Sample Category Title

Daily Pivots: (S1) 1.1052; (P) 1.1143; (R1) 1.1260; More...

Intraday bias in GBP/USD remains on the upside as rebound from 1.0351 is in progress. Further rally would be seen to 61.8% retracement of 1.2292 to 1.0351 at 1.1551. On the downside, break of 1.0760 minor support will indicate that the rebound is over, and bring retest of 1.0351 low.

In the bigger picture, fall from 1.4248 (2018 high) is resuming long term down trend from 2.1161 (2007 high). Next target is 100% projection of 2.1161 to 1.3503 from 1.7190 at 0.9532. There is no scope of a medium term rebound as long as 1.1759 support turned resistance holds.

Daily Pivots: (S1) 0.9779; (P) 0.9828; (R1) 0.9918; More...

USD/CHF is staying in consolidation from 0.9964 and intraday bias remains neutral first. On the upside, above 0.9964 will resume the rally from 0.9369 to retest 1.0063 high. On the downside, break of 0.9694 support will extend the corrective pattern from 1.0063 with another falling leg, towards 0.9478 support first.

In the bigger picture, current development suggests that up trend from 0.8756 (2021 low) is still in progress. Sustained break of 1.0063 will target 100% projection of 0.9149 to 1.0063 from 0.9369 at 1.0283, and then 1.0342 (2016 high). For now, this will remain the favored case as long as 0.9369 support holds, even in case of deep pull back.

Daily Pivots: (S1) 0.6352; (P) 0.6438; (R1) 0.6484; More...

Intraday bias in AUD/USD remains neutral for the moment. Consolidation from 0.6362 should extend, and another recovery cannot be ruled out. But upside should be limited well below 0.6698 support turned resistance. Break of 0.6362 will resume larger down trend to 100% projection of 0.7660 to 0.6680 from 0.7135 at 0.6155.

In the bigger picture, down trend form 0.8006 (2021 high) is expected to continue as long as 0.7135 resistance holds. With 61.8% retracement of 0.5506 (2020 low) to 0.8006 at 0.6461 firmly taken out, next target is 0.5506 low. Medium term momentum will now be closely monitored to gauge the chance of break of 0.5506.

Daily Pivots: (S1) 1.3713; (P) 1.3776; (R1) 1.3895; More...

Intraday bias in USD/CAD stays on the upside at this point. Current up trend should target 161.8% projection of 1.2005 to 1.2947 from 1.2401 at 1.3925. Firm break there will target 200% projection at 1.4285. On the downside, break of 1.3601 minor support is needed to indicate short term topping. Otherwise, outlook will stay bullish in case of retreat.

In the bigger picture, up trend from 1.2005 (2021 low) is still in progress. Based on current impulsive momentum, it could be resuming long term up trend from 0.9056 (2007 low). Whether it is or it isn't, retest of 1.4689 (2016 high) should be seen next. This will now remain the favored case as long as 1.3222 resistance turned support holds.

Daily Pivots: (S1) 0.8741; (P) 0.8796; (R1) 0.8838; More...

Intraday bias in EUR/GBP stays neutral with focus on 0.8720 resistance turned support. Firm break of 0.8720 will argue that whole rise from 0.8201 has completed in three-wave corrective pattern, and target 55 day EMA (now at 0.8636) first. Strong rebound from current level, will retain near term bullishness. Break of 0.9065 minor resistance will bring retest of 0.9267.

In the bigger picture, as long as 0.8720 resistance turned support holds, rise from 0.8201 is seen as resuming larger up trend from 0.6935 (2015 low). Break of 0.9499 (2020 high) should be seen at a later stage. However, firm break of 0.8720 will argue that sideway pattern from 0.9499 is extending with another falling leg instead.

Daily Pivots: (S1) 1.5122; (P) 1.5230; (R1) 1.5424; More...

Intraday bias in EUR/AUD stays on the upside for the moment. Rise from 1.4281 should target 100% projection of 1.4281 to 1.4965 from 1.4716 at 1.5400, which is close to 1.5396 key resistance. Firm break there will carry larger bullish implication. Next target is 161.8% projection at 1.5823. On the downside, below 1.5132 minor support will turn intraday bias neutral first.

In the bigger picture, current development raises the chance of medium term bottoming at at 1.4281, on bullish convergence condition in daily MACD. Firm break of 1.5396 will bring stronger rally back to 1.6434 key resistance next. Nevertheless, rejection by 1.5396 will maintain medium term bearishness for another fall through 1.4281 at a later stage.

Daily Pivots: (S1) 0.9589; (P) 0.9636; (R1) 0.9721; More....

Intraday bias in EUR/CHF stays neutral first with focus on 0.9712 resistance. Decisive break there will argue that fall from 0.9864 has completed totally at 0.9407, and bring stronger rally back to this résistance. Further break there will carry larger bullish implication. Nevertheless, break of 0.9548 minor support will retain near term bearishness, and bring retest of 0.9407 low first.

In the bigger picture, as long as 0.9864 resistance holds, long term down trend from 1.2004 (2008 high) is expected to continue. Next target is 138.2% projection of 1.2004 to 1.0505 to 1.1149 at 0.9033. However, firm break of 0.9864 will indicate medium term bottoming, on bullish convergence condition in daily MACD. Stronger rally would then be seen back to 55 week EMA (now at 1.0188).

Daily Pivots: (S1) 141.03; (P) 141.66; (R1) 142.53; More....

Intraday bias in EUR/JPY stays neutral first, with focus on 142.28 resistance. Firm break there will indicate that the pull back from 145.62 has completed, and bring stronger rally to retest this high. On the downside, though, break of 140.38 minor support will turn bias back to the downside, to resume the fall from 145.62 through 137.32 support.

In the bigger picture, as long as 133.38 support holds, the up trend from 114.42 (2020 low) could still extend through 145.62 high. In that case, next target is 149.76 (2015 high). However, sustained break of 133.38 will be a sign of medium term bearish reversal and bring deeper fall to 124.37 support first.

Daily Pivots: (S1) 159.91; (P) 161.05; (R1) 162.65; More...

Intraday bias in GBP/JPY remains mildly on the upside as rebound from 148.93 extends higher. Further rally should be seen to retest 169.10 high. Strong resistance could be seen there to limit upside, at least on first attempt. On the downside, below 159.41 minor support will turn intraday bias neutral first.

In the bigger picture, strong support from 38.2% retracement of 123.94 to 169.10 at 151.84 suggests that price actions from 169.10 are developing into a corrective pattern only. That is, rise from 123.94 (2020 low) should resume at a later stage. This will now remain the favored case as long as 148.93 support holds.

Sterling strengthens entering into European session, on rumors that UK Prime Minister Liz Truss to preparing to do a U-turn on tax and spending cuts. The talks came after Truss faced heavy scrutiny from Tory rebellions at the Conservative Party Conference. Markets are steady elsewhere, though. Traders are holding their bets for now, and await RBA and RBNZ rate hikes, as well as US heavy weight data in ISM and NFP later in the week.

Technically, one immediate focus in EUR/GBP's reaction to 0.8720 resistance turned support. Sustained break there will argue that rise from 0.8201 has completed at 0.9267 as a three-wave move. That would in turn argue that long term sideway pattern is extending with another falling leg. Deeper decline would be see to 55 day EMA (now at 0.8636) and below. Such development, if happens, would provide support the to Pound against other currencies.

In Asia, Nikkei closed up 0.68%. Hong Kong HSI is down -1.27%. Singapore Strait Times is down -0.39%. Japan 10-year JGB yield is down -0.0091 at 0.243.

BoJ: Upside risks of inflation to be examined humbly and without any preconceptions

In the summary of opinions of BoJ's September 21-22 meeting, it's noted that risks of "consumer prices deviating significantly upward from the baseline scenario, including the impact of foreign exchange rates, needs to be examined humbly and without any preconceptions."

But while a "certain degree of upside risk to prices" exists, there is a "long way to go" to achieve 2% inflation target in a "sustainable and stable manner". Output gap has been "negative", unemployment rate and active active job openings-to-applicants ratio "have not returned to pre-pandemic levels". Surge in energy and raw material prices has brought about an "outflow of income" from Japan. It is "appropriate" to continue with the current monetary easing.

Regarding exchange rate, one opinion noted that " further depreciation of the yen is partly due to differences in the direction of monetary policy between Japan and other economies.. the Bank needs to carefully explain the significance of continuing with the current monetary easing."

Japan business outlook deteriorated in Q3

Japan Tankan large manufacturing index dropped from 9 to 8, below expectation of 11. That's the third straight quarter of deterioration. Non-manufacturing index improve slightly from 13 to 14, above expectation of 13, and rise for the second straight quarter.

Large manufacturing outlook dropped from 10 to 9, below expectation of 11. Non-manufacturing outlook also deteriorated from 13 to 11, below expectation of 15.

Nevertheless, large companies are expected to increase capital expenditure by 21.5% in the current fiscal year ending March 2023, above expectation of 18.8%.

Meanwhile, companies expect inflation to hit 2.6% a year from now, and 2.1% three years ahead. Five years ahead inflation is also projected at 2.0%, highest since data became available in 2014.

Japan PMI manufacturing finalized at 50.8, weakness even turned worse

Japan PMI Manufacturing was finalized at 50.8 in September, down from August's 51.5. S&P Global said high inflation and subdued global market conditions weight on order books. Output fell at sharpest pace in a year, while input buying reduced. Weak yen drove inflationary pressures higher.

Joe Hayes,, Senior Economist at S&P Global Market Intelligence, said: "Weakness in Japan's manufacturing sector persisted in September and even turned worse. New orders fell at their sharpest rate in two years – high inflation is eroding client purchasing power, while slowing global economic growth is hurting exports. Weakness in the yen is doing little to bolster export demand either and instead is pushing imported inflation up drastically and drove domestic price pressures up even further."

RBA and RBNZ to hike 50bps, US to release ISMs and NFP

Both RBA and RBNZ are expected to continue with tightening this week. RBA is expected to raise the cash rate by 50bps to 2.85%. Interest rate would then be at least in neutral region, if not restrictive. RBA might reinforce the signal that tightening pace would start to slow. RBNZ is also expected to hike by 50bps to 3.50%. Governor Adrian Orr has indicate that the tightening cycle is mature. Hence, there could be signals from RBNZ that the pace is going to slow ahead.

Other central bank activities include release of BoJ summary of opinions and ECB meeting accounts. Economic data events are also jam-packed, with biggest highlight in US ISMs and non-farm payroll employment.

Here are some highlights for the week:

• Monday: BoJ summary of opinions, Japan Tankan survey, PMI manufacturing final; Swiss CPI, PMI manufacturing; Eurozone PMI manufacturing final; UK PMI manufacturing final; Canada PMI manufacturing; US PMI manufacturing final, ISM manufacturing, construction spending.
• Tuesday: New Zealand NZIER business confidence; Australia AiG manufacturing, building approvals, RBA rate decision; Japan Tokyo CPI core, monetary base; Eurozone PPI; US factory orders.
• Wednesday: Australia retail sales; RBNZ rate decision; Germany trade balance; France industrial production; Eurozone PMI services final; UK PMI services final; Canada building permits, trade balance; US ADP employment, PMI services final, ISM services.
• Thursday: Australia AiG construction, trade balance; Germany factory orders; UK PMI construction; Eurozone retail sales, ECB meeting accounts; Canada Ivey PMI; US jobless claims.
• Friday: Japan average cash earnings, households spending, leading indicators; Germany import prices, industrial production, retail sales; France trade balance; Swiss foreign currency reserves; Italy retail sales; Canada employment; US non-farm payroll employment.

GBP/JPY Daily Outlook

Daily Pivots: (S1) 159.91; (P) 161.05; (R1) 162.65; More...

Intraday bias in GBP/JPY remains mildly on the upside as rebound from 148.93 extends higher. Further rally should be seen to retest 169.10 high. Strong resistance could be seen there to limit upside, at least on first attempt. On the downside, below 159.41 minor support will turn intraday bias neutral first.

In the bigger picture, strong support from 38.2% retracement of 123.94 to 169.10 at 151.84 suggests that price actions from 169.10 are developing into a corrective pattern only. That is, rise from 123.94 (2020 low) should resume at a later stage. This will now remain the favored case as long as 148.93 support holds.

Economic Indicators Update