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The Japan 225 stock index failed to post a lower low on September 11 and confirmed a failure swing on September 12 when it picked above 19737, which extended to an uptrend, sending the index to a multi-month high of 20624 on October 3. Bias in the short-term and the medium term is bullish according to technical indicators.

The RSI and the MACD signal a bullish picture in the short-term, with both technical indicators fluctuating far above their neutral zones. Particularly the RSI is above 50 and marginally below overbought area, while the MACD is above zero and its signal line. Moreover, the fact that the index is trending above the 20-day Exponential Moving Average and the Ichimoku cloud point to a bullish bias as well.

Should the index continue rising, the August 9, 2015, top of 20935 could act as a resistance before the psychological levels 21000 and 23000 come into view.

Otherwise, if the index pulls back, an immediate support could be found at 20223, which was repeatedly tested in the second half of September. Further downside movements from here, would turn the bullish bias into neutral one and target the top of the Ichimoku cloud at 19781. A break below the August 29 bottom of 19040 would see a resumption of the downtrend started on July 11.

Turning to the medium term, the index is likely to follow a bullish path as the bullish cross between the 20 and the 50-day EMA is still in place and both EMA lines are trending up.

EUR/USD

It was another rough start to the week for the EUR as the common currency was affected by political jitters in Spain. The Catalonian referendum, which resulted in hundreds injured as the central police clashed with local voters, revived concerns over the fragility of the union, after Brexit. The unsought violence only deepened Spain political crisis, triggered the response of the UN High Commissioner for Human Rights, Zeid Ra'ad Al Hussein, called for "independent and impartial investigations into all acts of violence." This comes after a sour Merkel' victory the previous week in the German election. Despite macroeconomic data indicated solid growth in the EU, such figures are worthless when the union itself it's on doubt.

In the data front, September final Markit manufacturing PMI for the EU was revised to 58.1 from a preliminary estimate of 58.2, anyway above August reading of 57.4, indicating that conditions in the manufacturing sector strengthened to the greatest extend in over six-and-a-half years, according to the official report. US numbers, however, were also above expected, preventing the pair from recovering later on the day, as the US ISM Manufacturing index came in at 60.8 in September from previous 58.8. Dollar's advance was halted by a dovish speech from Minneapolis Fed Kashkari, who claimed that the Fed is responsible for the weaker inflation, and shouldn't raise rates before inflation hits 2.0%.

The pair settled in the 1.1740 region after trading as low as 1.1730, heading into the Asian opening with a persistent bearish tone in intraday charts, as the price holds near its September low of 1.1716, and further away from the 1.1820/30 region, a now key resistance area. In the 4 hours chart, the price settled below all of its moving averages, although the 20 SMA remains flat around 1.1780, indicating that the bearish trend has lost momentum, at least temporarily. In the same chart, technical indicators suggest the same, having turned flat, but given that they hold within bearish territory, the downside remains favored towards 1.1661, August monthly low.

Support levels: 1.1720 1.1690 1.1660

Resistance levels: 1.1780 1.1825 1.1860

USD/JPY

The USD/JPY pair struggled for direction this Monday, ending the day marginally higher around 112.60. The pair advanced up to 113.05 at the beginning of the day, but bulls lost the grip, despite positive US data and rising US yields. Earlier on the day, Japan’s quarterly Tankan business sentiment survey surged to its highest in a decade, with the main index for Q3 up to 22 from previous 17, a sign that the economic recovery is broadening. In the US, yields mover marginally higher, with the 10-year note benchmark up to 2.34% after closing on Friday at 2.32%. Also, the Nikkei Manufacturing PMI rose in September to 52.9, beating previous estimates of 52.6. The pair is in a consolidative phase with the bullish trend holding in the background. In the 4 hours chart, technical indicators continue to be stuck around their mid-lines, but the price remains above a strongly bullish 100 SMA, which now advanced up to the 111.60 region. The pair topped at 113.25 last week, the level to surpass to confirm another leg higher, which can extend up to the critical 114.40 region during the following sessions.

Support levels: 112.20 111.85 111.50

Resistance levels: 112.90 113.25 113.60

GBP/USD

The GBP/USD pair plunged to 1.3256, its lowest ever since the latest BOE's meeting, when Governor Carney said markets could be underestimating odds of a rate hike in the UK. The pair was trading around 1.3200 ahead of the event, as it has now become a probable bearish target, as despite the hawkish rhetoric towards rate hikes persists, they are being offset by concerns about the economic consequences on Brexit, and the absence of progress in negotiations, despite latest PM May's speech. The pair fell after breaking a key support, the 61.8% retracement of the latest bullish run at 1.3340, later fueled by a disappointing September Markit manufacturing PMI for the UK, down to 55.6 against the previous 56.7 and the expected 56.4. The pair recovered modestly from the mentioned low, but stands barely 20 pips above the level, and still bearish according to technical readings, as in the 4 hours chart, the 20 SMA extended its decline well above the current level, whilst technical indicators barely decelerate their declines, now trying to stabilize within oversold readings. The same chart shows that the price met support around its 200 EMA, usually a tough bone to break, but also a line in the sand, as a bearish extension below it will likely result in a steeper decline during the following sessions.

Support levels: 1.3250 1.3210 1.3170

Resistance levels: 1.3300 1.3340 1.3385

GOLD

Gold's bearish trend persisted, with spot down to fresh over 1-month low at the beginning of the week, with spot closing the day at $1.274.38 a troy ounce after falling to 1,271.10. Broad dollar's strength kept the commodity under pressure, further undermined by US equities rallying to record highs. Negative comments from US Fed members prevented gold from falling further, as adding to Kashkari comments, later on the day Fed's Kaplan warned that Q3 growth may be sluggish, amid the hurricanes that hit the US this past September. The fact that the bounce was shallow, suggest that the market still believes the Fed will pull the trigger next December, and therefore leans the scale towards the downside. Spot gold's daily chart shows that the yellow metal ended the session around its 100 DMA, and well below a bearish 20 DMA, whilst technical indicators hold near oversold territory, supporting additional slides ahead. The next key support comes at 1,261.30, the 200 DMA in the same chart. In the shorter term, and according to the 4 hours chart, spot is also biased lower, despite technical indicators lost downward momentum, as they hold anyway within negative territory, whilst the price keeps developing below sharply bearish moving averages.

Support levels: 1,271.10 1,261.30 1,252.90

Resistance levels: 1,283.10 1.294.25 1,303.95

WTI CRUDE OIL

Crude oil prices plunged this Monday, hit by news indicating a decline in OPEC's compliance with the output cut agreement in September, according to a Reuters' poll, which estimates compliance in the month was just of 86%. Also, broad dollar's strength weighed on the black gold, with WTI futures ending the day around $50.55 a barrel, after trading as low as 50.03. The US benchmark closed the day right below the 38.2% retracement of its latest bullish run between 46.99 and 52.84 at 50.60, keeping the risk towards the downside for this Tuesday. In the daily chart, technical indicators maintain their strong bearish within positive territory, now nearing their mid-lines, whilst the price remains well above the 100 and 200 DMAs, maintaining the current decline as corrective. In the 4 hours chart, the price settled a few cents above a bullish 100 SMA after falling to near the 50% retracement of the mentioned rally at 49.90, whilst technical indicators bounced modestly from oversold readings, but are far from suggesting an upcoming recovery.

Support levels: 49.90 49.30 48.65

Resistance levels: 50.60 51.20 51.85

DJIA

Wall Street ended firmly up this Monday, with the DJIA up 152 points to close at an all-time high of 22,557.60. The Nasdaq Composite added 20 points, to 6,516.72, whilst the S&P gained roughly 10 points, to 2,529.12, both also posting record closes. US equities rally was backed by strong manufacturing figures released early US session, with tech and gun-related equities among the best performers, and casino shares down after the Las Vegas massacre. Within the Dow, Intel Corp. was the best performer, up 2.39%, followed by General Electric that added 1.62%. Coca-Cola led decliners, down 0.48%, followed by Exxon Mobil that lost 0.43% amid falling oil prices. Dow's daily chart shows that the RSI indicator accelerated north, currently at 75, while the Momentum lags, consolidating anyway within bullish territory. Furthermore, the index continues developing above bullish moving averages, all of which favors further gains ahead. Shorter term, and according to the 4 hours chart, the index maintains its strong bullish bias, also advancing sharply beyond bullish moving averages, and while technical indicators remain within extreme overbought territory, anyway presenting upward slopes.

Support levels: 22,500 22,456 22,403

Resistance levels: 22,580 22,625 22,660

FTSE100

The FTSE 100 closed at 7,438.84, up 66 points or 0.90%, helped by a weakening Pound and strong gains in travel stocks, this last, on news that Monarch airline collapsed, opening market for its rivals. EasyJet led gainers, up 5.18%, followed by Barratt Developments that added 4.23%. Mediclinic International, on the other hand, led decliners, down by 1.08%. The strong intraday advance has took off the negative bias of the benchmark, which ended the day above its 100 DMA for the first time since September 12th. Additionally, and in the daily chart, technical indicators entered bullish territory, indicating that the advance may continue this Tuesday, particularly on a break above 7,441, the daily high and the immediate resistance. Shorter term, and according to the 4 hours chart, the index is also bullish, although technical indicators have lost upward strength after reaching overbought levels. Nevertheless, and in this last time frame, a bullish 20 SMA is crossing above the 100 SMA below the current level, reflecting the ongoing upward momentum and also supporting further gains ahead.

Support levels : 7,354 7,312 7,282

Resistance levels: 7,383 7,422 7,461

DAX

The German DAX advanced 74 points on Monday, to close the day at 12,902.65, with all European indexes closing in the green as the common currency fell. Also, backing the rally in German equities was the local Markit manufacturing PMI, confirmed at 60.6 in September, the strongest growth performance since early 2011. Most members were up within the benchmark, with Deutsche Lufthansa leading advancers, up 3.34%, as airline companies gained on news UK's Monarch airline declare its bankruptcy. Heidelberg Cement led decliners, down 1.35%, whilst banks also closed in the red, down by around 0.30% each. The index closed at its highest since June, when it posted an intraday record high of 12.953, and technical readings in the daily chart favor additional gains ahead, as technical indicators regained their upward strength, with the RSI indicator currently at 76, as the index moves further above bullish moving averages. In the 4 hours chart, technical readings also support a new leg higher, as the 20 SMA accelerated north below the current level, whilst technical indicators have turned flat after the close, within extreme overbought readings.

Support levels: 12,796 12,752 12,710

Resistance levels: 12,847 12,881 12,933

The DAX is closed in the Tuesday session, as Germany celebrates Unity Day. The DAX started the week with gains, and closed the Monday session at 12,902.65, up 0.58% on the day. On the release front, the sole eurozone event, Producer Price Index, gained 0.3%, above the forecast of 0.1%. This marked the indicator's strongest gain since January. On Wednesday, the eurozone and Germany releases Final Services PMI, and ECB President Mario Draghi will speak at an event in Frankfurt.

The DAX continues its upward run, as the index has now posted winning sessions for six straight days, and is currently at its highest level since June 20th. US stock markets closed the Monday session with record highs, and the positive momentum has extended to European markets. There was good news on the inflation front, as Eurozone PPI beat expectations with a gain of 0.3 percent. Is eurozone inflation on its way up? If upcoming inflation indicators follow suit and point upwards, the ECB will have to revisit tightening its ultra-loose monetary policy. With the eurozone showing sustained growth in 2017, the cautious ECB will be reluctant to tighten policy, unless inflation moves higher. However, the ECB will have to make some important decisions, as the bank's current asset-purchase program is scheduled to terminate in December.

Catalonia, one of the richest regions in Spain, was a scene of chaos and violence over the weekend. The Catalan regional government attempted to hold a referendum on independence, but the national government was adamantly opposed to the move and banned the vote. When voters showed up at polling stations, the police moved in with force, injuring close to 900 civilians. Catalonian officials claimed that 90 percent of voters had voted for independence, setting the stage for a full-blown crisis with Madrid. The Spanish constitution prohibits any region from seceding, but Catalan Carles Puigdemont has not showed any intent to back down, and has called for a general strike on Tuesday. Although the euro lost ground on Monday, the crisis is not expected to continue to weigh on the currency, given that the referendum is viewed as an issue local to Spain, and not to the eurozone in general. As well, the Spanish economy is in good shape, so a constitutional crisis is unlikely to affect the country's economic growth.

Price failed to stay below the outside sliding line (SL) and now tries to climb higher because the Yen is demolished by the Nikkei’s impressive rally. The Nikkei stock index rallied and jumped much above the 20498 previous high. The index opened with a gap up in the yesterday’s morning, signaling that the bulls are in full control. However, only a valid breakout above the median line (ml) of the black ascending pitchfork will confirm a further increase in the upcoming weeks.

Price increased significantly in the second part of the yesterday’s trading session and has managed to stay much above the upper median line (uml) of the minor ascending pitchfork. Price increased today and resumes the yesterday’s increase. Technically, it should approach and reach the upper median line (uml) of the descending pitchfork in the upcoming period after the failure to reach the median line (ml).

AUD/USD drops further and extends the bearish movement. The USD drags the price lower as the USDX has managed to resume the yesterday's impressive rally. Price is trading in the red and is targeting new lows after the retest of a dynamic resistance (support turned into resistance). Technically is expected to drop further in the upcoming days because has fallen much below the 0.7807 August low.

Remains to see what will happen because the USDX is pressuring the 93.81 static resistance, has climbed above it, but this needs to be confirmed.

The AUD/USD increased a little in the last hour as the USDX has slipped lower after the morning rally. The Reserve bank of Australia has decided to leave the Cash Rate unchanged at 1.50%, matching expectations. The Australian Commodity Prices increased only by 18.3% in September, less versus the 20.8% growth in the former reading period, while the ANZ Job Advertisements rose by 0.0%, less compared to the 1.7% growth in the former reading period. Moreover, the Building Approvals surged by 0.4%, less versus the 1.1% estimate.

Price dropped further after the yesterday's minor indecision and reached the 0.7784 level. The perspective remains bearish as long as is trading below the median line (ml) of the minor descending pitchfork. The next downside target will be at the 0.7755 level, but could be attracted by the first warning line (WL1) of the major ascending pitchfork.

The Aussie dollar remains in red on Tuesday and hit new 2 ½ month low at 0.7785 on renewed probe below daily cloud base (0.7800).

The Reserve Bank of Australia held interest rates steady at record low at 1.5%, despite signals that the economy continues to improve.

The pair remains in steady descend but so far unable to clearly break below cloud base. Narrow consolidation could be expected before bears resume, with 0.7835/60 resistance zone to cap upside attempts.

Close below daily cloud will be bearish signal, with violation of next support at 0.7770 (100SMA) needed to confirm bearish continuation of the wave C from 0.8102 (20 Sep high) towards its FE 200% at 0.7733.

Alternative scenario requires sustained lift above 0.7860 to sideline immediate bearish threats and turn focus towards upper pivot at 0.7915/10 (daily cloud top, reinforced by falling Tenkan-sen).

Res: 0.7820, 0.7835, 0.7860, 0.7910
Sup: 0.7800, 0.7785, 0.7770, 0.7733

The Euro is holding in daily cloud on Tuesday and probes again below strong supports at 1.1720/10 (Fibo 38.2% of 1.1118/1.2092 rally / weekly 200SMA).

The pair hit new low at 1.1696 (the lowest since 17 Aug) but so far without clear break lower. Monday’s long bearish candle weighs on near-term action for final break below 1.1720/10 pivots and fresh bearish acceleration which could extend towards next strong supports at 1.1605/1.1594 (50% retracement of Jun/Sep 1.1118/1.2092 ascend / daily cloud base).

Meanwhile, extended consolidation could be expected while supports at 1.1720/10 hold, but upside action should be limited under cloud top, as formation of 10/55 SMA’s bear-cross (1.1825) maintains downside pressure.

Res: 1.1748, 1.1764, 1.1780, 1.1810
Sup: 1.1720, 1.1696, 1.1662, 1.1594

Cable bounced from fresh 2 ½ week low at 1.3228, posted in Asia, consolidating strong fall on Monday and keeping bearish near-term stance.

Initial probe below daily Kijun-sen (1.3253) did not result in clear break lower. Bears are expected to consolidate before fresh push lower for test of rising 30SMA (1.3209) and possible extension towards 55SMA at 1.3120).

Monday’s close below weekly 100SMA (1.3363) and Fibo 61.8% of 1.3148/1.3655 upleg generated bearish signals, turning these points to resistances which should ideally cap upside attempts.

Today’s focus is on UK Construction PMI data. Forecast for September lies at 51.0 vs 51.1 in Aug, with lower than expected release to put sterling under fresh pressure (especially if Sep release falls below 50 threshold), while upside surprise would support pound for further recovery.

Res: 1.3287, 1.3342, 1.3363, 1.3401
Sup: 1.3253, 1.3228, 1.3209, 1.3148

The pair maintains firm tone on Tuesday and is back above 113.00 handle, approaching recent highs at 113.20/25.

Fresh bullish extension on Tuesday is on track to fully retrace 113.25/112.21 correction and generate bullish signal on eventual close above cracked 112.80 barrier (Fibo 76.4% of 114.49/107.31 descend) and lift above 113.20/25 spikes.

Bullish tech on daily chart are supportive, with rising 10SMA tracking the advance in past three week and bullish stance being boosted by 10/200SMA Golden cross.

Sustained break above 113.20/25 pivots is required to confirm scenario and open way towards next barriers at 113.57/114.00 (14 July lower top / round-figure resistance) with key barrier at 114.49 (114 July peak) expected to come in focus.

However, recent repeated failures to sustain probes above 113.00 warn of possible extended consolidation if bulls stall again.

Bullish stance is expected to stay intact while rising 10 SMA (112.41) holds, while break here would generate bearish signal.

Res: 113.25, 113.57, 114.00, 114.49
Sup: 112.61, 112.41, 112.21, 111.98