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Daily Pivots: (S1) 1.6737; (P) 1.6780; (R1) 1.6821; More...

Focus stays on 1.6843 resistance in EUR/AUD. Decisive break there will resume the rebound from 1.6319 for retesting 1.7062 high next. On the downside, however, below 1.6666 minor support will turn bias back to the downside for 1.6449 support instead.

In the bigger picture, while 1.7062 is a medium term top, there is no clear sign of trend reversal as EUR/AUD continues to draw strong support from the medium term trend line. Break of 1.7062 will resume the larger up trend from 1.4281 (2022 low) to 1.7691 fibonacci level. Nevertheless, break of 1.6449 support will argue that deeper correction is underway to 38.2% retracement of 1.4281 to 1.7062 at 1.6000.

Daily Pivots: (S1) 0.9635; (P) 0.9648; (R1) 0.9659; More...

Intraday bias in EUR/CHF remains on the upside for the moment. Current rise from 0.9416 should target 0.9691 resistance. Firm break there will argue that whole decline from 1.0095 has completed, just ahead of 0.9407 support (2022 low). Nevertheless, break of 0.9595 support will indicate short term topping, and turn bias back to the downside for deeper pull back.

In the bigger picture, fall from 1.0095 (2023 high) might have completed at 0.9416, just ahead of 0.9407 support (2022 low). Sustained break of 0.9691 cluster resistance (38.2% retracement of 1.0095 to 0.9416 at 0.9675) will pave the way to 61.8% retracement at 0.9836 and above. However, rejection by 0.9691 will maintain medium term bearishness for another test on 0.9407 at least.

The US CPI is going to be an important event today, where investors will define next important move for the markets, as it may become clearer if FED really did not do enough to fight inflation, or if maybe Powell will stay on hold after all. Expectations are 3.3% (y/y) down from 3.7%, and one of the reasons for a drop in inflation figures can certainly be crude oil prices that came down in the second part of October. So if expectations are met, the USD can eihter come down or stay sideways, but if data disappoints then DXY will move sharply higher with US yeilds while stocks can make a pullback which is technically expected as talked about in our video below.

Looking at the DXY, index has only three legs down from the highs, and if price can move beyond 106.30 and finish the day above that level, then bulls can be back for 108. On the other-hand, drop and break below 104.85 will be bearish for DXY.

https://www.youtube.com/watch?v=nt0DObj71EU&t=165s

Platinum (PL) may have ended the correction to the cycle from 9.1.2022 low and in the early stage of turning higher. If the pivot on September 2022 low at 796.8) breaks, it suggests a bigger correction against March 2020 low within wave (II) which is not our primary view at the moment. In the higher time frame, the metal is in a bullish grand super cycle move higher against March 2020 low.

Platinum (PL) Monthly Elliott Wave Chart

Monthly chart of Platinum above shows that the metal ended wave ((II)) at 562 during the Covid-19 crash. It has since turned higher in wave ((III)). Up from wave ((II)), the rally is in progress as an impulse. Wave (I) of ((III)) ended at 1348.2 while dips in wave (II) of ((III)) ended at 796.8. The metal has since turned higher in wave (III). Up from wave (II), wave ((1)) ended at 1148.9 and dips in wave ((2)) might have ended at 843.1. The metal can be in the early stage of the next leg higher.

Platinum (PL) Daily Elliott Wave Chart

Daily chart of Platinum above shows that the metal ended wave (II) at 796.8 and turned higher in wave (III). Up from wave (II), wave ((1)) ended at 1148.9 and dips in wave ((2)) ended at 843.1. Expect the metal to extend higher while it stays above 796.8 in the first degree. If the metal breaks below 796.8, then it will do a double correction against March 2020 low at 562.

Markets

Talk about a slow, uninspired start of the week. Core bonds traded mixed with USTs slightly outperforming German bunds in technical trading. US rates eased between -0.8 and 3 bps. German yields rose 1.5 bps at the front while shedding 1.8 bps at the longest tenor. The dollar and euro settled an intraday fight to the advantage of the former. EUR/USD eked out a small gain towards but below 1.07. This was partially thanks to a sudden yet limited drop in USD/JPY from a new YtD high at 151.91 to a low of 151.34 amid option expiries. The pair nevertheless finished with a fresh year’s high at 151.72. Sterling rallied against both the euro and the dollar. GBP/USD rose from 1.221 towards 1.228. EUR/GBP eased from the recent highs just south of 0.875 to 0.871. We’ll leave it in the middle whether that was on the return of former PM and architect of the 2016 Brexit referendum David Cameron. (For sure it wasn’t.) Risk sentiment probably helped though. European stocks rose about 0.8%. The EuroStoxx50 confirmed the break above 4200. US indices opened negative but pared losses as the session evolved. Net daily changes ranged between -0.22% (Nasdaq) to +0.16% (Dow Jones). Commodities including oil (see below) and most metals rose.

News flow hasn’t really picked up in Asian dealings this morning. We fear it’s going to be a drawn out countdown to the US October inflation numbers. And even their significance for daily trading may be a bit overstated because of the conflicting signals they’re likely to carry. The headline figure is expected to drop from 3.7% to 3.3% but mainly thanks to base effects. These disappear for the remainder of the year, however, creating possibilities of CPI reaccelerating. The image for core inflation is more nuanced. Disinflation likely stalled in October with the y/y coming in at 4.1%. In addition, the monthly readings recently creeped higher towards an annualized inflation pace of 3-4% instead of the Fed’s desired 2%. FOMC members in our view are therefore right to retain a hawkish bias for now. There’s an avalanche of speeches, from policymakers at the ECB and BoE too, scattered across the day. They make a clean interpretation of the market’s CPI reaction additionally tricky. Either way we expect the recent correction low in US yields (4.80% in the 2-y and 4.48% in the 10-y) to serve as a strong supports. The dollar finds first support at EUR/USD 1.0764 (38.2% EUR/USD recovery on the Jul-Oct decline). The UK labour market report – still incomplete with the original (un)employment data series being reworked – lifts sterling this morning.  Preliminary October employment came in at +33k vs a 17k drop expected while wage growth eased less than anticipated. We still think tomorrow’s inflation numbers will be the real deal for the pound though. EUR/GBP is nearing the 0.87 big figure.

News & Views

OPEC in its November monthly report stressed that global oil market fundamentals remain strong, calling the recent negative sentiment ‘exaggerated’. The demand side includes strong US growth and heathy oil demand/imports from China and India. OPEC even revised up its forecast for global 2023 oil demand growth to 2.5 mb/d. On the supply side the report mentions strong non-OPEC supply mainly driven by US production. At the same time, overall OPEC-11 production in October remained well below the agreed levels. Recent increase in shipments from the Middle East mirrors normal seasonal patterns. OPEC also said that oil inventories remain well below average levels. The report attributes the recent trend lower in oil prices to financial market speculators ‘as they have sharply reduced their net long positions over the month of October’. The report concludes that commitments to reduce production will contribute significantly to achieve and sustain global oil market stability. Brent oil yesterday rebounded from the $80.5 p/b area to close near $82.5 p/b.

Inflation in Argentina last month accelerated to 8.3% M/M bringing annual inflation to 142.7% Y/Y, the fastest pace in more than three decades. Inflation will be one of the biggest challenges for the new president that will be elected in a run-off vote on November 19 between current Economy Minister Sergio Massa and outsider Javier Milei. In a survey of the central bank published on Monday, economists even further upwardly revised their inflation forecasts to 185% at the end of this year. Economic activity is forecast to contract 2.0% this year and 2.4% next year.

Daily Pivots: (S1) 1.0674; (P) 1.0690; (R1) 1.0715; More...

Intraday bias in EUR/USD stays neutral for the moment. On the downside, break of 1.0655 minor support, and sustained trading below 55 4H EMA (now at 1.0670), will argue that the rebound from 1.0447 has completed with three waves up to 1.0755. That came after rejection by 1.0764 cluster resistance (38.2% retracement of 1.1274 to 1.0447 at 1.0763). In this case, intraday bias will be turned back to the downside for 1.0447/0515 support zone. Nevertheless, strong bounce from current level, followed by decisive break of 1.0764, will bring stronger rally to 61.8% retracement at 1.0958 next.

In the bigger picture, price actions from 1.1274 are viewed as a corrective pattern to rise from 0.9534 (2022 low). Rise from 1.0447 is tentatively seen as the second leg. Hence while further rally could be seen, upside should be limited by 1.1274 to bring the third leg of the pattern. However, break of 1.0447 will resume the fall to 61.8% retracement of 0.9543 to 1.1274 at 1.0199.

Daily Pivots: (S1) 1.2234; (P) 1.2258; (R1) 1.2302; More...

While GBP/USD's recovery from 1.2185 is extending, upside is limited below 1.2307 resistance. Intraday bias stays neutral first. Corrective rebound from 1.2036 should have completed with three waves up to 1.2426. Below 1.2185 will bring deeper fall to retest 1.2036/68 support zone next. Firm break there will resume larger down trend from 1.3141. However, firm break of 1.2307 will dampen this view and bring stronger rise back to 1.2426 resistance.

In the bigger picture, rejection by 38.2% retracement of 1.3141 to 1.2036 at 1.2458, suggests fall from 1.3141 is still in progress. Sustained break of 38.2% retracement of 1.0351 (2022 low) to 1.3141 at 1.2075 will bring deeper decline to 61.8% retracement at 1.1417, even just as a corrective move.

Daily Pivots: (S1) 0.8998; (P) 0.9025; (R1) 0.9044; More....

Intraday bias in USD/CHF remains neutral and outlook is unchanged. On the downside, below 0.8952 will target a test on 0.8886 support first. Break there will resume whole decline from 0.9243 to 0.8815 fibonacci level. However, break of 0.9111 will resume the rebound from 0.8886 instead, and target 0.9243 resistance.

In the bigger picture, outlook is mixed up by the deeper than expected pull back from 0.9243. Yet there was no follow through selling after hitting 0.8886. On the upside, break of 0.9243 resistance will revive the case of medium term bottoming at 0.8851, and turn outlook bullish. However, sustained break of 61.8% retracement of 0.8551 to 0.9243 at 0.8815 will argue that larger decline from 1.0146 is ready to resume through 0.8551 low.

Daily Pivots: (S1) 151.31; (P) 151.61; (R1) 152.02; More...

Intraday bias in USD/JPY is turned neutral again with 4H MACD crossed below signal line. On the upside, decisive break of 151.93 resistance will confirm resumption of long term up trend. Next target will be 157.69 projection level. Meanwhile, near term outlook will stay bullish as long as 149.17 support holds, even in case of deep retreat.

In the bigger picture, immediate focus is now on 151.93 resistance (2022 high). Rejection by 151.93, followed by sustained break of 145.06 resistance turned support will argue that rise from 127.20 has completed, and turn outlook bearish for 137.22 support and below. However, sustained break of 151.93 will confirm resumption of long term up trend. Next target will be 61.8% projection of 102.58 (2021 low) to 151.93 from 127.20 at 157.69.

Daily Pivots: (S1) 1.3779; (P) 1.3805; (R1) 1.3834; More...

Intraday bias in USD/CAD is turned neutral with 4H MACD crossed below signal line. While another rise might be seen, strong resistance could emerge from 1.3897 to limit upside on first attempt. On the downside, break of 1.3745 will turn bias to the downside to extend the corrective pattern from 1.3897 with another falling leg. In this case, strong support should be seen from 38.2% retracement of 1.3091 to 1.3897 at 1.3589 to bring rebound.

In the bigger picture, corrective pattern from 1.3976 (2022 high) should have completed with three waves down to 1.3091. Decisive break of 1.3976 high will confirm resumption of up trend from 1.2005 (2021 low). Next target is 61.8% projection of 1.2401 to 1.3976 from 1.3091 at 1.4064. This will remain the favored case as long as 1.3378 support holds.