Sample Category Title

EUR/USD - 1.1578

Most recent candlesticks pattern   : N/A

Trend                      : Down

Tenkan-Sen level              : 1.1582

Kijun-Sen level                  : 1.1585

Ichimoku cloud top             : 1.1637

Ichimoku cloud bottom      : 1.1619

Original strategy  :

Sold at 1.1620, Target: 1.1520, Stop: 1.1655

Position : - Short at 1.1620

Target :  - 1.1520

Stop : - 1.1655

New strategy  :

Hold short entered at 1.1620, Target: 1.1520, Stop: 1.1620

Position : - Short at 1.1620

Target :  - 1.1520

Stop : - 1.1620

As the single currency recovered after finding support at 1.1580, minor consolidation would be seen, however, reckon upside would be limited to the lower Kumo (now at 1.1619) and bring another decline later to 1.1574-80, break there would extend recent decline to  1.1520-25, then 1.1500 but near term oversold condition should prevent sharp fall below latter level. 

In view of this, we are holding on to our short position entered at 1.1620. Above 1.1620-25 would defer and risk test of the upper Kumo (now at 1.1637) would risk another bounce towards 1.1691, however, only break there would abort and suggest further choppy trading above 1.1574 would be seen, bring a stronger rebound to 1.1700-05 but upside should be limited to previous support at 1.1725 (now resistance). 

USD/JPY - 114.09

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 114.15

Kijun-Sen level                  : 114.02

Ichimoku cloud top             : 114.19

Ichimoku cloud bottom      : 114.14

Original strategy  :

Bought at 113.85, Target: 114.85, Stop: 113.65

Position :  - Long at 113.85

Target :  - 114.85

Stop : - 113.65

New strategy  :

Hold long entered at 113.85, Target: 114.85, Stop: 113.65

Position :  - Long at 113.85

Target :  - 114.85

Stop : - 113.65

Although the greenback retreated after rising to 114.74 yesterday, as dollar found support at 113.69 and has rebounded, retaining our bullishness and consolidation with upside bias remains for gain to 114.40-45, however, break of said resistance at 114.74 is needed to confirm recent upmove from 107.32 low has resumed and extend gain to 115.00 but overbought condition should limit upside to another previous resistance at 115.51.

In view of this, we are holding on to our long position entered at 113.85. Only below support at 113.54 would abort and prolong consolidation, risk weakness to 113.20-25, however, reckon support at 112.96 would remain intact, bring another rise later.

The pair bounced on Tuesday after four-day descend from 1.2916 found solid support at 1.2700.

Fresh strength of the US dollar sidelines immediate downside risk, seen on break below pivotal supports at 1.2670 (20SMA/daily Kijun-sen).

Recovery rally eyes key points at 1.2782 (Fibo 38.2% of 1.2916/1.2700) and 1.2808 (daily Tenkan-sen/10SMA) close above which is required to signal an end of corrective phase and shift near-term focus higher.

Overall bullish structure of daily techs and slow stochastic reversing from oversold territory, support the notion.

Res: 1.2782; 1.2808; 1.2833; 1.2875
Sup: 1.2751; 1.2738; 1.2700; 1.2670

USD/CAD - 1.2777

Trend:  Near term up

 
Original strategy       :

Exit long entered at 1.2755

Position: - Long at 1.2755

Target:  -

Stop: -

 
New strategy             :

Stand aside

Position: -

Target:  -

Stop:-

Although the greenback fell briefly to 1.2701 yesterday, as the pair found good support there and has staged a strong rebound, suggesting a temporary low has possibly been formed there and consolidation with mild upside bias is seen for gain towards resistance at 1.2836 resistance but break there is needed to signal the correction from 1.2917 has ended, bring further gain to 1.2880 and later retest of 1.2917. Looking ahead, as we are still treating this rebound from 1.2061 as wave iv, reckon 1.2975-80 (61.8% Fibonacci retracement of wave iii) would limit upside and 1.3000 should hold, bring selloff later in wave v. We are keeping our count that wave v as well as wave (C) ended at 1.3794 and impulsive wave (i ii, i ii) is now unfolding with minor wave iii ended at 1.2414, followed by wave iv correction ended at 1.2778, wave v has reached our indicated downside target at 1.2100 and may extend to 1.2000.

On the downside, expect pullback to be limited to 1.2725-30 and said support at 1.2701 should hold, bring another rebound later. Below said support at 1.2701 would signal the fall from 1.2917 top is still in progress for a least a retracement of recent rise to 1.2670, then test of support at 1.2636 but a drop below this level is needed to signal recent rise has ended at 1.2917, bring further fall to 1.2600 and later towards 1.2550-60.

To recap, wave B from 1.3066 is unfolding as an a-b-c and is sub-divided as a: 1.2192, b: 1.2716 and wave c is a 5-waver with i: 1.1983, ii: 1.2506, extended wave iii with minor iii at 1.0206, wave iv ended at 1.0781 and wave v as well as wave iii has ended at 0.9931, hence the subsequent choppy trading is the wave iv which is unfolding as (a)-(b)-(c) with (a) leg of iv ended at 1.0854, followed by (b) leg at 1.0108 and (c) leg as well as the wave iv ended at 1.0674. The wave v is sub-divided by minor wave (i): 0.9980, (ii): 1.0374, (iii): 0.9446, (iv): 0.9913 and (v) as well as v has possibly ended at 0.9407, therefore, consolidation with upside bias is seen for major correction, indicated target at 1.3700 and 1.4000 had been met and further gain to 1.4700 would be seen later.

Daily Pivots: (S1) 113.35; (P) 114.04; (R1) 114.39; More...

Intraday bias in USD/JPY remains neutral for the moment. As long as 112.95 support holds, near term outlook remains bullish and further rally is in favor. Sustained trading above 114.49 will pave the way to retest 118.65 high. However, break of 112.95 support will now indicate rejection from 114.49 and turn bias to the downside for 111.64 support and below.

In the bigger picture, medium term rise from 98.97 (2016 low) is not completed yet. It should resume after corrective fall from 118.65 completes. Break of 114.49 resistance will likely resume the rise to 61.8% projection of 98.97 to 118.65 from 107.31 at 119.47 first. Firm break there will pave the way to 100% projection at 126.99. This will be the key level to decide whether long term up trend is resuming.

Daily Pivots: (S1) 0.9954; (P) 0.9991; (R1) 1.001; More....

Intraday bias in USD/CHF remains neutral as consolidation from 1.0037 is still in progress. Deeper retreat could be seen. But downside should be contained above 0.9835 resistance turned support and bring rally resumption. On the upside break of 1.0037 will resume whole rally from 0.9420. And with sustained trading above 61.8% retracement of 1.0342 to 0.9420 at 0.9990, USD/CHF should then target a test on 1.0342 key resistance.

In the bigger picture, current development suggests that USD/CHF has defended 0.9443 (2016 low) key support level again. Rise from 0.9420 could is a medium term up move and should target a test on 1.0342 high. This represents the upper end of a long term range that started back in 2015. On the downside, break of 0.9736 support is now needed to indicate completion of the rise from 0.9420. Otherwise, further rally will remain in favor in medium term.

Daily Pivots: (S1) 1.3095; (P) 1.3135; (R1) 1.3211; More....

Consolidation from 1.3026 is possibly extending with another rise. But upside of recovery should be limited below 1.3337 resistance to bring fall resumption. Break of 1.3038 will now resume decline from 1.3651 to 1.2773 key support level. However, decisive break of 1.3337 will indicate that pull back from 1.3651 is completed and medium term rise from 1.1946 is resuming.

In the bigger picture, as noted before, GBP/USD hit strong resistance from the long term falling trend line. Current development is starting to favor that corrective rebound from 1.1946 low has completed at 1.3651. Decisive break of 1.2773 will confirm this bearish case and target a test on 1.1946 low next, with prospect of resuming the low term down trend. Nonetheless, break of 1.3320 resistance will restore the rise from 1.1946 for 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466.

Daily Pivots: (S1) 1.1585; (P) 1.1604 (R1) 1.1629; More...

EUR/USD's break of 1.1574 indicates that recent decline from 1.2091 has resumed. Intraday bias is back on the downside for 38.2% retracement of 1.0569 to 1.2091 at 1.1510. We'd be cautious on strong support from there to bring rebound. But sustained break of 1.1510 will pave the way to next support zone at 1.1118/1267. On the upside, break of 1.1689 resistance is needed to confirm short term bottoming. Otherwise, outlook will remain bearish in case of recovery.

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

Dollar trades broadly higher today as sentiments are supported by hope on tax cuts in US. In particular, EUR/USD breaks 1.1574 support to resume recent decline from 1.2091 high. Nonetheless, commodity currencies are trading as the weakest ones. In particular, Aussie is under some pressure after the non-eventful RBA rate decision. Economic calendar is lightly today and the main focuses for the rest of the day will be on speeches by BoC Governor Stephen Poloz and Fed Chair Janet Yellen.

ECB Lautenschlaeger wants to see clear stimulus exit

ECB Executive Board Member Sabine Lautenschlaeger said there is a "strong growth momentum" in the Eurozone. And the region has grown for "17 consecutive quarters" while "the labor market has a solid recovery, sentiment factors are positive, the financial conditions for firms and households are very favorable." And she is "very confident that inflation rate will pick up". Therefore, ECB's decision to half monthly asset purchase to EUR 30b starting January was "correct". And she added that "I would have liked to see a clear exit".

Separately, ECB President Mario Draghi urged a join efforts by "banks, supervisors, regulators and national authorities" to address non-performing loans. He called that the "most important issue" at a conference. ECB's plan to adopt tougher measures on non-performing loans by Eurozone financial institutions was endorsed by Eurogroup head Jeroen Dijsselbloem. However, it's criticized by European Banking Federation Chief Executive Wim Mijs as having "ill-defined scope". And, Mijs said " the stricter requirements put European banks with exposure in (the) non-euro zone area at a competitive disadvantage vis-a-vis local banks." 

Released from Eurozone, retail sales rose 0.7% mom in September, retail PMI dropped to 51.1 in October. German industrial production dropped -1.6% mom in September. Separately, Swiss Foreign currency reserves rose to CHF 742b in October, up from CHF 724b. That's also the highest level on record.

UK Halifax: BoE hike wont' be barrier to house purchase

In UK, Halifax house price rose 4.5% yoy in the August-October quarter, accelerated from 4.0% in the quarter to September. That was in line with market expectation. Halifax noted that "increasing pressure on household finances and continuing affordability concerns are some of the factors likely to dampen buyer demand". However, the increase in BoE's Based Rate will not result in "a barrier to buying a house".

Also from UK, BRC retail sales monitor dropped -10% yoy in October.

China foreign exchange reserves rose for 9 straight months

In China, foreign exchange reserves rose USD 7.03b to USD 3.1092T. That followed a again of USD 16.98b back in September. The rise in reserves in September was below market expectation of USD 9.5b. Nonetheless, that's the ninth consecutive month of growth, first since June 2014. Meanwhile, value of gold reserves dropped to USD 75.248b, down from September's USD 76.005b.

RBA stands pat, likely to stay on hold ahead

As widely anticipated, RBA left the cash rate unchanged at 1.5% today. As we await Friday' Statement of Monetary Policy, policymakers revealed at the statement that the macroeconomic guidance has stayed largely unchanged. In short, policymakers remained upbeat about the growth outlook, although they expressed concerns over household spending and soft inflation.

Despite recent weakness in the Australian dollar, RBA reiterated the warning that higher exchange rate would lead to slower growth and inflation. Given the overall unchanged tone of the central bank, we retain the view that RBA would keep the policy rate unchanged at least until 1H18.

More in RBA Maintained Status Quo, Upbeat On Growth And Employment, Concerned Over Household Spending And Inflation.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1585; (P) 1.1604 (R1) 1.1629; More...

EUR/USD's break of 1.1574 indicates that recent decline from 1.2091 has resumed. Intraday bias is back on the downside for 38.2% retracement of 1.0569 to 1.2091 at 1.1510. We'd be cautious on strong support from there to bring rebound. But sustained break of 1.1510 will pave the way to next support zone at 1.1118/1267. On the upside, break of 1.1689 resistance is needed to confirm short term bottoming. Otherwise, outlook will remain bearish in case of recovery.

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

Economic Indicators Update

The Canadian dollar has posted losses in the Tuesday session, erasing the gains from Monday. Currently, USD/CAD is trading at 1.2763, up 0.43% on the day. On the release front, there are no Canadian indicators on the schedule. Bank of Canada Governor Stephen Poloz will speak at event in Montreal. In the US, today's highlight JOLTS Job Openings, which is expected to soften to 5.98 million. As well, Fed Chair Janet Yellen will deliver remarks at an event in Washington.

Will Donald Trump succeed in overhauling the tax code for the first time in 30 years? Trump suffered a humiliating defeat with his failed health care proposal, and the President has now set his sights on tax reform. Trump wants Congress to pass legislation overhauling the tax code before the end of the year, but that will be a tall order, as most Democrats have come out against the proposal, and not all Republicans are on board. The bill would cut corporate taxes from 35% to 20%, but predictably, Democrat and Republican lawmakers are at odds as to whether the bill will lower taxes for the middle class. Expectations that Trump will cut taxes has been the catalyst for a stock market rally over the past year, and if the bill does become law, the US dollar will likely gain ground.

The Bank of Canada has said that it has no plans to raise interest rates, but it may have to reconsider if Canadian employment numbers continue to impress. In October, the economy produced 35.3 thousand jobs, well above the estimate of 15.3 thousand. This marked the highest gain since June. South of the border, job numbers were a disappointment. After a decline in September, a result of the hurricanes which battered the US, nonfarm payrolls rebounded sharply with a reading of 261 thousand. This was a respectable number, but still fell short of the forecast of 312 thousand. Wage growth also disappointed, slowing to 0.0%, short of the estimate of 0.2%. This marked the first time in 2017 that wage growth did not increase, underlining persistent weak inflation. Although Fed Chair Yellen and other Fed policymakers have expressed confidence that inflation levels will rise, this is still yet to occur, despite strong growth and a labor market at capacity.