Sample Category Title

Daily Pivots: (S1) 1.3187; (P) 1.3211; (R1) 1.3247; More....

Intraday bias in GBP/USD remains neutral for consolidation above 1.3026 temporary low. At this point, deeper fall is mildly in favor as long as 1.3291 minor resistance holds. Below 1.3026 will target 1.2773 key support level. Decisive break there will affirm the bearish case of medium term reversal. Nonetheless, break of 1.3291 will suggest that the pull back from 1.3651 is completed and turn bias back to the upside.

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 turn 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 .

USD/CHF - 0.9720

Most recent candlesticks pattern : N/A

Trend                                    : Near term up

Tenkan-Sen level                  : 0.9725

Kijun-Sen level                    : 0.9739

Ichimoku cloud top                 : 0.9772

Ichimoku cloud bottom              : 0.9757

Original strategy :

Sell at 0.9760, Target: 0.9660, Stop: 0.9795

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 0.9755, Target: 0.9655, Stop: 0.9790

Position : -

Target :  -

Stop : -

As the greenback has fallen again after brief recovery, suggesting the fall from 0.9837 top is still in progress and bearishness remains for test of previous support at 0.9710, however, break there is needed to retain downside bias for further decline to 0.9669-70 (61.8% Fibonacci retracement of 0.9565-0.9837 and previous support) but previous support at 0.9642 should remain intact due to near term oversold condition.

In view of this, would not chase this fall here and we are looking to sell dollar on recovery as resistance at 0.9767 should limit upside and bring another decline later. Only break of resistance at 0.9808 would signal an intra-day low is formed and indicate the pullback from 0.9837 has ended, bring retest of this level later. 

Daily Pivots: (S1) 0.9709; (P) 0.9737; (R1) 0.9759; More....

Intraday bias in USD/CHF remains neutral for the moment. Considering bearish divergence condition in 4 hour MACD, break of 0.9704 resistance turned support will argue that rebound from 0.9420 has completed. This will also mixed up the near term outlook and turn bias back to the downside for 0.9587 support. Meanwhile, break of 0.9835 temporary top will extend the rebound to 61.8% retracement of 1.0342 to 0.9420 at 0.9990.

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) 112.18; (P) 112.38; (R1) 112.69; More...

Intraday bias in USD/JPY remains on the downside. The fall from 113.43 short term top would extend to 55 day EMA (now at 111.35) first. Sustained break there will bring retest of 107.31. For now, risk will stays on the downside as long as 113.43 resistance holds.

In the bigger picture, rise from 98.97 (2016 low) is seen as the second leg of the corrective pattern from 125.85 (2015 high). It's unclear whether this this second leg has completed at 118.65 or not. But medium term outlook will be mildly bearish as long as 114.49 resistance holds. And, there is prospect of breaking 98.97 ahead. Meanwhile, break of 114.49 will bring retest of 125.85 high. But even in that case, we don't expect a break there on first attempt.

GBP/USD - 1.3256

Most recent candlesticks pattern   : N/A

Trend                                 : Down

Tenkan-Sen level                 : 1.3244

Kijun-Sen level                    : 1.3220

Ichimoku cloud top              : 1.3198

Ichimoku cloud bottom        : 1.3151

New strategy  :

Sell at 1.3315, Target: 1.3215, Stop: 1.3350

Position : -

Target :  -

Stop : -

Although cable has surged again after finding renewed buying interest at 1.3175 yesterday and near term upside risk remains for the rise from 1.3027 low to bring retracement of recent decline, reckon upside would be limited to 1.3291-92 (61.8% Fibonacci retracement of 1.3455-1.3027 and previous resistance) and 1.3310-15 (50% Fibonacci retracement of intermediate fall from 1.3596-1.3027) should hold, bring retreat later. Below the Kijun-Sen (now at 1.3220) would bring weakness to 1.3195-00 but break of said support at 1.3175 is needed to signal top is formed.

In view of this, we are inclined to sell cable on further subsequent rise. Above 1.3340-50 would signal the rise from 1.3027 low is still in progress and may extend gain to 1.3375-80 (61.8% Fibonacci retracement of 1.3596-1.3027) but still reckon 1.3400 would hold from here due to overbought condition.

Daily Pivots: (S1) 0.7768; (P) 0.7789; (R1) 0.7807; More...

Intraday bias in AUD?USD remains neutral for consolidation above 0.7732 temporary low. Another fall is expected as long as 0.7874 resistance holds. As noted before, rise from 0.7382 is possibly completed at 0.8124 already. Below 0.7732 will target medium term fibonacci level at 0.7628 first. Decisive break there will target 0.7328 key cluster support. On the upside, break of 0.7874 will argue that the decline is completed and turn bias back to the upside.

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.

Currency pair GBP/USD

The GBP/USD bullish channel (blue/orange lines) is challenging the Fibonacci levels of wave 4 (orange). A break above the 61.8% Fib makes a wave 4 less likely and could indicate a larger bullish reversal. In that case, an ABC (green) correction has probably occurred. However, a failure to break the resistance zone but a break below the channel could spark a bearish continuation to test the outer trend line connecting the wave 3 (orange bottom).

The GBP/USD bearish break below the support trend line (blue) could indicate the completion of wave 4 (orange) and the continuation of the downtrend. A break above the resistance top and 61.8% Fib makes a wave 4 less likely. For the moment an ABC (green) zigzag correction could be taking place.

Currency pair EUR/USD

The EUR/USD bullish channel (blue lines) is now challenging a potential resistance trend line (orange). It is unclear whether price is in a wave 5 or in an expanded wave 4 at the moment, which depends on how price develops within the bullish channel.

The EUR/USD bullish momentum has reached the 161.8% Fibonacci target and could be in a wave 3 (blue). A shallow retracement could indicate a potential wave 4 and a continuation within the bullish channel.

Currency pair USD/JPY

The USD/JPY could be building a larger correction within wave 2 or B (purple).

The USD/JPY could have completed a potential ABC (purple) correction within wave X (purple).

Daily Pivots: (S1) 1.2431; (P) 1.2481; (R1) 1.2509; More....

USD/CAD's break of 1.2448 minor support suggest that a short term top is formed at 1.2598, after failing to sustain above 55 day EMA. Intraday bias is turned back to the downside for 38.2% retracement of 1.2061 to 1.2598 at 1.2393, or even further to 61.8% retracement at 1.2266. But we'll look for bottoming sign below 1.2266. On the upside, break of 1.2598 will resume the rise from 1.2061 for 1.2777 resistance.

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 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.

EUR/USD - 1.1878

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.1869

Kijun-Sen level                  : 1.1841

Ichimoku cloud top             : 1.1703

Ichimoku cloud bottom      : 1.1774

Original strategy  :

Buy at 1.1780, Target: 1.1880, Stop: 1.1745

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.1820, Target: 1.1920, Stop: 1.1785

Position : -

Target :  -

Stop : -

As the single currency has continued heading north after brief pullback, adding credence to our view that recent decline from 1.2093 top has ended at 1.1669 last week and mild upside bias remains for this move to extend gain to 1.1895-00 (61.8% Fibonacci retracement of 1.2035-1.1669), however, near term overbought condition should prevent sharp move beyond 1.1930-35 (61.8% Fibonacci retracement of 1.2093-1.1669) and 1.1970 should remain intact, bring retreat later.

In view of this, would not chase this rise here and we are still looking to buy euro on subsequent pullback as 1.1815-20 should limit downside and bring another rebound. Below minor support at 1.1795 would defer and risk correction to 1.1770 but downside should be limited to 1.1745-50 and price should stay above indicated support at 1.1719, bring another rise later. 

US equities surged to new records while Dollar was pressured as markets perceived FOMC minutes released as slightly dovish ones. DOW rose 42.21 pts or 0.18% to close at 22872.89. S&P 500 rose 4.6 pts or 0.18% to close at 2555.24. Both were new record highs. 10 year yield was flat though at 2.345. Dollar index dipped to as low as 92.89 and breach of 92.94 near term support now suggests more downside in near term. Gold hits as high as 1297.9 in Asian session and is set to take on 1300 handle, comparing to last week's low at 1262.8. That is consistent with Dollar's weakness this week. Meanwhile, Sterling and Euro remain the strongest ones for the week so far, Yen trails behind Dollar as the second weakest.

Fed fund futures are pricing in 88% chance of a December hike, slightly lower that yesterday's 93%. Nonetheless, Fed is still on track for a December hike. The markets seemed to be focused more on the split view regarding inflation, seeing the long discussions on the topic in the minutes. As the minutes suggested, 'many' participants continued to believe 'cyclical pressures' would 'show through to higher inflation' in the medium term and 'many judged that at least some of the softening this year to be idiosyncratic'. Moreover, the members 'continued to project that inflation would edge higher in the next couple of years and that it would reach the Committee's longer-run objective in 2019'.

Note that the phrase 'edge high' is less hawkish that the term 'increase' used in July. On the other hand, the minutes also suggested that 'several' participants were concerned that 'the persistence of low rates of inflation might imply that the underlying trend was running below 2%, risking a decline in inflation expectations'. On net, the FOMC 'on balance' forecasted that PCE inflation would stabilize around the target over the medium term. This was compared to 'most participants' in the July minutes.

More on FOMC Minutes

• Fed On Track To Raise Rate In December
• FOMC Minutes: Core Members Still Want To Hike In December
• Fed Minutes Show Confidence in Economic Outlook, But Some Concern Over Weak Inflation
• Fed Reaffirms Likely December Rate Hike Despite Concerns Over Weak Inflation

Fifth round of Brexit negotiations to conclude without conclusions

The fifth and final round of Brexit negotiation before EU summit on October 19/20 is set to end. So far, there is no positive news coming out from UK and EU officials s. Brexit Secretary David Davis and EU's chief Brexit negotiator Michel Barnier will sum up the state later today. There is practically no chance for having "sufficient progress" to move on to post-Brexit trade agreements. And earlier this week, European Council President Donal Tusk warned that if the current "slow pace" of negotiations continued the UK and the EU would "have to think about where we are heading". And, it's doubtful whether that no conclusion could be made even until December.

On the data front

Japan domestic CGPI rose 3.0% yoy in September. Australia consumer inflation expectation rose 4.3% in October, home loans rose 1.0% in August. UK RICS house price balance was unchanged at 6 in September. Eurozone industrial production will be featured in European session. US PPI, jobless claims and Canada new housing price index will be released in US session.

USD/CAD Daily Outlook

Daily Pivots: (S1) 1.2431; (P) 1.2481; (R1) 1.2509; More....

USD/CAD's break of 1.2448 minor support suggest that a short term top is formed at 1.2598, after failing to sustain above 55 day EMA. Intraday bias is turned back to the downside for 38.2% retracement of 1.2061 to 1.2598 at 1.2393, or even further to 61.8% retracement at 1.2266. But we'll look for bottoming sign below 1.2266. On the upside, break of 1.2598 will resume the rise from 1.2061 for 1.2777 resistance.

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 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.

Economic Indicators Update