Sample Category Title

Daily Pivots: (S1) 0.9540; (P) 0.9555; (R1) 0.9563; More...

Intraday bias in EUR/CHF stays neutral at this point. With 0.9601 resistance intact, larger down trend is still in favor to continue. On the downside, break of 0.9513 support will confirm this bearish case and target 0.9407 low. Nevertheless, break of 0.9601 resistance will turn bias back to the upside for stronger rebound to 0.9646 resistance and above.

In the bigger picture, medium term outlook is staying bearish as the pair is capped well below falling 55 W EMA (now at 0.9839). Down trend from 1.2004 (2018 high) is in favor to continue. Sustained break of 0.9407 will target 61.8% projection of 1.1149 to 0.9407 from 1.0095 at 0.9018. For now, this will remain the favored case as long as 0.9670 support turned resistance holds, in case of strong rebound.

Daily Pivots: (S1) 0.8565; (P) 0.8583; (R1) 0.8595; More...

Intraday bias in EUR/GBP stays neutral for the moment. On the upside, above 0.8609 will resume the rebound from 0.8491. But near term outlook will stay bearish as long as 0.8667 resistance holds. On the downside, below 0.8522 will bring retest of 0.8491 low.

In the bigger picture, the down trend from 0.9267 (2022 high) is seen as part of the long term range pattern from 0.9499 (2020 high). Further decline is in favor as long as 0.8667 resistance holds. Break of 0.8491 will resume the fall towards 0.8201 (2022 low).

Daily Pivots: (S1) 1.6721; (P) 1.6786; (R1) 1.6840; More...

Range trading continues in EUR/AUD and intraday bias stays neutral for the moment. On the upside, firm break of 1.6887 resistance should confirm that correction from 1.7062 has completed at 1.6647. Further rally should be seen through 1.7062 to 1.7377 projection level. On the downside, break of 1.6647 will extend the correction lower instead.

In the bigger picture, the rise from 1.4281 (2022 low) is in progress. Next target is 100% projection of 1.5254 to 1.6785 from 1.5846 at 1.7377. For now, outlook will stay bullish as long as 1.5846 support holds, even in case of deep pull back.

Daily Pivots: (S1) 157.10; (P) 157.81; (R1) 158.26; More....

Intraday bias in EUR/JPY stays neutral as range trading continues. On the downside, break of 156.85 will turn bias back to the downside deeper fall towards 151.39 support. On the upside, break of 159.75 will resume larger up trend instead.

In the bigger picture, rise from 114.42 (2020 low) is in progress. Next target is 100% projection of 124.37 to 148.38 from 139.05 at 163.06. Sustained break there will pave the way to retest long term resistance at 169.96. This will remain the favored case as long as 151.39 support holds, even in case of deep pull back.

Daily Pivots: (S1) 183.12; (P) 183.95; (R1) 184.51; More...

Intraday bias in GBP/JPY is mildly on the downside with breach of 183.34. Correction from 186.75 is extend lower to 55 D EMA (now at 182.22). Nevertheless, break of 185.76 resistance will turn bias back to the upside for retesting 186.75 high instead.

In the bigger picture, up trend from 123.94 (2020 low) is in progress. Next target is 195.86 (2015 high). This will remain the favored case as long as 176.29 support holds, even in case of deeper pull back.

GBPJPY is trading sideways today as the recent strong bullish pressure appears to have abated somewhat. A short-term bearish trend channel has formed as the bears are preparing to test the support set by the busy 180.81-183.09 region, hoping that any pullback achieved might not prove short-lived like the late-July 2023 price action.

The bears would clearly enjoy some supportive messages from the momentum indicators. However, only the stochastic oscillator appears to be favouring their intentions. It has managed to fall below its moving average (MA) and it is heading towards its oversold territory. On the other hand, the Average Directional Movement Index (ADX) remains uninterested in the current downleg as it has just dived below its 25-threshold, and thus signaling a range-trading market. Similarly, the RSI is trading almost at its 50-midpoint, revealing a degree of hesitation from market participants.

Should the bears feel confident, they would try to break the busy 180.81-183.09 range populated by the June 22, 2023 high, the April 9, 2001 high and the 50-day simple moving average (SMA). They could then have the chance of testing the 100-day SMA at 178.62 before setting their eyes on the more important 174.50-174.84 range.

On the flip side, the bulls are probably taking a breather and treating the current move as a short-term correction. They are keen on keeping GBPJPY above the 180.81 level and gradually stage a move towards the February 26, 2015 high at 185.02. They could then have a go at making a new 2023 high.

To sum up, despite the mixed momentum indicators, the GBPJPY bears are trying to recover part of their significant losses, potentially aiming for a break below the 180.81 level.

Short term Elliott Wave view suggests the EURUSD is correcting cycle from 9.28.2022 low in a zigzag structure. Down from 9.28.2022 high, wave A ended at 1.091 and wave B rally ended at 1.1065. Pair then resumed lower in wave C which subdivides into a 5 waves structure. The 1 hour chart below shows wave ((i)) ended at 1.0765 and wave ((ii)) ended at 1.0946 as a zigzag in lesser degree. Up from wave ((i)), wave (a) ended at 1.0841 and pullback in wave (b) ended at 1.0765. Final leg higher wave (c) ended at 1.0946 which completed wave ((ii)).

Pair has resumed lower in wave ((iii)) as a 5 waves impulse. Down from wave ((ii)), wave (i) ended at 1.0827 and rally in wave (ii) ended at 1.088. Pair resumed lower in wave (iii) towards 1.0685. Expect wave (iv) rally to fail in 3, 7, or 11 swing for another leg lower wave (v) to complete wave ((iii)). Afterwards, it should correct in wave ((iv)) before turning lower again. Near term, as far as pivot at 1.0947 high stays intact, expect rally to fail in 3, 7, or 11 swing for further downside.

EURUSD 60 Minutes Elliott Wave Chart

EURUSD Elliott Wave Video

https://www.youtube.com/watch?v=RcMzOWLpZ-4

Markets

Yesterday was risk-off in every sense. Core bonds were up, equities down and the only competitor the dollar had on FX markets was the Japanese yen. Weakening global growth prospects has been the narrative all week. Fewer than expected weekly jobless claims in the US weren’t going to change that, even as it underscored the country as being something of an outlier for the time being. US yields shed between 1.3 and 6.9 bps. The front end outperformed. More Fed governors argued for a pause in September (eg. Williams) while others (eg. Logan this morning) added that more tightening may be necessary afterwards. Rates in Germany eased 2.8-4.4 bps across the curve. Stock markets lost about 0.4% in Europe. Tech was under pressure in the US as a Chinese ban weighed on Apple. The Nasdaq lost 0.9%. EUR/USD slipped on general dollar strength. The pair moved lower within the recently formed downward trend channel to close just south of 1.07. It’s the first time since early June it did so. DXY moved north of 105, the strongest level since March of this year. USD/JPY eased a few ticks to 147.3. Sterling fell against most peers but not the euro. EUR/GBP did test the 0.86 big figure before returning to opening levels of around 0.857. Gilts hugely outperformed Treasuries and Bunds after the Bank of England’s survey showed UK companies expect to raise prices for the year ahead at the slowest pace since November 2021. Company CPI expectations fell as well. UK money markets downscaled BoE tightening bets with less than two additional 25 bps priced in now.

The risk aversion yesterday filtered through to Asia. Equities slip with Japan underperforming. China’s yuan is grabbing attention. USD/CNY yesterday already closed at a new multi-year low and is extending gains this morning to 7.344, the highest since end 2007. The PBOC cut the fixing to the lowest in two months, at least suggesting it turned more tolerant towards the yuan. The next high-profile reference stands at 7.42 – the 61.8% USD/CNY recovery on the 2005-2014 decline. Japan is less comfortable with its currency declining. Finance minister Suzuki issued another verbal but unconvincing warning. USD/JPY dropped to 146.59 before paring losses to 147.2 again even as the greenback is catching a breather this morning. EUR/USD moves north of 1.07 with first resistance popping up at 1.0766. Core bonds gain ground. Current market dynamics could remain in place today. Risk sentiment turned for the better in a shift at the end of a gloomy week defined by rising oil prices and (rightly so) building expectations for higher rates for longer. The recent decline in European stocks brought the likes of the EuroStoxx50 towards important support (4200) support areas, which seem to be working their magic.

News and views

At a press conference yesterday, National Bank of Poland governor Glapinski (evidently) defended Wednesday’s surprise decision to cut the policy rate by 75 bps to 6.0%. August Polish inflation still printed at 10.1% Y/Y. However, according to Glapinski’s assessment, the rate cut was justified as Polish inflation was basically flat over the previous five months. He sees the condition of single digit inflation to be easily met in September (slightly above 8.5%). Recessionary trends in EMU will continue to curb inflation in Poland. The NBP governor expects inflation to ease to 6-7% by the end of the year and to fall further to 3.5% next year of in 2025. Glapinski also saw no inflationary impulse from the government budget. With respect to the zloty, he assessed that a 2.0% setback in the currency wouldn’t have a material impact in inflation and indicated that the currency might rebound after the election. The NBP currently has no intention to intervene in the FX market. He also formally rejected that the decision was politically inspired by the 15 October Parliamentary election. In a steepening move, the Polish to 3-y government bond yields dropped another 8 bps. The 10-y yield added 5 bps. The zloty sell-off continued as EUR/PLN closed at 4.62 up from 4.5675 on Wednesday evening and 4.4925 on Tuesday. Elsewhere in the region, Czech Central Bank Deputy governor Zamrazilova in an interview with newspaper Pravo indicated that the Czech National Bank is in no hurry to cut rates. The debate on the timing of a future rate cut is ongoing. For now it’s not clear whether the slowdown in inflation is caused by fading external shock or cooling domestic demand. A strong labour market in this respect still has the potential to support/revive the latter. Czech inflation might return to target next spring. A planned VAT change remains a source of uncertainty. Due to the fall-out from the NBP policy decision the Czech krona over the previous days dropped from EUR/CZK 24.19 on Tuesday evening to a close near 24.36 yesterday.

Daily Pivots: (S1) 1.3648; (P) 1.3671; (R1) 1.3711; More....

Intraday bias in USD/CAD stays on the upside for the moment. Further rally should be seen to retest 1.3976 high. On the downside, 1.3621 minor support will turn intraday bias neutral first. But outlook will stay bullish as long as 1.3488 support holds, in case of retreat.

In the bigger picture, price actions from 1.3976 are viewed as a corrective pattern only. Upon completion, rise from 1.2005 (2021 low) would resume through 1.3976. Next target is 61.8% projection of 1.2005 to 1.3976 from 1.3091 at 1.4309. For now, this will remain the favored case as long as 55 D EMA (now at 1.3436) holds.

Daily Pivots: (S1) 0.6360; (P) 0.6377; (R1) 0.6393; More...

Intraday bias in AUD/USD is turned neutral first with current recovery. But outlook stays bearish as long as 0.6520 resistance holds. Below 0.6356 will resume larger down. Next target is 100% projection of 0.7156 to 0.6457 from 0.6894 at 0.6195.

In the bigger picture, current development argues that the down trend from 0.8006 (2021 high) is still in progress. Decisive break of 0.6169 will target 61.8% projection of 0.8006 to 0.6169 to 0.7156 at 0.6021. This will now remain the favored case as long as 0.6894, in case of strong rebound.