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Daily Pivots: (S1) 0.8811; (P) 0.8850; (R1) 0.8871; More…

Intraday bias in USD/CHF remains neutral as consolidation from 0.8916 is still extending. Outlook remains bullish as long as 0.8773 resistance turned support holds. On the upside, break of 0.8916 and sustained trading above 61.8% retracement of 0.9223 to 0.8374 at 0.8899 will pave the way back to 0.9223 key resistance.

In the bigger picture, price actions from 0.8332 (2023 low) are currently seen as a medium term corrective pattern. Rise from 0.8374 is seen as the third leg. Overall outlook will continue to stay bearish as long as 0.9223 resistance holds. Break of 0.8332 low is in favor at a later stage when the consolidation completes.

Daily Pivots: (S1) 0.6467; (P) 0.6489; (R1) 0.6530; More...

Intraday bias in AUD/USD stays neutral and some more consolidations would be seen above 0.6440 temporary low. But outlook will stay bearish as long as 0.6687 resistance holds. On the downside, decisive break of 61.8% projection of 0.6941 to 0.6511 from 0.6687 at 0.6421 will resume the fall from 0.6941 to 100% projection at 0.6257 next.

In the bigger picture, rise from 0.6269 (2023 low) should have completed with three waves up to 0.6941. Corrective pattern from 0.6169 (2022 low) is now extending with another falling leg. Deeper decline would be seen back to 0.6269 as sideway trading extends.

Daily Pivots: (S1) 1.3978; (P) 1.4041; (R1) 1.4077; More...

Intraday bias in USD/CAD is turned neutral with current retreat, but consolidations would be brief as long as 1.3958 resistance turned support holds. Above 1.4104 will resume larger up trend to 61.8% projection of 1.3418 to 1.3958 from 1.3841 at 1.4175. Nevertheless, break of 1.3958 will bring lengthier consolidations, bring deeper pull back to 1.3841 cluster support (38.2% retracement of 1.3418 to 1.4104 at 1.3842).

In the bigger picture, up trend from 1.2005 (2021) is resuming with break of 1.3976 key resistance (2022 high). Next target is 61.8% projection of 1.2401 to 1.3976 from 1.3418 at 1.4391. Now, medium term outlook will remain bullish as long as 1.3418 support holds, even in case of deep pullback.

Daily Pivots: (S1) 0.9347; (P) 0.9358; (R1) 0.9372; More....

No change in EUR/CHF's outlook as consolidation continues inside converging triangle. Intraday bias remains neutral at this point. On the downside, break of 0.9331 will target 0.9305 support first. Firm break there will bring retest of 0.9209 low. On the upside, break of 0.9444 will bring stronger rally to 0.9506 resistance next.

In the bigger picture, fall from 0.9928 is seen as part of the long term down trend. Repeated rejection by 55 D EMA (now at 0.9410) keeps outlook bearish for breaking through 0.9209 low at a later stage. Nevertheless, sustained trading above 55 D EMA will confirm medium term bottoming at 0.9209 and bring stronger rebound back towards 0.9928 key resistance.

Daily Pivots: (S1) 194.93; (P) 195.54; (R1) 196.71; More...

Intraday bias in GBP/JPY is turned neutral first as consolidation from 194.28 extends. But further decline is expected as long as 198.43 resistance holds. Corrective rise from 180.00 could have completed with three waves up to 199.79, after hitting channel resistance. Below 194.28 will target 193.45 resistance turned support. Decisive break there will target 183.70 next. Nevertheless, break of 198.43 will dampen this bearish view and bring retest of 199.79 high instead.

In the bigger picture, price actions from 208.09 are seen as a correction to whole rally from 123.94 (2020 low). The range of consolidation should be set between 38.2% retracement of 123.94 to 208.09 at 175.94 and 208.09. However, decisive break of 175.94 will argue that deeper correction is underway.

Daily Pivots: (S1) 162.81; (P) 163.40; (R1) 164.52; More....

Intraday bias in EUR/JPY is turned neutral first as recovery from 162.25 extends. But further decline is expected as long as 165.02 resistance holds. Corrective rebound from 154.40 could have completed with three waves up to 166.77 already, ahead of 61.8% retracement of 175.41 to 154.40 at 167.38. Below 162.25 will target 155.14 support next. However, firm break of 165.02 will dampen this bearish view and bring retest of 166.67 high instead.

In the bigger picture, price actions from 175.41 are seen as correction to rally from 114.42 (2020 low). The range of consolidation should have been set between 38.2% retracement of 114.42 to 175.41 at 152.11 and 175.41 high. However, decisive break of 152.11 would argue that deeper correction is underway.

Daily Pivots: (S1) 0.8342; (P) 0.8358; (R1) 0.8375; More...

Outlook in EUR/GBP is unchanged and intraday bias stays neutral. Further decline is expected as long as 0.8446 resistance holds. On the downside, below 0.8306 minor support will turn bias back to the downside for 0.8259 first, and then 0.8201 key support. Nevertheless, firm break of 0.8446 will confirm short term bottoming.

In the bigger picture, down trend from 0.9267 (2022 high) is in progress. Next target is 0.8201 (2022 low), but strong support should be seen there to bring rebound. However, outlook will remain bearish as long as 0.8624 resistance holds even in case of strong rebound. Decisive break of 0.8201 will indicate long term bearish reversal.

Daily Pivots: (S1) 1.6253; (P) 1.6307; (R1) 1.6340; More...

EUR/AUD weakens notably after failing to sustain above 55 D EMA, but downside is held well above 1.6161 temporary low. Intraday bias stays neutral and risk remains on the downside for the moment. On the downside, below 1.6161 will target a test on 1.5996/6002 key support zone. Nevertheless, break of 1.6359 will turn bias to the upside for stronger rebound towards 1.6598 resistance instead.

In the bigger picture, as long as 1.5996 support holds, up trend from 1.4281 (2022 low) is still expected to resume through 1.7180 at a later stage. However decisive break of 1.5996 will argue that the medium term trend might have reversed. Deeper fall would be seen to 61.8% retracement of 1.4281 (2022 low) to 1.7180 at 1.5388, even as a correction.

The forex markets remain subdued in Asian session, with all major pairs and crosses confined within yesterday’s tight ranges, and many still constrained within last week’s bounds. Among the majors, Australian Dollar is showing slight strength supported by hawkish RBA minutes, followed by Swiss Franc and Canadian Dollar. Meanwhile, Japanese Yen lags as the weakest performer, trailed by the Dollar and New Zealand Dollar, with Sterling and Euro positioned in neutral territory. However, the lack of clear directional movement reflects the ongoing consolidative phase.

Today’s primary focus will be on Canada’s inflation data. October’s headline CPI is projected to rise to 1.9%, while CPI common is expected to remain steady at 2.1%. These results would reinforce expectations that the BoC will maintain its swift easing path, likely cutting rates again by 50 bps at its December 11 meeting. October’s BoC rate cut and minutes highlighted the need for aggressive easing due to labor market softness and a requirement to stimulate growth to absorb economic slack. Market participants anticipate this approach to continue.

Technically, a temporary top was formed at 1.4104 in USD/CAD with current retreat. But consolidations should be relatively brief as long as 1.3958 resistance turned support holds. Break of 1.4104 will resume larger up trend to 61.8% projection of 1.3418 to 1.3958 from 1.3841 at 1.4175. However, firm break of 1.3958 will indicate that lengthier consolidation is underway, with risk of deeper pullback to 1.3841 cluster support (38.2% retracement of 1.3418 to 1.4104 at 1.3842).

In Asia, at the time of writing, Nikkei is up 0.36%. Hong Kong HSI is up 0.03%. China Shanghai SSE is down -0.92%. Singapore Strait Times is up 0.73%. Japan 10-year yield is down -0.0055 at 1.071. Overnight, DOW fell -0.13%. S&P 500 rose 0.39%. NASDAQ rose 0.60%. 10-year yield fell -0.014 to 4.414.

RBA minutes highlight need for multiple good quarterly inflation reports before easing

In the minutes from the November meeting, RBA emphasized “minimal tolerance” for a prolonged period of high inflation, acknowledging the already “lengthy period” of elevated prices. They underscored the need to observe "more than one good quarterly inflation outcome" before concluding that a sustainable disinflation trend was underway.

Members discussed various scenarios that could challenge the forecasts, necessitating adjustments in policy.

One critical scenario revolved around weaker consumption. If consumption proved “persistently and materially weaker” than anticipated and threatened to significantly lower inflation, RBA suggested that a rate cut might be warranted. Conversely, stronger recovery in consumption could mean the current monetary stance would need to "remain in place for longer".

The labor market also featured prominently in deliberations. Should employment conditions ease more sharply than expected, resulting in rapid disinflation, the Board acknowledged that looser monetary policy might become appropriate. On the other hand, if the economy’s supply capacity turned out to be “materially more limited” than assumed, a tighter stance could be required.

External risks were also assessed, including potential major shifts in US economic policy following the presidential election, uncertainty around the scope of China’s anticipated stimulus measures, and the broader implications of rising global government debt levels.

BoE’s Greene cautions against aggressive rate cuts amid persistent services inflation and wage growth

BoE MPC member Megan Greene warned during an event overnight that services inflation remains stubbornly high, with wage growth exceeding levels consistent with the 2% inflation target. “There’s some risk that wage growth might be stickier than we would hope,” she said, adding that this could keep both services and overall inflation elevated.

Greene emphasized the importance of a cautious approach, stating that “the risk of cutting too early or too aggressively is a greater risk than going a bit more slowly.”

Feedback from firms suggests wage growth could settle closer to 4%, well above the desired level. Companies may respond to higher costs by increasing prices, reducing employment or hours, investing in productivity-enhancing capital, or absorbing costs into profit margins, she noted.

She also highlighted the UK’s vulnerability to external shocks as an open economy. “Historically speaking, about a third of the moves in our curve in the UK were influenced by things happening outside the UK. Now it’s about half.”

Greene pointed to the outsized influence of the US Treasury curve, describing it as a “drunken dragon” that heavily impacts the UK market, especially amid global geopolitical risks and shifts in US economic policy under the president-elect.

Looking ahead

Eurozone CPI final and Swiss trade balance will be released in European. Canada CPI will take center stage later in the day. US will release building permits and housing starts.

EUR/AUD Daily Outlook

Daily Pivots: (S1) 1.6253; (P) 1.6307; (R1) 1.6340; More...

EUR/AUD weakens notably after failing to sustain above 55 D EMA, but downside is held well above 1.6161 temporary low. Intraday bias stays neutral and risk remains on the downside for the moment. On the downside, below 1.6161 will target a test on 1.5996/6002 key support zone. Nevertheless, break of 1.6359 will turn bias to the upside for stronger rebound towards 1.6598 resistance instead.

In the bigger picture, as long as 1.5996 support holds, up trend from 1.4281 (2022 low) is still expected to resume through 1.7180 at a later stage. However decisive break of 1.5996 will argue that the medium term trend might have reversed. Deeper fall would be seen to 61.8% retracement of 1.4281 (2022 low) to 1.7180 at 1.5388, even as a correction.

Short Term Elliott Wave View in EURUSD suggests cycle from 9.25.2024 high is in progress as a zigzag. Down from 9.25.2024 high, wave A ended at 1.076 and wave B rally ended at 1.09369. Wave C lower is in progress as a 5 waves impulse Elliott Wave structure. Down from 11.6.2024 high, wave (i) ended at 1.082 and wave (ii) rally ended at 1.0857. Wave (iii) lower ended at 1.0718 and wave (iv) ended at 1.078. Wave (v) lower ended at 1.0682 which completed wave ((i)) in higher degree. Rally in wave ((ii)) ended at 1.0825 with internal subdivision as a zigzag.

Pair then turned lower in wave ((iii)). Down from wave ((ii)), wave (i) ended at 1.076 and rally in wave (ii) ended at 1.0809. Pair resumed lower in wave (iii) towards 1.059 and rally in wave (iv) ended at 1.0654. Pair extended lower 1 more time in wave (v) towards 1.0493 which completed wave ((iii)) in higher degree. Wave ((iv)) is in progress as a double three Elliott Wave structure. Up from wave ((iii)), wave (w) ended at 1.0593 and pullback in wave (x) ended at 1.0513. Expect wave (y) higher to complete at 1.061 – 1.067 area and this should complete wave ((iv)) in higher degree. From there, expect the pair to extend lower.

EURUSD 60 Minutes Elliott Wave Chart

EURUSD Elliott Wave Video

https://www.youtube.com/watch?v=rZrMUvzElMY