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Daily Pivots: (S1) 1.2639; (P) 1.2692; (R1) 1.2723; More...

USD/CAD is losing some upside momentum as seen in 4 hour MACD. But further rise is expected with 1.2583 minor support intact. Current rise from 1.2286 should target 1.2894/2947 resistance zone next. On the downside, break of 1.2583 minor support is needed to be the first sign of short term topping. Otherwise, near term outlook will stay mildly bullish in case of retreat.

In the bigger picture, medium term outlook is neutral for now. The pair drew support from 1.2061 cluster and rebounded. Yet, upside was limited below 38.2% retracement of 1.4667 to 1.2005 at 1.3022. On the upside, firm break of 1.3022 should affirm the case of medium term bullish reversal. However, break of 1.2286 will turn focus back to 1.2005 low again.

Daily Pivots: (S1) 0.7211; (P) 0.7223; (R1) 0.7240; More...

Intraday bias in AUD/USD remains on the downside at this point. Fall from 0.7555 is in progress for 0.7169 support first. Decisive break there will affirm the case that larger decline from 0.8006 is resuming. Next target is 0.7105 support for confirmation. On the upside, break of 0.7272 minor resistance will turn intraday bias neutral and bring consolidations first, before staging another fall.

In the bigger picture, with 0.6991 cluster support (38.2% retracement of 0.5506 to 0.8006 at 0.7051) intact, we're seeing price action from 0.8006 as a correction only. That is, up trend from 0.5506 low would resume after the correction completes. In that case, main focus will be 0.8135 key resistance (2018 high). Sustained break there will carry larger bullish implications. However, sustained break of 0.6991 will argue that the whole medium term trend has indeed reversed.

Daily Pivots: (S1) 114.69; (P) 114.93; (R1) 115.37; More...

Intraday bias in USD/JPY remains on the upside at this point. Current up trend from 102.58 should target 100% projection of 102.58 to 111.65 from 109.11 at 118.18 next. On the downside, break of 113.57 support is needed to indicate short term topping. Otherwise, outlook will stay bullish in case of retreat.

In the bigger picture, corrective decline from 118.65 (2016 high) should have completed at 101.18 already. Rise from the 102.58 is seen as the third leg of the up trend from 101.18. Next target is 118.65 high. This will now be the preferred case as long as 111.65 resistance turned support holds, even in case of deep pull back.

Daily Pivots: (S1) 0.9308; (P) 0.9327; (R1) 0.9351; More....

Intraday bias in USD/CHF remains on the upside for the moment. Current rise form 0.9084 is in progress for 0.9367 resistance. Break there will resume whole choppy rise from 0.8925 to 0.9471 key resistance. On the downside, break of 0.9248 support is needed to indicate near term topping. Otherwise, further rally will remain in favor in case of retreat.

In the bigger picture, the corrective structure of the rebound from 0.8925 argues that fall from 0.9471 is not complete yet. It could either be the second leg of pattern from 0.8756 (2021 low), or resuming larger down trend from 1.0237 (2018 high). We'd pay attention to the downside momentum and assess the odds later. But for now, medium term outlook will be neutral at best as long as 0.9471 resistance holds.

Daily Pivots: (S1) 1.3345; (P) 1.3377; (R1) 1.3411; More...

Intraday bias in GBP/USD remains on the downside for the moment. Current down trend from 1.4248 is in progress for 1.3164 fibonacci level next. On the upside, break of 1.3512 resistance is needed to indicate short term bottoming. Otherwise, outlook will stay bearish in case of recovery.

In the bigger picture, the structure of the fall from 1.4248 suggests that it's a correction to the up trend from 1.1409 (2020 low) only. While deeper fall cannot be ruled out yet, downside should be contained by 38.2% retracement of 1.1409 to 1.4248 at 1.3164, at least on first attempt, to bring rebound. On the upside, firm break of 1.4376 key resistance (2018 high) will add to the case of long term bullish reversal. However, sustained trading below 1.3164 will revive some medium term bearishness and target 61.8% retracement at 1.2493.

Daily Pivots: (S1) 1.1226; (P) 1.1250; (R1) 1.1275; More...

Intraday bias in EUR/USD remains on the downside despite some loss of downside momentum. Current down trend from 1.2348 should target 161.8% projection of 1.1908 to 1.1523 from 1.1691 at 1.1068 next. On the upside, break of 1.1373 resistance is needed to indicate short term bottoming. Otherwise, outlook will stay bearish in case of recovery.

In the bigger picture, there are various ways of interpreting the fall from 1.2348 (2021 high). It could be a correction to rise from 1.0635 (2020 low), the fourth leg of a sideway pattern from 1.0339 (2017 low), or resuming long term down trend. In any case, outlook will now stay bearish as long as 1.1703 support turned resistance holds. Sustained break of 61.8% retracement of 1.0635 to 1.2348 at 1.1289 would pave the way back to 1.0635.

New Zealand Dollar weakens in Asian session after RBNZ rate hike, and leads other commodity currencies lower. Dollar firms up mildly as it's ready to extend recent rally, except versus Yen for now. European majors are mixed, with Sterling have a mild upper hand against Euro and Swiss Franc. Gold is treading water below 1800 handle for now, while WTI crude oil is trying to regain 78 level.

Technically, the main focus will be on Dollar against European majors. While EUR/USD broke key support level around 1.13, there is no downside acceleration yet. GBP/USD's break of 1.3351 support also looks non-committal. We'd see if today's set of data and FOMC minutes could finally prompt more sustainable buying in the greenback against Europeans.

In Asia, at the time of writing, Nikkei is down -1.64%. Hong Kong HSI is down -0.06%. China Shanghai SSE is down -0.10%. Singapore Strait Times is up 0.15%. Japan 10-year JGB yield is up 0.0122 at 0.087. Overnight, DOW rose 0.55%. S&P 500 rose 0.17%. NASDAQ dropped -0.50%. 10-year yield jumped 0.042 to 1.667.

RBNZ hikes OCR to 0.75%, maintains hawkish bias

RBNZ raised the Official Cash Rate to by 25bps to 0.75% as expected. It also maintained a hawkish bias, noting that " further removal of monetary policy stimulus is expected over time given the medium term outlook for inflation and employment."

The central bank also said that despite recent nationwide lockdown, "underlying economic strength remains supported by aggregate household and business balance sheet strength, fiscal policy support, and strong export returns." Capacity pressured have "continued to tighten" with employment "above its sustainable level". A broad range of economic indicators highlight the economy "continues to perform above its current level".

Headline CPI is expected to be "above 5 percent in the near term" before returning towards 2% midpoint "over the next two years.

NZD/USD dips after RBNZ hike, staying mildly bearish

NZD/USD softens slightly after RBNZ rate hike and near term outlook stays mildly bearish with 0.7051 resistance intact. Deeper fall should be seen to 0.6858 support first. Break there will affirm the case that larger down trend from 0.7463 is resuming. Further decline should then be seen through 0.6804 support to 38.2% retracement of 0.5467 to 0.7463 at 0.6731 next.

Japan PMI manufacturing rose to 54.2, services rose to 52.1

Japan PMI Manufacturing rose to 54.2 in November, up from 53.2, but missed expectation of 54.5. PMI Services rose to 52.1, up from 50.7. PMI Composite rose to 52.5, up from 50.7.

Usamah Bhatti, Economist at IHS Markit, said:

"Flash PMI data indicated that activity at Japanese private sector businesses rose for the second month running in November. Growth in output quickened from October and was the quickest recorded since October 2018. By sector, service providers noted the sharpest rise in activity since September 2019, while manufacturers indicated the fastest rate of growth for six months.

"Firms across the Japanese private sector reported intensifying price pressures. Input prices across the private sector rose at the fastest pace for over 13 years with businesses attributing the rise to higher raw material, freight and staff costs amid shortages and deteriorating supplier performance.

"As vaccination rates rose and economic restrictions eased, Japanese private sector companies were strongly optimistic that business activity would rise in the year ahead. Positive sentiment was the strongest on record and stemmed from hopes that the end of the pandemic and lifting of international restrictions would provide a broad-based boost to activity."

Looking ahead

Germany Ifo business climate is the main feature in European session. Later in the day, the pre-holiday US calendar is very busy with Q3 GDP revision, jobless claims, goods trade balance, durable goods orders, personal income and spending, new home sales featured. Fed will also release FOMC minutes.

EUR/USD Daily Outlook

Daily Pivots: (S1) 1.1226; (P) 1.1250; (R1) 1.1275; More...

Intraday bias in EUR/USD remains on the downside despite some loss of downside momentum. Current down trend from 1.2348 should target 161.8% projection of 1.1908 to 1.1523 from 1.1691 at 1.1068 next. On the upside, break of 1.1373 resistance is needed to indicate short term bottoming. Otherwise, outlook will stay bearish in case of recovery.

In the bigger picture, there are various ways of interpreting the fall from 1.2348 (2021 high). It could be a correction to rise from 1.0635 (2020 low), the fourth leg of a sideway pattern from 1.0339 (2017 low), or resuming long term down trend. In any case, outlook will now stay bearish as long as 1.1703 support turned resistance holds. Sustained break of 61.8% retracement of 1.0635 to 1.2348 at 1.1289 would pave the way back to 1.0635.

Economic Indicators Update

Short-term Elliott wave view in Dollar Index suggests cycle from October 28 low is in progress as a 5 waves impulse Elliott Wave structure. Up from October 28 low, wave 1 ended at 94.3 and pullback in wave 2 ended at 93.82. Wave 3 is currently in progress with subdivision as another impulse in lesser degree. Up from wave 2, wave ((i)) ended at 94.62 and pullback in wave ((ii)) ended at 93.87. Index then resumes higher in wave ((iii)) to 96.24, and dips in wave ((iv)) ended at 95.5.

Expect the Index to extend higher 1 more leg before ending wave ((v)). This should complete wave 3 in higher degree. Afterwards, it should correct cycle from November 4 low in wave 4 in larger degree before the rally resumes. Near term, as far as pivot at 95.5 low stays intact, expect the Index to continue to see further upside to end wave 3. Later, expect larger degree wave 4 pullback to also find support in 3, 7, or 11 swing for further upside. Potential support area for wave 4 can be measured later once wave 3 completes at 23.6 – 38.2 Fibonacci retracement of wave 3.

Dollar Index 45 Minutes Elliott Wave Chart

Japan PMI Manufacturing rose to 54.2 in November, up from 53.2, but missed expectation of 54.5. PMI Services rose to 52.1, up from 50.7. PMI Composite rose to 52.5, up from 50.7.

Usamah Bhatti, Economist at IHS Markit, said:

"Flash PMI data indicated that activity at Japanese private sector businesses rose for the second month running in November. Growth in output quickened from October and was the quickest recorded since October 2018. By sector, service providers noted the sharpest rise in activity since September 2019, while manufacturers indicated the fastest rate of growth for six months.

"Firms across the Japanese private sector reported intensifying price pressures. Input prices across the private sector rose at the fastest pace for over 13 years with businesses attributing the rise to higher raw material, freight and staff costs amid shortages and deteriorating supplier performance.

"As vaccination rates rose and economic restrictions eased, Japanese private sector companies were strongly optimistic that business activity would rise in the year ahead. Positive sentiment was the strongest on record and stemmed from hopes that the end of the pandemic and lifting of international restrictions would provide a broad-based boost to activity."

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Key Highlights

• AUD/USD started a major decline from the 0.7550 resistance.
• A major bearish trend line is forming with resistance near 0.7275 on the 4-hours chart.
• The US Manufacturing PMI increased from 58.4 to 59.1 in Nov 2021 (Preliminary).
• The US GDP could grow 2.1% in Q3 2021 (Preliminary).

AUD/USD Technical Analysis

The Aussie Dollar started a major decline from well above 0.7500 against the US Dollar. AUD/USD broke the 0.7350 support to move into a bearish zone.

Looking at the 4-hours chart, the pair extended decline below the 0.7300 level. It even settled below the 0.7300 level, and the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

On the downside, an initial support is near the 0.7200 level. A downside break below 0.7220 may perhaps open the doors for more losses. The next major support sits at 0.7120, below which the pair could dive to 0.7000.

On the upside, the pair is facing hurdles near 0.7270. There is also a major bearish trend line forming with resistance near 0.7275 on the same chart.

The main resistance is forming near the 0.7300 level. A daily close above 0.7200 may perhaps open the doors for a decent increase. The next key stop for the bulls could be 0.7280.

Besides, EUR/USD extended decline below 1.1250, but it remained stable above 1.1200. GBP/USD also resumed decline and revisited the 1.3350 support.

Economic Releases

• German IFO Business Climate Index for Nov 2021 – Forecast 96.6, versus 97.7 previous.
• US Initial Jobless Claims - Forecast 260K, versus 268K previous.
• US Durable Goods Orders for Oct 2021 – Forecast +0.2% versus -0.3% previous.
• US Gross Domestic Product Q3 2021 (Preliminary) – Forecast 2.1% versus previous 2.0%.