Sample Category Title

The Australian dollar fell in Asia, turning near-term focus lower after multiple upside rejections at 200 SMA (0.7697) last week).

Key support at 0.7632 (Fibo 61.8% of larger 0.7328/0.8124 ascend) which was repeatedly dented but without clear break) came under pressure again.

Bears need sustained break and close below the later to signal continuation and expose targets at 0.7572/71 (07/05 July higher lows) then 0.7535 (22 June trough) and 0.7516 (Fibo 76.4%). Broken descending 10SMA (0.7668) offers resistance which is expected to ideally cap and guard key 200SMA barrier.

Res: 0.7668, 0.7697, 0.7719, 0.7730
Sup: 0.7632, 0.7625, 0.7571, 0.7535

The GBP/JPY rally and profit taking on short trades that happened on Friday has been negated by an early Monday drop and sell off. Brexit concerns are still weighting on the pound and investors tend to flee in the JPY safe haven. The GBP/JPY, popular "Dragon" dropped below the trend line and a subsequent retest of the POC zone might spur another sell off. 149.10-149.40 is the POC zone (D L4/L4, EMA89, 61.8 fib, trend line X cross). Rejection targets 148.55 and a strong h1 breakout or 4h below the 148.40 might target 148.00 and 147.83.

W L3 - Weekly Camarilla Pivot (Weekly Interim Support)

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 - Daily Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Daily Camarilla Pivot (Daily Support)

D L4 – Daily H4 Camarilla (Very Strong Daily Support)

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

The pair remains in directionless mode for the second day as Friday's trading ended in Doji candle and action in early Monday holding in a narrow range.

Price action is capped under 10SMA (113.78) which marks the upper pivot and supported by rising 30SMA at 113.19 (lower trigger), with break of either side needed for initial direction signal.

Underlying bulls remain in play for fresh attempts through 114.00 while 30SMA and 112.95 support (31 Oct trough) contain.

Otherwise, increased risk of deeper pullback could be expected on break and close below 112.95.

Res: 113.78, 114.06, 114.45, 114.73
Sup: 113.33, 113.19, 112.95, 112.50

The Euro eases on Monday after three-day rally last week which peaked at 1.1677 and was capped by broken neckline of daily H&S pattern.

Pullback so far looks as corrective action as underlying near-term bias remains bullish.

Dip-buying is seen as favored scenario with broken daily Tenkan-sen (1.1622) expected to contain extended dips. Rising hourly cloud (spanned between 1.1633 and 1.1617) also underpins near-term action.

Friday’s close above 1.1661 (Fibo 38.2% of 1.1836/1.1553 downleg) and bullish weekly close were positive signals for extended recovery.

Fresh upside action requires sustained break above falling 20SMA (1.1684) to generate bullish signal for 1.1700+ recovery.

Conversely, break and close below Tenkan-sen (1.1622) will bearish signal and would shift near-term focus towards key support at 1.1653 (07 Nov low).

Res: 1.1664, 1.1677, 1.1684, 1.1716
Sup: 1.1637, 1.1622, 1.1585, 1.1553

Cable was sharply lower in early Monday's trading after negative news for PM May were released during the weekend and pound remains vulnerable as Brexit talks face key deadlines. The pair slipped below strong 1.3110 support (Fibo 61.8% of 1.2773/1.3655 upleg/100SMA) on extended bearish acceleration at the beginning of European session, shifting near-term bias lower after Friday's unsuccessful probe into daily cloud. Cloud is spanned between 1.3214 and 1.3275 and continues to weigh. Monday's weakness retraced 76.4% of recovery rally from 1.3038 (03 Nov low) to 1.3229 (Friday's peak), signaling an end of corrective phase. Dips were so far held by temporary base at 1.3083, with retest of key short-term supports at 1.3026 (06 Oct) and 1.3038, which also mark the floor of five-week range, seen as likely near-term scenario. Daily studies are turning into full bearish setup and support the notion, with loss of 1.3038/26 pivots, as well as psychological 1.3000 support, expected to spark further weakness. Extended upticks should be capped by descending 10/20 SMA's (1.3155/68 respectively) before bears resume. Only bullish acceleration through daily cloud would neutralize and shift near-term focus higher.

Res: 1.3109, 1.3155, 1.3168, 1.3188
Sup: 1.3083, 1.3057, 1.3038, 1.3026

EUR/USD

Current level - 1.1653

The intraday bias is still positive above 1.1620, but my outlook is counter-trend below 1.1690, for a violation of the crucial 1.1585, towards 1.1480.

USD/JPY

Current level - 113.42

The lack of an impulsive rebound above 113.00 area shows a neutral bias and only a violation of 114.05 crucial high will renew the positive outlook.

GBP/USD

Current level - 1.3121

The recent rise peaked precisely at 1.3220 resistance and the reversal at that zone signals a completion of the whole corrective rebound above 1.3030 low. My outlook is bearish, for a break through 1.3085 static support, towards 1.3020, en route to 1.2910.

Forex markets were relatively quiet on Monday as economic releases were limited. However, political challenges in the UK during the weekend, pressured the pound, while the dollar managed to gain ground as investors were widely expecting a third Fed rate hike despite continuing uncertainties around the US tax overhaul lingering in the background.

An article published in the Sunday Times over the weekend reported that forty parliament members from the Conservative Party agreed to sign a letter expressing their reluctance on Prime Minister Theresa May's leadership -eight more members would be needed for her position to be threatened by a leadership contest. May has been struggling to regain support from her Conservative counterparts since she lost her majority in a snap election in June, while her stance in Brexit negotiations was also criticized.

In other news, the Brexit minister David Davis dismissed the two-week deadline on settling the divorce bill issue set by the EU Brexit negotiator, arguing on Sunday that Britain will not put on the table any amount or formula on how much the country owns to the EU upon leaving the bloc.

The pound retreated by 0.70% to $1.3096 after rising for two consecutive days. Euro/pound jumped by 0.50% to a ten-day high of 0.8891 and pound/yen tumbled by 0.85% to 148.54.

The dollar index, which measures the dollar's strength against six major currencies, opened higher in Asia, trading around 94.54, 0.17% higher on the day, as investors continued pricing a third-rate hike in December. In addition, the Philadelphia Fed President, Patrick Harker, said on early Monday that he would back a rise in interest rates in December although inflation remains subdued. However, weaker inflation figures due out of the US on Wednesday could hamper monetary policy tightening and therefore pressure the dollar. Besides, that, further disappointments on the promised US tax reforms could also harm the dollar's outlook.

Meanwhile, the US President, who continues his 12-day trip across Asia, expressed his satisfaction on the progress of trade arrangements during his visit, notifying that the White House will release a statement on North Korea and trade issues on Wednesday.

Dollar/yen was mainly flat around 113.49. The dollar-dependent gold edged up to $1,276.28 per ounce after a deep fall on Friday towards $1,273.25.

Euro/dollar was 0.21% down amid political turmoil in the Eurozone and specifically in Spain, where the Prime Minister, Mariano Rajoy urged Catalans to pull back from independence, arguing that next month's regional elections will help Catalonia to recover from “the havoc of separatism”.

In other currencies, the aussie retreated by 0.22% to $0.7647 after another lawmaker resigned over his dual citizenship, reducing Prime Minister Malcolm Turnbull's majority even further, while the RBA Governor admitted that rates would rise only if wage growth and inflation will pick up.

The kiwi fell by 0.17% to $0.6917.

XAUUSD (1275.85): Gold prices fell towards the support level of 1274.69 on Friday. This validated the ascending triangle pattern which saw prices consolidating near the resistance level of 1285.00. The decline to the 1274.69 support level could see prices now attempting to bounce back higher. This is also seen with the hidden bullish divergence on the Stochastics which has posted a lower low compared to the higher low in price. In the near term we expect gold prices to maintain the range above 1274.69 and 1285.03. A breakout from either of these levels will, however, signal further continuation in price.

USDJPY (113.65): The USDJPY has been slowly consolidating after the decline towards 113.10 level. The brief bounce off this level suggests the sideways range that has been in play. However, we expect price action to complete the decline to the downside and thus testing the support level of 113.00 more firmly. To the upside, the declines are limited towards the resistance and support level of 113.75 region. A breakout above this level on an intraday basis could signal further upside in price that could see a potential test of resistance at 114.24.

EURUSD (1.1651): The EURUSD continued to push higher last week as price briefly tested the resistance level of 1.1674. Price action has since then been pushing lower. In the short term, EURUSD will maintain the sideways range within 1.1674 level of resistance and 1.1573 level of support. The rally to 1.1674 has invalidated the bearish flag pattern, and we expect the price to remain range bound. Further trend can be seen forming on a breakout above or below the mentioned resistance and support levels.