Sample Category Title

USD/JPY - 113.91

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 113.81

Kijun-Sen level                  : 113.47

Ichimoku cloud top             : 113.72

Ichimoku cloud bottom      : 113.25

Original strategy  :

Sell at 114.10, Target: 113.00, Stop: 114.45

Position :  -

Target :  -

Stop : -

New strategy  :

Stand aside

Position :  -

Target :  -

Stop : -

As the greenback has continued moving higher after staging a strong rebound from 112.96 in part due to active cross-selling in yen, suggesting near term upside risk remains for gain to 114.20-25, however, still reckon strong resistance at 114.45-50 would cap upside and bring retreat later. Below the Kijun-Sen (now at 113.47) would suggest the rebound from 112.96 has possibly ended and bring weakness to 113.20, then towards said support at 112.96 which is likely to hold from here.

In view of this, would not chase this rise here and stand aside for now. Only break of indicated strong resistance at 114.45-50 would revive bullishness and signal early upmove has resumed for headway to 114.75-80 and later towards 115.00 but near term overbought condition should limit upside.

On Tuesday, the Bank of Japan made no changes to its huge monetary stimulus plan even as it reduced its inflation forecasts. The BoJ board voted, 8-1, to maintain the central bank’s yield curve control program and asset purchases. The board kept its view that its 2% inflation target is likely to be met at the start of the fiscal year that begins in April 2019. Governor Kuroda continued to stress the importance of maintaining monetary easing as the world major Central Banks are moving towards monetary normalization. However, this is whilst the Japanese economy is seeing its longest expansion since 2001, with equities at their highest level in 20 years and a labor market that is the tightest for several decades.

Data released by Eurostat on Tuesday showed economic growth beat forecasts in Q3. Preliminary GDP climbed 0.6% in Q3 from Q2. That is down slightly from the upwardly-revised 0.7% quarter-on-quarter growth in Q2, but ahead of a forecasted estimate of 0.5%. In addition, the Eurozone Unemployment Rate dropped to 8.9%. Unemployment below 9% has not been seen for nearly 8 years. Year-on-year GDP rose to 2.5% in the Q3, up from a 2.3% annual increase in Q2, again beating expectations of a 2.4% rise.

The markets are focusing on today’s US Federal Reserve’s two-day policy meeting for indications on future monetary tightening. The Fed has raised rates twice since January and currently forecasts one more hike by the end of the year as part of a tightening cycle that began in late 2015. The Fed is expected to leave interest rates unchanged but the markets will be looking for any new indications that the Fed will, as expected, hike rates in December.

EURUSD is slightly lower in early Wednesday trading at around 1.1634.

USDJPY is 0.2% higher in early session trading at 113.85.

GBPUSD is currently unchanged, trading around 1.3275.

Gold is 0.3% higher overnight, currently trading around $1,274.

WTI is 0.15% higher in early trade at around $54.81.

Major data releases for today:

At 09:30 GMT, the UK Chartered Institute of Purchasing & Supply and Markit Economics will release Markit Manufacturing PMI for October. Forecasts are calling for a lower reading of 55.8, from the previous 55.9.

At 13:45 GMT, Markit Economics will release US Markit Manufacturing PMI for October. The forecast is for the release to be unchanged at 54.5.

At 14:00 GMT, the Institute for Supply Management (ISM) will release US ISM Prices Paid and ISM Manufacturing PMI for October. Prices Paid is forecast to come in lower at 68 from the previous release of 71.5, with PMI also forecast lower at 59.5 from the previous 60.8.

At 14:30 GMT, the US Energy Information Administration (EIA) will release EIA Crude Oil Stocks change for the week ending October 27th. The forecast is calling for a drawdown of -2.575M compared to the previous small increase in stocks of 0.856M. The markets will be looking for any significant deviation from the forecast as this will cause volatility in Oil.

At 18:00 GMT, the US Federal Open Market Committee (FOMC) will release its statement on Monetary Policy. The statement may influence the volatility of USD and determine a short-term positive or negative trend.

At 18:00 GMT, the US Federal Reserve will announce its Interest Rate Decision. The markets are not expecting any change in US interest rates until December with the Fed holding interest rates at 1.25%. Naturally, any unexpected rate hike will cause volatility in USD.

Daily Pivots: (S1) 149.72; (P) 150.39; (R1) 151.60; More

GBP/JPY recovers after drawing support from 4 hour 55 EMA. Intraday bias is turned neutral first. Above 151.38 will target 152.82 high. Decisive break there will confirm medium term rally resumption. On the downside, below 148.88 support will extend the consolidation from 152.82 with another fall. But downside should be contained by 61.8% retracement of 139.29 to 152.82 at 144.45 and bring rebound.

In the bigger picture, medium term rebound from 122.36 is still expected to resume after corrective pull back from 152.82 completes. Firm break of 38.2% retracement of 196.85 to 122.36 at 150.43 will carry long term bullish implications. In that case, GBP/JPY could target 61.8% retracement at 167.78. However, break of 139.29 will indicate rejection from 150.43 key fibonacci level. And the three wave corrective structure of rebound from 122.36 will argue that larger down trend is resuming for a new low below 122.26.

Daily Pivots: (S1) 131.70; (P) 132.13; (R1) 132.76; More....

EUR/JPY recovers after breaching 131.65 key support briefing. Intraday bias remains neutral first. on the downside, decisive break of 131.65 will confirm rejection from 134.20 fibonacci level. That will also complete and double top pattern (134.39, 134.48) and confirms near term reversal. 55 day EMA will also be firmly taken out. In that case, deeper decline should be seen back to 127.55 key support. On the upside, decisive break of 134.39/48 resistance zone is needed to confirm up trend resumption. Otherwise, even in case of rebound, near term outlook is neutral at best.

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). 61.8% retracement of 149.76 to 109.03 at 134.20 is already met. Sustained break there will pave the way to key long term resistance zone at 141.04/149.76. However, break of 127.55 support will argue that the medium term trend has reversed and will turn outlook bearish for deeper fall back to 114.84/124.08 support zone at least.

The U.S dollar has rebounded sharply higher against the Japanese Yen, hitting 113.93 during the Asian trading session. The USDJPY pair currently trades close to highs of the day, as rising Japanese stocks and better than expected company earnings boost risk-on sentiment in financial markets. Traders now await the release of the U.S ADP jobs report and the ISM manufacturing PMI for the month of October.

The USDJPY pair is strongly bullish on an intraday basis while trading above the 113.90 technical level. Further upside towards 114.24 and 114.50 remain likely while above this key level.

A failure below the 113.90 level, will likely lead to an immediate decline towards the 113.70 and 113.57 support levels for the USDJPY pair.

The British pound has risen sharply higher against the U.S dollar, hitting 1.3293, during today's Asian trading session. The GBPUSD pair is currently consolidating around the 1.3270 level, as broad-based strength in the British pound is being underpinned by a probable rate hike from the Bank of England tomorrow. GBPUSD traders now await the upcoming release of the United Kingdom's Manufacturing PMI, for the month of October.

The GBPUSD pair is strongly bullish on an intraday basis while trading above the 1.3267 technical. Further buying above this level should be expected towards 1.3307 and 1.3360.

Should the GBPUSD pair decline below the 1.3267 technical level for a sustained period, sellers will likely push price-action back towards the 1.3222 and 1.3200 levels.

One of the month's most highly anticipated events will take place on Wednesday, as the Federal Reserve unveils its latest policy decision. Although no change in policy is expected, the official statement may reveal clues about the likelihood of a December rate hike. For the vast majority of traders, a December liftoff is a foregone conclusion, according to the CME Group's 30-day Fed Fund Futures prices.

PMI data courtesy of IHS Markit will make headlines beginning at 09:00 GMT with reports on Greek and UK manufacturing sectors. Very little changes are expected on either front.

In terms of monetary policy, the Bank of England's Sir Jon Cunliffe is scheduled to deliver a speech at 10:00 GMT, one day after the central bank is expected to raise interest rates.

The North American session begins with ADP's monthly employment report, which covers US private sector job creation. Private-sector employment is forecast to grow by 200,000 for October, following a gain of 135,000 the previous month.

Markit and the Institute for Supply Management (ISM) will also report on US manufacturing PMI between 13:45 GMT and 14:00 GMT.

Reports on construction spending and crude stockpiles will also influence investor sentiment on Wednesday.

Earlier in the day, Markit reported the final Nikkei Japanese manufacturing PMI for October. The reading of 52.8 was higher than forecasts.

Meanwhile, the Caixin China manufacturing PMI was unchanged at 51.

The Fed will conclude its policy meeting Wednesday afternoon, with an official rate statement scheduled for 18:00 GMT.

USD/JPY

The USDJPY returned to strength on Tuesday, as markets favoured the greenback ahead of this week's FOMC decision. The USD/JPY is currently trading around 113.85, having gained 0.2% from the previous close. The pair is in a firm uptrend extending back three weeks, but faces a major hurdle around the psychological 114.00 handle. Prices surged above that handle last week before retracing all the way back down to the low 113.00s. The 31 October low of 112.96 provides immediate support.

EUR/USD

Europe's common currency was little changed on Tuesday, as investors continued to evaluate the fallout from Catalonia's independence movement. The EUR/USD exchange rate continues to trade in the low-to-mid 1.16 region. Prices were last down 0.1% at 1.1630. Immediate resistance is located at 1.1660. On the opposite side of the spectrum, the pair is likely to find support at 1.1590.

USD/CAD

The Bank of Canada's dovish posturing last week has driven a nail into the loonie. The USD/CAD extended its uptrend on Tuesday, hitting 1.2900 for the second time in three sessions. The USD/CAD is currently trading near three-month highs, with the pair eyeing further gains in the wake of the Fed announcement later in the day.

Daily Pivots: (S1) 0.8747; (P) 0.8785; (R1) 0.8804; More...

Intraday bias in EUR/GBP remains mildly on the downside for 0.8745 support. Break will resume whole fall from 0.9305 and target 0.8303 key support level. On the upside, above 0.8878 minor resistance will extend the corrective pattern from 0.8745 with another rise. But upside should be limited by 61.8% retracement of 0.9305 to 0.8745 at 0.9091 to bring fall resumption eventually.

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 another 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.

Key Highlights

• The New Zealand Dollar made a downside move from the 0.7200 swing high against the US Dollar.
• There is a major bearish trend line forming with resistance at 0.6900-0.6920 on the 4-hours chart of NZD/USD.
• New Zealand's Employment Change in Q3 2017 was 2.2%, compared with the forecast of 0.8%.
• Today in the US, the Fed Interest rate decision is scheduled and the central bank is likely to keep rates at 1.25%.

NZDUSD Technical Analysis

The New Zealand Dollar started a crucial downtrend from the 0.7200 swing high against the US Dollar. The NZD/USD pair is currently well below 0.6920 and looks set to extend declines.

During the recent slide, the pair broke the 0.7060 and 0.6900 support levels and traded as low as 0.6818. The pair is currently attempting a recovery, but facing sellers near the 38.2% Fib retracement level of the last decline from the 0.7003 high to 0.6818 low.

Moreover, there is a major bearish trend line forming with resistance at 0.6900-0.6920 on the 4-hours chart. Any major corrections from the current levels are likely to face hurdles near 0.6900 and 0.6920 in the near term.

On the downside, a break of the 0.6818 low would ignite further losses below 0.6800.

New Zealand Employment Change and Unemployment

Earlier today, the New Zealand Employment Change figure for Q3 2017 was released by the Statistics New Zealand. The forecast was lined up for a change of 0.8% in Q3 2017 compared with the last -0.2%.

The actual result was better than the forecast, as the New Zealand Employment Change in Q3 2017 was 2.2%. Looking at the Unemployment Rate, the market was looking for a decline from 4.8% to 4.7% in Q3 2017. However, the actual was again better, as there was a decline to 4.6%.

The report added that:

In the September 2017 quarter, the seasonally adjusted unemployment rate fell to 4.6 percent (down 0.2 percentage points from the June quarter), the lowest unemployment rate since the December 2008 quarter.

Overall, the NZD/USD pair might correct towards 0.6920, but most likely to face sellers on the upside.

Economic Releases to Watch Today

UK's Manufacturing PMI for Oct 2017 – Forecast 55.8, versus 55.9 previous.

US Manufacturing PMI for Oct 2017 – Forecast 54.5, versus 54.5 previous.

US ADP Employment Change Oct 2017 – Forecast 200K, versus 135K previous.

US ISM Manufacturing Index for Oct 2017 – Forecast 59.5, versus 60.8 previous.

Fed Interest Rate Decision – Forecast 1.25%, versus 1.25% previous.

Daily Pivots: (S1) 1.5148; (P) 1.5190; (R1) 1.5252; More....

EUR/AUD is staying in consolidation below 1.5392 and intraday bias remains neutral at this point. Again, as long as 1.4949 support holds, outlook remains bullish. Medium term rally from 1.3624 is in favor to continue. On the upside, break of 1.5392 will resume medium term rise from 1.3624 and target 61.8% projection of 1.3624 to 1.5226 from 1.4949 at 1.5939 first. However, decisive break of 1.4949 will carry larger bearish implication and turn bias to the downside.

In the bigger picture, we're holding on to the view that corrective decline from 1.6587 medium term top has completed at 1.3624. Rise from 1.3624 is expected to extend to retest 1.6587. However, break of 1.4949 support will dampen our view and argue that rise from 1.3624 has completed. In that case, EUR/AUD would turn southward for retesting 1.3624 low.