 level. Further upside towards the 1.1807 and 1.1860 remains possible while euro buyers retain control.

Any loss of the 1.1755 zone will likely lead to a further weakening of the EURUSD pair back towards the 1.1710 technical level.