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Daily Pivots: (S1) 0.8446; (P) 0.8480; (R1) 0.8512; More…

Intraday bias in USD/CHF stays neutral as range trading continues. On the downside, break of 0.8374 will resume the fall from 0.9223 to retest 0.8332 low. Decisive break there will indicate larger down trend resumption. However, considering bullish convergence condition in 4H MACD, break of 0.8548 resistance will confirm short term bottoming, and turn bias back to the upside for 0.8747 resistance.

In the bigger picture, price actions from 0.8332 (2023 low) are currently seen as a medium term corrective pattern, with fall from 0.9223 as the second leg. Strong support could be seen from 0.8332 to bring rebound. Yet, overall outlook will continue to stay bearish as long as 0.9243 resistance holds. Firm break of 0.8332, however, will resume larger down trend from 1.0146 (2022 high).

Daily Pivots: (S1) 0.6756; (P) 0.6798; (R1) 0.6856; More...

AUD/USD's break of 0.6823 confirms resumption of rally from 0.6348. Intraday bias stays on the upside for 61.8% projection of 0.6348 to 0.6823 from 0.6621 at 0.6915 next. On the downside, below 0.6376 minor support will turn intraday bias neutral first. But outlook will remain cautiously bullish as long as 0.6621 support holds, in case of retreat.

In the bigger picture, overall, price actions from 0.6169 (2022 low) are seen as a medium term corrective pattern, with rise from 0.6269 as the third leg. Firm break of 0.6798/6870 resistance zone will target 0.7156 resistance. In case of another fall, strong support should be seen from 0.6169/6361 to bring rebound.

Daily Pivots: (S1) 1.3511; (P) 1.3580; (R1) 1.3626; More...

Intraday bias in USD/CAD remains neutral at this point. On the downside, firm break of 1.3545 minor support will suggest that recovery from 1.3439 has completed, and turn bias to the downside for retesting this low. Nevertheless, sustained break of 38.2% retracement of 1.3946 to 1.3439 at 1.3633 would argue that the decline from 1.3946 has completed. Stronger rally would then be seen to 61.8% retracement at 1.3752 and above.

In the bigger picture, corrective pattern from 1.3976 (2022 high) is extending with another falling leg. While deeper decline could be seen, strong support should emerge above 1.2947 resistance turned support to bring rebound. Rise from 1.2005 (2021 low) is still in favor to resume at a later stage.

Daily Pivots: (S1) 0.9409; (P) 0.9438; (R1) 0.9490; More....

Intraday bias in EUR/CHF remains on the upside for the moment. Rise from 0.9305 is seen as the third leg of the pattern from 0.9209. Further rally would be seen to 0.9579 resistance next. On the downside, below 0.9380 minor support will turn bias back to the downside for 0.9305 support instead.

In the bigger picture, medium term corrective pattern from 0.9407 (2022 low) might have completed with three waves to 0.9928. Decisive break of 0.9252 (2023 low) will confirm long term down trend resumption. Next target will be 61.8% projection of 1.1149 to 0.9407 from 0.9928 at 0.8851. For now, outlook will stay bearish as long as 0.9928 resistance holds, even in case of strong rebound.

Daily Pivots: (S1) 0.8388; (P) 0.8406; (R1) 0.8419; More...

EUR/GBP's break of 0.8399 support confirms resumption of the decline from 0.8624. Intraday bias stays on the downside for 0.8382 low. Firm break there will resume larger down trend. Next near term target will be 61.8% projection of 0.8624 to 0.8399 from 0.8463 at 0.8324. For now, outlook will remain bearish as long as 0.8463 resistance holds, in case of recovery.

In the bigger picture, as long as 0.8624 resistance holds, down trend from 0.9267 is expected to continue. Firm break of 0.8382 will target 0.8201 (2022 low). However, decisive break of 0.8624 will indicate that such down trend has completed, and turn outlook bullish for 0.8764 resistance next.

Daily Pivots: (S1) 1.6313; (P) 1.6383; (R1) 1.6448; More...

Intraday bias in EUR/AUD remains on the downside for the moment. Firm break of 1.6256 support will resume whole fall from 1.7180 to 61.8% projection of 1.7180 to 1.6256 from 1.6629 at 1.6058. On the upside, above 1.6474 minor resistance will turn intraday bias neutral first. But risk will be on the downside as long as 1.6629 resistance holds, in case of recovery.

In the bigger picture, outlook is mixed up by the deeper than expected fall from 1.7180. Yet as long as 1.5996 support holds, up trend from 1.4281 (2022 low) is still in favor to resume at a later stage. Firm break of 1.7180 will pave the way to 61.8% projection of 1.4281 to 1.7062 from 1.5996 at 1.7715.

Daily Pivots: (S1) 158.00; (P) 158.99; (R1) 160.19; More....

Intraday bias in EUR/JPY remains mildly on the upside for the moment. Rise from 155.14 is seen as the third leg of the corrective pattern from 154.40. Further rally would be seen to 163.89, and possibly further to 61.8% retracement of 175.41 to 154.40 at 167.38. On the downside, however, break of 157.11 will turn bias back to the downside for 155.14 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) 187.82; (P) 189.11; (R1) 190.77; More...

Intraday bias in GBP/JPY remains on the upside for the moment. Rise from 183.70 is seen as the third leg of the corrective pattern from 180.00. Further rally would be seen to 193.45 and possibly further to 61.8% retracement of 208.09 to 180.00 at 197.35. Nevertheless, break of 186.68 minor support will turn bias back to the downside for 183.70 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.

Global markets continues to a wave of risk-on sentiment today, with Japan's Nikkei leading the charge in Asia. The index maintained its gains after BoJ decided to keep interest rates unchanged, a move that was widely anticipated.

This positive momentum stems from the strong performance of US equities overnight, as DOW and S&P 500 closed at record highs, in somewhat delayed reaction to Fed's jumbo 50bps rate cut earlier in the week.

Meanwhile, China's decision to hold its benchmark lending rates steady—though a disappointment for some expecting a cut—has had little effect on the overall bullish sentiment.

In the currency markets, Yen is currently the worst performer this week, followed by Dollar and Loonie. On the other hand, Aussie is the top gainer, followed closely by Kiwi and Sterling. Euro and Swiss Franc are positioning in the middle.

Technically, it's important to highlight that key Dollar pairs like EUR/USD and USD/CHF are still trading within established near term ranges, suggesting that the recent market moves are more about risk appetite pushing up commodity currencies rather than a broad Dollar selloff in reaction to Fed's actions.

To confirm sustained bearish shift in Dollar, EUR/USD would need to decisively break above the 1.1200 resistance, ideally accompanied by extended record run in Gold through 2600 mark.

In Asia, at the time of writing, Nikkei is up 2.10%. Hong Kong HSI is up 1.11%. China Shanghai SSE is down -0.19%. Singapore Strait Times is down -0.38%. Japan 10-year JGB yield is up 0.0035 at 0.857. Overnight, DOW rose 1.26%. S&P 500 rose 1.70%. NASDAQ rose 2.51%. 10-year yield rose 0.055 to 3.740.

BoJ stands pat at 0.25%, sees gradual inflation rise and economic growth

BoJ left its uncollateralized overnight call rate unchanged at around 0.25% during today's meeting, as widely anticipated and decided by unanimously.

In the accompanying statement, BoJ maintained a positive outlook for the Japanese economy, projecting continued growth at a rate above its potential. The central bank expects "overseas economies will continue to grow moderately," further supporting Japan's economic expansion. Domestically, the "virtuous cycle from income to spending" will gradually intensify, aided by accommodating financial conditions.

On the inflation front, core CPI is forecast to rise through fiscal 2025. BoJ also noted that underlying inflation will "increase gradually" as output gap narrows and medium- to long-term inflation expectations firm up.

However, the central bank also outlined several risks to its outlook, including global economic developments, commodity prices, and the pace at which firms adjust wage and price setting.

Japan's CPI core rises to 2.8% in Aug, core-core up to 2.0%

Japan's core CPI, excluding fresh food, rose to 2.8% yoy in August, matching expectations and marking the fourth consecutive month of acceleration. This increase is up from 2.7% yoy in July and continues the upward trend from 2.2% yoy in April, keeping inflation above BoJ's 2% target since April 2022.

Core-core CPI, which strips out both fresh food and energy, also rose from 1.9% yoy to 2.0% yoy, highlighting broader inflationary pressures in Japan. Headline CPI, which includes all categories, increased from 2.8% yoy to 3.0% yoy.

Energy prices surged 12.0% yoy, while food prices increased by 2.9% yoy, and household durable goods saw a significant rise of 7.7% yoy. These numbers indicate persistent inflationary pressures across a wide range of goods and services.

UK Gfk consumer confidence plummets to -20 ahead of expected painful budget

UK GfK Consumer Confidence dropped sharply in September, falling from -13 to -20, marking the biggest decline since April 2022. The seven-point drop reflects growing concerns about the economic outlook and personal finances, with households bracing for a difficult budget next month.

Key forward-looking indicators worsened significantly. Expectations for the general economy over the next 12 months dropped by -12 points to -27, while personal finance expectations fell by -9 points to -3. The major purchase index, which gauges consumers' willingness to buy big-ticket items, also dropped -10 points to -23.

GfK noted, "Despite stable inflation and the prospect of further rate cuts, this is not encouraging news for the UK's new government." Neil Bellamy, Consumer Insights Director at GfK, linked the drop to concerns over Prime Minister Keir Starmer's warnings of a "painful" budget. Bellamy said, "Consumers are nervously awaiting the Budget decisions on Oct. 30 after the withdrawal of winter fuel payments and warnings of further difficult measures."

Looking ahead

Germany PPI and UK retail sales will be released in European session. Canada retial sales IPPI and RMPI will be released later in the day.

GBP/JPY Daily Outlook

Daily Pivots: (S1) 187.82; (P) 189.11; (R1) 190.77; More...

Intraday bias in GBP/JPY remains on the upside for the moment. Rise from 183.70 is seen as the third leg of the corrective pattern from 180.00. Further rally would be seen to 193.45 and possibly further to 61.8% retracement of 208.09 to 180.00 at 197.35. Nevertheless, break of 186.68 minor support will turn bias back to the downside for 183.70 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.

Economic Indicators Update

BoJ left its uncollateralized overnight call rate unchanged at around 0.25% during today's meeting, as widely anticipated and decided by unanimously.

In the accompanying statement, BoJ maintained a positive outlook for the Japanese economy, projecting continued growth at a rate above its potential. The central bank expects "overseas economies will continue to grow moderately," further supporting Japan’s economic expansion. Domestically, the "virtuous cycle from income to spending" will gradually intensify, aided by accommodating financial conditions.

On the inflation front, core CPI is forecast to rise through fiscal 2025. BoJ also noted that underlying inflation will "increase gradually" as output gap narrows and medium- to long-term inflation expectations firm up.

However, the central bank also outlined several risks to its outlook, including global economic developments, commodity prices, and the pace at which firms adjust wage and price setting.

Full BoJ statement here.