Sample Category Title

GBP/USD - 1.3254

Original strategy :

Sold at 1.3185, stopped at 1.3220

Position : - Short at 1.3185

Target :  -

Stop : - 1.3220

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Despite falling marginally to 1.3110, as cable found decent demand there and has rallied in London session, the subsequent breach of previous resistance at 1.3228 has shifted risk to the upside as this move signals the fall from 1.3338 has ended at 1.3088, hence further gain to resistance at 1.3287 cannot be ruled out, however, break there is needed to provide confirmation, bring a stronger rebound towards 1.3338 resistance.

On the downside, whilst pullback to 1.3228 (previous resistance turned support) cannot be ruled out, recon 1.3190-00 would limit downside and 1.3150 should hold, bring another rebound later. As near term outlook has turned mixed, would not chase this rise here and would be prudent to stand aside for now.

EUR/USD - 1.1779

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Despite yesterday’s brief fall to 1.1725, lack of follow through selling on break of previous support at 1.1730 and the subsequent rebound 1.1793 suggest further consolidation would take place and recovery to 1.1800 cannot be ruled out, however, still reckon upside would be limited to 1.1820-25 and price should falter well below resistance at 1.1858, bring further choppy trading later.

On the downside, below said support at 1.1725 would extend the fall from 1.1880 top to 1.1700 and possibly towards indicated previous support at 1.1669 but break of latter level is needed to retain bearishness and extend further subsequent decline to 1.1640-45 first. As near term outlook is still mixed, would be prudent to stand aside in the meantime.

USD/JPY - 114.16

Original strategy  :

Buy at 113.40, Target: 114.40, Stop: 113.05

Position :  -

Target :  -

Stop : -

New strategy  :

Buy at 113.80, Target: 114.80, Stop: 113.45

Position :  -

Target :  -

Stop : -

Dollar’s rally after finding renewed buying interest at 113.24 adds credence to our view that recent upmove from 107.32 has resumed and upside bias remains for further gain to 114.45-50 (50% projection of 111.65-114.10 measuring from 113.24), then towards 114.75-80 (61.8% projection), however, overbought condition should prevent sharp move beyond latter level and reckon 115.00 would hold from here.

In view of this, we are looking to buy dollar again on pullback as 113.70-80 should hold, bring another rise. Below support at 113.54 would abort and suggest an intra-day top is formed, bring test of 113.24 support, however, break there is needed to provide confirmation, bring retracement of recent rise to 113.00 later. 

Daily Pivots: (S1) 1.1737; (P) 1.1764 (R1) 1.1787; More...

Intraday bias in EUR/USD remains neutral at this point. On the downside, break of 1.1669 will resume the corrective 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. On the upside, break of 1.1879 will revive 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.

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) 1.3086; (P) 1.3157; (R1) 1.3200; More....

GBP/USD rebounds strongly today but it's staying in range of 1.3026/3337. Intraday bias remains neutral first. 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) 0.9861; (P) 0.9886; (R1) 0.9934; More....

USD/CHF reaches as high as 0.9939 so far and intraday bias remains on the upside. Current rise from 0.9420 should target 61.8% retracement of 1.0342 to 0.9420 at 0.9990. Sustained break there will pave the way to retest 1.0342 high. On the downside, below 0.9837 minor support will turn bias neutral and bring consolidation. But outlook will remain bullish as long as 0.9736 support holds.

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) 113.42; (P) 113.72; (R1) 114.20; More...

USD/JPY's break of 114.09 indicates resumption of recent rally from 107.31. Intraday bias is back on the upside for 114.49 resistance. Decisive break there will confirm that correction pattern from 118.65 has completed at 107.31 already. And USD/JPY should then target a test on 118.65. On the downside, below 113.23 minor support will turn intraday bias neutral. But near term outlook will stay bullish 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) 149.11; (P) 149.60; (R1) 150.06; More

GBP/JPY's rebound from 146.92 resumes after brief consolidation and reaches as high as 151.38 so far. Intraday bias remains on the upside for 152.82 high. Firm break there will confirm resumption of medium term rise from 122.36 and target 163.87 resistance next. On the downside, break of 149.11 minor support will turn bias to the downside and extend the correction from 152.82. In that case, we'd expect strong support from 61.8% retracement of 139.29 to 152.82 at 144.45 to 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.

The 19th National Congress of the Chinese Communist Party culminated with the announcement of the new Politburo Standing Committee (PSC) - the group of officials leading the country in the coming five year. Five out of seven members of the previous PSC were replaced, with only President Xi Jinping and Premier Li Keqiang staying in power. The five new members are Li Zhanshu, Wang Yang, Wang Huning, Zhao Leji and Han Zheng. As we mentioned in the previous report, Li Zhanshu, Zhao Leji, Wang Huning and Chen Min'er have very strong link with President Xi. We are surprised that Chen is not chosen to be the core team. Derailing from the usual practice that has been in place since 1990s, Xi refrained from revealing who his successor is. This suggests that he refuses to step down after the coming 5-year term.

Previous PSC

New PSC

Other evidence that Xi has used this twice-in-a-decade congress to enormously upgrade his status and authority is the inclusion of "Xi's thought on Socialism with Chinese characteristic for a new era" in CCP's constitution. The act has made Xi the most powerful leader after Mao Zedong, even surpassing Deng Xiaoping. While names of both Mao and Deng are enshrined in the constitution, Xi is the only person, besides Mao, whose name is printed in the document before death.

While receiving limited media coverage, the head of the NDRC at the Congress affirmed that China was on track to achieve its 2017 growth target of 6.5%. We believe this affirmation intends to ease market concerns over potential growth slowdown in 2H17, amidst decline in productivity growth as the government curtail heavy industry, such as coal, steel and aluminum production, and construction to reduce pollution, as well as slowdown in housing price growth. With GDP growth at +6.9% in 1H17 and +6.8% in 3Q17, we also expect Chinese full year growth would meet target this year.

Notwithstanding leadership reshuffle, the economic policy would stay unchanged. Indeed, the National Congress is for clarification of CCP's ideology and leadership reshuffle, rather than setting of economic policies. The key aspects of the monetary and fiscal policies have already been lain down at the National Financial Work Conference in July. Meanwhile, any new economic target or related policy should be revealed at the Economic Working Conference usually scheduled in December.

The British pound has moved sharply higher against the U.S dollar, hitting 1.3255, after United Kingdom third quarter GDP came in better than expected, rising 0.4 percent. The GBPUSD pair currently trades around the session high's, as investors await the release of Core Durable Goods Orders data from the United States economy.

The British pound remains intraday bullish against the U.S dollar while trading above the 1.3228 level. Further advancement can be expected towards the 1.3268 and 1.3307 levels, while price-action holds above the key 1.3228 level.

If price-action falls below the 1.3228 level for a sustained period, a further decline should be expected towards the 1.3201 level. Extended intraday GBPUSD support is located at 1.3157.