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Daily Pivots: (S1) 1.1740; (P) 1.1799 (R1) 1.1835; More...

Intraday bias in EUR/USD remains neutral first. On the upside, break of 1.1879 will affirm the case that pull back from 1.2091 has already completed at 1.1669. In such case, intraday bias will be turned back to the upside for retesting 1.2091 high. On the downside, break of 1.1669 will resume the fall from 1.2091 to 38.2% retracement of 1.0569 to 1.2091 at 1.1510. We'd expect strong support from there to complete the correction.

In the bigger picture, rise from medium term bottom at 1.0339 is not finished yet. It's expected to continue after pull back from 1.2091 completes. And, next target will be 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. However, it should be noted that there is no confirmation of trend reversal yet. That is, such rebound from 1.0399 could be a correction. And the long term fall from 1.6039 (2008 high) could resume. Hence, we'd be cautious on strong resistance from 1.2516 to limit upside.

Daily Pivots: (S1) 1.3113; (P) 1.3157; (R1) 1.3226; More....

Intraday bias in GBP/USD remains neutral at this point. On the downside, break of 1.3026 will resume the decline from 1.3651 and target 1.2773 key support level. This will also revive the case of medium term reversal. Meanwhile, on the upside, break of 1.3337 will resume the rebound from 1.3026 to 61.8% retracement of 1.3651 to 1.3026 at 1.3412 and above.

In the bigger picture, while the medium term rebound from 1.1946 was strong, GBP/USD hit strong resistance from the long term falling trend line. Outlook is turned a bit mixed and we'll stay neutral first. On the downside, decisive break of 1.2773 key support will argue that rebound from 1.1946 has completed. The corrective structure of rise from 1.1946 to 1.3651 will in turn suggest that long term down trend is now completed. Break of 1.1946 low should then be seen. On the upside, break of 1.3835 support turned resistance will revive the case of trend reversal and target 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466.

Daily Pivots: (S1) 0.9773; (P) 0.9813; (R1) 0.9875; More....

Intraday bias in USD/CHF stays on the upside as rise from 0.9420 is in progress. As noted before, medium term fall from 1.0342 should have completed at 0.9420 already. Further rally would be seen back to 61.8% retracement of 1.0342 to 0.9420 at 0.9990. Sustained break there will pave the way to retest 1.0342 high. However, break of 0.9736 support will mixed up the near term outlook and turn bias back to the downside for 0.9587 support instead.

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 develop into a medium term move and 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 0.9587 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) 112.81; (P) 113.18; (R1) 113.88; More...

USD/JPY's rebound from 107.31 continues today and intraday bias remains on the upside for 114.49 resistance. As noted before, correction pattern from 118.65 could have completed at 107.31 already. Decisive of 114.49 resistance should confirm this bullish case and target 118.65 resistance and above. For now, this will be the preferred case as long as 111.64 support holds.

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 completed. 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) 0.7787; (P) 0.7835; (R1) 0.7861; More...

Intraday bias in AUD/USD remains neutral at this point. On the downside, break of 0.7732 will resume the decline from 0.8124 and target medium term fibonacci level at 0.7628 first. This will also affirm the case of medium term reversal. On the upside, however, break of 0.7896 will extend the rebound to 61.8% retracement of 0.8124 to 0.7732 at 0.7974 and possibly above.

In the bigger picture, rise from 0.6826 medium term bottom is seen as corrective pattern. Current development suggests that it might be completed with three waves up to 0.8124 already. Break of 38.2% retracement of 0.6826 to 0.8124 at 0.7628 will firm this bearish case. And, decisive break of 0.7328 key cluster support (61.8% retracement at 0.7322) will confirm and bring retest of 0.6826 low. In case rise from 0.6826 resumes and extends, strong resistance should be seen at 38.2% retracement of 1.1079 to 0.6826 at 0.8451 to limit upside.

Daily Pivots: (S1) 1.2519; (P) 1.2575; (R1) 1.2679; More....

Intraday bias in USD/CAD remains on the upside for the moment. Rebound from 1.2061 has just resumed and should target 1.2777 resistance first. Decisive break there will confirm medium term reversal and target 38.2% retracement of 1.4689 to 1.2061 at 1.3065 next. On the downside, break of 1.2432 support is needed to indicate completion of the rebound. Otherwise, outlook will remain mildly bullish in case of retreat.

In the bigger picture, USD/CAD should have defended 50% retracement of 0.9406 (2011 low) to 1.4869 (2016 high) at 1.2048. And with 1.2048 intact, we'd favor the case that fall from 1.4689 is a correction. Break of 1.2777 will further affirm this bullish case. That is, larger up trend from 0.9406 is not completed. And in that case, USD/CAD should target 1.3793 key resistance next. However, on the other hand, firm break of 1.2048 will indicate that fall from 1.4689 is at least a medium term down trend and should target 61.8% retracement at 1.1424 and below.

Currency pair EUR/USD

The EUR/USD bounced at the support trend line (blue) of the larger triangle chart pattern. A break above resistance would confirm a bullish breakout within wave C of wave X (pink). A break below the support trend line (blue) will probably indicate a larger correction within wave 4 (light purple).

The EUR/USD could be building a wave 1-2 (green) if price stays above the 100% Fibonacci level of wave 2 vs 1.

Currency pair GBP/USD

The GBP/USD has broken above the resistance trend line (dotted yellow) which could start a larger bullish movement within a potential wave C (orange).

The GBP/USD bearish price action was corrective and choppy and resembles a wave B pattern.

Currency pair USD/JPY

The USD/JPY broke again above a resistance trend line (dotted lines) and has changed the wave outlook to bullish as price moves towards the round 115 resistance level.

The USD/JPY is probably retracing within a wave 4 (green).

Daily Pivots: (S1) 0.8893; (P) 0.8958; (R1) 0.8992; More...

Intraday bias in EUR/GBP remains neutral at this point. Price actions from 0.8745 are viewed as a corrective pattern. As long as 61.8% retracement of 0.9305 to 0.8745 at 0.9091 holds, deeper fall is in favor. Below 0.8857 minor support will turn bias to the downside. Further break of 0.8745 will resume whole decline form 0.9305 and target 0.8303 key support level. Nonetheless, sustained break of 0.9091 will bring retest of 0.9305 instead.

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.

Daily Pivots: (S1) 1.5030; (P) 1.5058; (R1) 1.5092; More....

Intraday bias in EUR/AUD remains neutral as range trading continues. With 1.5101 minor resistance intact, deeper decline is in favor. Fall from 1.5241 is seen as the third leg of the consolidation pattern from 1.5226. Break of 1.4945 will target 1.4791 support and possibly further to 1.4421. On the upside, though above 1.5101 will turn focus back to 1.5241 resistance instead.

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. The corrective structure of the price actions from 1.5226 is affirming this view. Sustained trading above 1.5226 will target a test on 1.6587 key resistance. However, break of 1.4421 support will dampen our view and would drag EUR/AUD lower to retest key support zone around 1.3624.

Asia Summary

Asian equity markets have opened generally higher. The Nikkei 225 opened up by over 1.1%, as Japan PM Abe's ruling coalition won a supermajority in the lower house, following Sunday's elections. Overall, the LDP/Komeito coalition won at least 312 seats, up from 290 prior.

Automakers, Honda and Nissan have rebounded from the declines seen on Friday's session. At the same time, the ‘mega-banks' in Japan are also all trading higher by over 0.7% following the election results.

China Life has risen by over 3%, after reporting an over 90% increase in its 9-month profits, which it said was mostly driven by higher investment returns.

Financials in South Korea are trading lower amid the declines being seen in 3-year bond yields. Following last week's Bank of Korea (BOK) meeting , where there was a hawkish dissenter, a ruling party official said the odds of a rate hike are ‘rising'. Bank of Korea Gov Lee also told parliament that the direction for future policy is ‘rate increase', but that the central bank did not have to respond ‘immediately' after a US Fed rate hike. Besides this, South Korea's government is said to be planning to hold a meeting to discuss household debt.

Japanese tech firms are trading generally higher. Softbank has gained over 1%. Shares of Canon Inc are also trading higher ahead of its later today earnings report. Taiwan Semi has gained over 0.7%. The company is said to have received an exclusive chip order from Apple, according to a press report. Mediatek has also gained amid press speculation related to a chip order from Alibaba.

South Korean chip makers are trading generally higher. Samsung Electronics may name a new CEO by as early as this week, according to a South Korean press report. Hynix has gained over 2%, ahead of its earnings which are due to be released on Thursday. Other Korean companies due to also report on Thursday include LG Electronics, Posco and Hyundai Motor.

Utilities and power plant services firms in South Korea, including KEPCO Engineering & Construction, are trading lower following the release of an opinion poll showing majority support for a nuclear-phase out policy.

In Singapore, Noble Group has declined by over 2% after saying it expects to report a loss in Q3. The company additionally disclosed the sale of its Americas oil liquids business to Vitol for $582M in net proceeds.

Australian telecom, Telstra, has gained over 1.5%, following a favorable ruling by Australia's competitor regulator, the ACCC.

Hong Kong listed China Mobile has declined by over 0.3%, despite reporting y/y growth in 9-month profits and revenues. Amid this drop, the overall Hang Seng Index has pared the gains seen at the open. Sportswear retailer Li Ning has declined by over 2%, following a report that its Q2 orders declined y/y. Hong Kong-listed aluminum producer Rusal, has traded lower by over 0.5%, after issuing its Q3 production update. Railway stocks in Hong Kong are declining, as shares of Zhuzhou CRRC Times Electric are lower by over 6%, as its Q3 results missed market expectations.

USD/JPY has risen by over 0.4% following Japan's election results, as some speculated on whether there would be any implications for stimulus efforts in Japan and BoJ Gov Kuroda, whose first term is scheduled to end April 2018. The Aussie is currently little changed ahead of Wednesday's release of Australia's Q3 CPI data.

Foreign exchange traders are also expected to pay close attention to the ECB's policy decision, which is due to be released on Thursday, Oct 26th.

In fixed income, China is expected to hold investor meetings in Hong Kong on Oct 25th, regarding its first planned US dollar denominated bond issuance since 2004.

In the US, there is press speculation that Cisco is near an agreement to acquire Broadsoft Inc, while in the lumber space Potlatch is said to be close to acquiring Deltic Timber in an all-stock deal. US companies due to report earnings later today include Halliburton, Hasbro, Illinois Tool Works, Kimberly-Clark, Rambus, Seagate Technology, State Street, T-Mobile US, VF Corp and Whirlpool.

Key economic data

(KR) South Korea Sept PPI M/M: 0.5% v 0.3% prior; Y/Y: 3.3% v 3.2% prior

(CN) CHINA SEPT PROPERTY PRICES M/M: RISE IN 44 OUT OF 70 CITES VS 46 PRIOR; Y/Y RISE IN 67 OUT OF 70 CITIES VS 68 PRIOR

Speakers and Press

Japan

(JP) Japan PM Abe's ruling LDP/Komeito coalition wins supermajority in elections with 312 seats* or ~67.1%(vs. 290 prior)

(JP) Bank of Japan (BOJ) Oct Loan Officer Opinion Survey: Company Loan Demand Index 6 v 3 prior; Govt Loan Demand -2 v 4 prior; Household Loan Demand 8 v 2 prior

(JP) Japan Chief Cabinet Sec Suga: Want to speed up Abenomics, with the economy as top priority

Korea

(KR) South Korea Ruling Party Official: Bank of Korea (BOK) rate hike odds 'rising'; to meet with government to discuss household debt

(KR) Bank of Korea (BOK) will continue efforts to stabilize markets as volatility can rise on North Korea risks and Fed's monetary policy normalization

(KR) Bank of Korea (BOK) Gov Lee: Can consider rate hike when economic recovery is 'solid' and inflation reaches target; Direction for future policy is rate increase; Need time to judge if recovery continues for rate hike - Parliamentary Comments

China/Hong Kong

(CN) China Minister of Housing and Urban-Rural Development Wang Menghui: property market is expected to continue stabilizing into Q4 – Xinhua

(CN) China 69 SOEs expected to finish restructuring by December - Chinese press

Europe

(ES) Spain PM Rajoy invokes Article 155 of the Constitution: plans to dissolve the Catalonia govt and curb its powers, and call elections within 6 months

Asian Equity Indices/Futures (00:00ET)

Nikkei +1.2%, Hang Seng -0.7%; Shanghai Composite +0.0%; ASX200 -0.0%, Kospi +0.0%

Equity Futures: S&P500 +0.0%; Nasdaq100 +0.0%, Dax +0.0%; FTSE100 +0.0%

FX ranges/Commodities/Fixed Income (00:00ET)

EUR 1.1778-1.1751; JPY 114.10-113.66; AUD 0.7825-0.7802;NZD 0.6968-0.6931

Dec Gold -0.2% at $1,277/oz; Dec Crude Oil +0.5% at $52.09/brl; Dec Copper -0.1% at $3.17/lb

(AU) Australia sells A$700M in 2027 bonds, avg yield 2.8162%; bid-to-cover 3.96x

USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT 6.6205 V 6.6092 PRIOR (weakest fixing since Oct 9th)

(CN) PBoC OMO: Injects CNY200B in 7 and 14-day reverse repos v CNY80B injected prior; injects net CNY140B

(KR) Bank of Korea (BOK) Sells KRW500B in 6-month monetary stabilization bonds, avg yield 1.59%

(KR) South Korea sells 20-year bonds, avg yield 2.385%

(AU) Australia buyback A$700M in March and Oct 2019 bonds

Equities notable movers

Australia/New Zealand

WPP.AU Guides FY17 Net profit below prior guidance of mid-single digits growth; -11%

VOC.AU Reports Q1 ARPU for NBN services A$62.60 v A$64.23 end of FY17; AMPU A$19.95 v A$20.26 end of FY17; To sell NZ unit, mulling sale of other assets; +1.8%

GRR.AU Reports Q1 Iron ore pellet sales (DMT) 359.1K v 184Kt q/q, +15.4%

China/Hong Kong

3898.HK Reports 9-month (CNY) Net profit 1.52B v 1.89B y/y, Rev 9.53B v 9.86B y/y; -6.6%

Singapore

NOBL.SG Guides Q3 adj Net loss S$100-50M (total net loss S$1.25-1.1B); Sells Noble Americas Corp to Vitol US for gross consideration of ~$1.42B; -4%