Sample Category Title

USDCHF: With the pair selling off on Tuesday and seen following through lower on Wednesday, more weakness is envisaged in the days ahead. On the downside, support lies at the 0.9700 level. A turn below here will open the door for more weakness towards the 0.9650 level and then the 0.9600 level. On the upside, resistance resides at the 0.9800 level where a break will clear the way for more strength to occur towards the 0.9850 level. Further out, resistance comes in at the 0.9900 level. Above here if seen will turn attention to 0.9950. All in all, USDCHF faces downside pressure on price weakness

USD/JPY - 112.18

Original strategy  :

Sell at 112.80, Target: 111.80, Stop: 113.15

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 112.80, Target: 111.80, Stop: 113.15

Position :  -

Target :  -

Stop : -

Although dollar rebounded after falling to 111.99 yesterday and initial upside risk is for recovery to 112.70-75 (50% Fibonacci retracement of 113.44-111.99), reckon 112.83-89 (yesterday’s high and 61.8% Fibonacci retracement) would limit upside and bring another decline later, below said support at 111.99 would add credence to our view that top has been formed at 113.44 and extend weakness to 111.75-80, then towards 111.47 support but oversold condition would limit downside and reckon 111.11 support would remain intact.

In view of this, we are looking to sell dollar on recovery as 112.83 resistance should limit upside and bring another decline. A break of indicated level at 112.83-89 would abort and signal low is formed, bring a stronger rebound to 113.10-20 but price should falter well below said last week’s high at 113.44. 

Pullback from $94.08 peak (06 Oct recovery high) extends in the fourth day and hit key support at $92.90 (Fibo 38.2% of $90.97/$94.08 correction/base of thick ascending 4-hr cloud). Bears faced headwinds here and may pause recent acceleration lower as slow stochastic is entering oversold territory on daily chart. Daily studies are bullishly aligned and favor reversal at this point, as a plethora of supports, consisting of 55; 20 and 30 SMA's lay just below and underpins. The dollar is awaiting FOMC minutes later today for fresh signals, with hawkish stance which would further boost expectations for rate hike in December, expected to inflate the greenback and sideline risk of deeper pullback. Conversely, break below $92.90/50 support zone (which includes 55; 20; 30SMA's and daily cloud base) would signal further downside and expose supports at $92.16/00 (Fibo 61.8% of $90.97/$94.08/round-figure support.

Res: 93.17; 93.43; 93.82; 94.08
Sup: 92.79; 92.62; 92.52; 92.16

The Hang Seng Stock Index is a free float, adjusted market capitalization, weighted stock Market Index in Hong Kong. The Index records and monitors daily changes of the largest companies of the Hong Kong Stock Market. It is the main indicator of the overall market performance in Hong Kong. These 50 constituent companies represent about 58% of the capitalization of the Hong Kong Stock Exchange. At Elliottwave-Forecast, we have been tracking the Index sequences together with the FTSE 100 (The Financial Times Stock Exchange 100 Index). FTSE 100 is the share Index of the 100 companies listed on the London Stock exchange with higher market capitalisation.

The Hang Seng Index and FTSE 100 both are showing the same sequences since the all-time lows and both are showing an incomplete sequence since the lows at 2008-2009 range. Today, the Market today can advance in 2 types of sequences. The first type is 5-9-13 or motive sequence and the second type is 3-7-11 or corrective sequence. Both the Hang Seng Index and the FTSE 100 advance in a corrective sequence and both have not reached the 100% from all-time low.

The Market by nature will always runs in one of the 2 sequences above. Both Hang Seng and FTSE 100 are showing the same outcome which is an extension to the upside within the cycle since 2008-2009 low. The charts below show the extension target in both indices, and the upside in both indices will drive the rest of the World Indices higher. This means that SPX 500 (The Standard & Poor's 500), which is the market capitalizations of the 500 large companies in the United States, has scope to rally into levels which not many people are expecting such as 3245 or even the 4000 levels.

The rally in SPX 500 from all-time low can become a 5 waves impulse if SPX 500 can break above 3245 before the Hang Seng and FTSE 100 reach the 100% from all time low and finish the blue sequence as charts below show. At the end of the day, the world indices are here to extend and contrary to many popular street opinion, they will remain a buy in the dips in all time frames until Hang Seng and FTSE 100 reach their target.

Hang Seng Stock Index Monthly and Weekly

The Hang Seng Index is showing 5 swings from 2008 lows, which should result in more upside within the blue sequence into the all time 100%. The invalidation for this view in daily degree is the blue 4 low (18278.80) while the invalidation in weekly degree is the black 4 low (10676.29).

FTSE 100 Stock Index

The Index took the 2000 peak, which suggests the bullish sequence from all-time lows is incomplete. In addition, we could also see 5 swing bullish sequence in blue degree from 2009 low, which favors more upside.

The following chart below shows that both Hang Seng and SPX 500 have the same trend

The EURUSD pair has extended its overnight trading gains during today's European session, hitting 1.1844, as the single currency stages a relief rally after the Catalan government opted to enter into further dialogue with the Spanish government.

Sentiment surrounding the EURUSD today is bullish while the pair continues to hold price-action above the key 1.1800 handle. The euro continues to drive higher, as financial markets remain complacent towards political risks in Spain.

The euro has pulled back from its weekly price-high, at 1.1844, and is currently holding price-action above the 1.1800 level, at 1.1820.

Technically, the EURUSD pair is now trading within a bullish inverse head and shoulder pattern on the lower time-frame price-charts, with an upward price projection of 180 pips.

Any technical corrections lower on the EURUSD pair should find support from the 1.1800 and 1.1795 level. Below the 1.1795 level, a deeper pullback towards support at 1.1770 and 1.1740 may take place.

To the upside, key technical resistance is found at the pairs 50-month moving average, at 1.1829 and the recent swing-high, at 1.1844. Once above 1.1844, further resistance is found at 1.1858, 1.1875 and 1.1910.

The USDJPY pair continues to trade at the lower end of its 111.98 to 113.43 trading range, as uncertainty over the Trump administrations U.S tax overhaul plan continues to weigh on the U.S dollar index.

Trading sentiment surrounding the USDJPY pair is slightly bearish, as price-action continues to slip lower, but seemingly unable to close under the 112 level on a higher time-frame basis.

Yesterday, the USDJPY broke underneath the 112.25 range-low, hitting 111.98, but later recovered towards the 112.58 level as sellers failed to close price-action below the 112 handle.

Today's FOMC Meeting Minutes is a key risk event for the USDJPY pair, with sellers looking to target below the 111.90 levels, and buyers looking to test demand above the 113 level.

Key intraday technical support below the 111.98 level is found at 111.90 and the pairs key 200-week moving average, at 111.69. Once below 111.69, further support is found at 111.41 and 110.85.

To the upside, key intraday technical resistance is found at 112.40 and the recent swing price-high, at 112.58. Above 112.58, further resistance is found at 112.90, 113.25 and 113.43.

Gold prices continue to head higher this week, as the metal has posted considerable gains on Wednesday. In the North American session, the spot price for an ounce of gold is $1289.65, up 0.24% on the day. There are no major US releases on the schedule. On Thursday, the US releases PPI and unemployment claims.

All eyes remain on Spain, after Catalan President Carles Puigdemont declared independence on Tuesday, but then qualified the move by suspending any formal secession moves. Puigdemont announced that he is open to dialogue with the Spanish government, but Madrid continues to take a hard line against the Catalan leader. On Wednesday the Spanish government demanded that Puigdemont clarify if he had indeed declared independence. Madrid is reportedly considering imposing Article 155 of Spain's constitution, which would allow the government to suspend the Catalan government and hold new elections. This "nuclear option" could mark a steep escalation in the constitutional crisis. Although Catalan leaders say they have a mandate for independence based on the referendum (in which 90% voted for independence), Catalans are deeply divided over the issue. Several banks and major companies have announced they will move their legal headquarters from Barcelona to Madrid, and the constitutional crisis could take a toll on the Spanish economy if the stalemate continues.

The markets are keeping a close eye on the Federal Reserve, which will release its minutes from the September meeting. At the meeting, the Fed did not raise interest rates but did announce it would begin trimming its $4.2 billion balance sheet in October. This is seen as a vote of confidence in the US economy, which continues to show strong growth. At time of the September meeting, the odds of December rate hike were pegged around 50 percent. However, the odds have now surged to 91 percent. The primary reason for the huge shift in market sentiment can be attributed to Fed policymakers coming out in support of a rate hike, notably Fed Chair Janet Yellen. The lack of inflation remains the most significant impediment to raising rates, but Yellen and other FOMC members have insisted that strong economic conditions will lead to higher inflation levels. Even if inflation does not move higher before 2018, the Fed now appears ready to raise rates for a third and final time this year.

Daily Pivots: (S1) 112.01; (P) 112.41; (R1) 112.85; More...

Intraday bias in USD/JPY remains on the downside for the moment. A short term top should be in place at 113.43, on bearish divergence condition in 4 hour MACD. Also, the pair is rejected by medium term channel resistance. Deeper fall would be seen to downside for 55 day EMA (now at 111.32) 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.

Daily Pivots: (S1) 0.9724; (P) 0.9762; (R1) 0.9788; 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) 1.3146; (P) 1.3186; (R1) 1.3241; 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 .