USD/JPY breached 114.69 resistance to 114.96 last week, but quickly retreated. Initial bias is mildly on the downside this week for 112.71 structural support. Firm break there will bring deeper correction bask towards 111.65 resistance turned support. On the upside, break of 114.96 is now needed to confirm up trend resumption. Otherwise, outlook will be neutral for more corrective trading first.

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.

In the long term picture, the rise from 75.56 (2011 low) long term bottom to 125.85 (2015 high) is viewed as an impulsive move, no change in this view. Price actions from 125.85 are seen as a corrective pattern which could still extend. In case of deeper fall, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77. Up trend from 75.56 is expected to resume at a later stage for above 135.20/147.68 resistance zone.

GBP/USD stayed in consolidation above 1.3351 last week and outlook is unchanged. Initial bias remains neutral this week first. In case of another recovery, upside should be limited below 1.3606 resistance. On the downside, break of 1.3351 will extend the decline from 1.4248 to 1.3164 fibonacci level next.

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.

In the longer term picture, a long term bottom should be in place at 1.1409, on bullish convergence condition in monthly MACD. Rise from there would target 38.2% retracement of 2.1161 to 1.1409 at 1.5134. Reaction from there would reveal whether rise from 1.1409 is just a correction, or developing into a long term up trend.

USD/CHF surged to as high as 0.9328 last week but retreated since then. Initial bias remains neutral this week for some consolidations first. On the upside, above 0.9328 will resume the rally from 0.9084 for 0.9367 resistance. On the downside, below 0.9236 minor support will turn intraday bias back to the downside for 0.9084 instead.

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.

In the long term picture, price actions from 0.7065 (2011 low) are currently seen as developing into a long term corrective pattern, at least until a firm break of 1.0342 resistance.

AUD/USD's fall from 0.7555 continued last week and outlook is unchanged. Rebound from 0.7105 is complete with three waves up to 0.7555, and fall from 0.8006 is probably ready to resume. Initial bias is now on the downside this week for 0.7169 support first. Break will target 0.7105 and below. On the upside, break of 0.7369 resistance is needed to indicate short term bottoming. Otherwise, outlook will stay mildly bearish in case of recovery.

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.

In the longer term picture, focus remains on 0.8135 structural resistance. Decisive break there will argue that rise from 0.5506 is developing into a long term up trend that reverses whole down trend from 1.1079 (2011 high). In that case, further rally would be seen to 61.8% retracement of 1.1079 to 0.5506 at 0.8950 and possibly above. Rejection by 0.8135 will keep long term outlook neutral at best.

USD/CAD's rise from 1.2286 continued last week and outlook is unchanged. Fall from 1.2947 should have completed with three waves to 1.2286. Initial bias stays on the upside this week for retesting 1.2894/2947 resistance zone. On the downside, break of 1.2491 support is needed to indicate completion of the rise. 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.

In the longer term picture, we're viewing price actions from 1.4689 as a consolidation pattern. Thus, up trend from 0.9506 (2007 low) is still expected to resume at a later stage. This will remain the favored case as long as 1.2061 support holds, which is close to 50% retracement of 0.9406 to 1.4689 at 1.2048. However, rejection by 55 month EMA, follow by firm break of 1.2061 support, will argue that USD/CAD has already started a long term down trend. Next target is 61.8% retracement of 0.9406 to 1.4689 at 1.1424.

Euro tumbled broadly and deeply last week, and ended as the run away worst performer. It's firstly weighed down by dovish comments from ECB officials, who talked down the need for policy action to counter inflation. More importantly worries grew after Austria returned to full lockdown.

Daily new COVID-19 infections in Austria jump to 15k level, comparing to less than 10k in the first wave back in November last year. Daily deaths in Austria also rose back to above 50. The concern is that Germany, with daily infection at around 60k comparing to 30k in prior peaks, could follow soon. There is much downside risks, technically and fundamentally, for the Euro going ahead.

In other parts of the currency markets, Australian Dollar ended as the second weakest, followed by Swiss Franc. Sterling was the strongest one as strong inflation reading continued to push expectations of a imminent BoE rate hike. Dollar was the second strongest but Yen also regained some spotlight as overall risk markets turned mixed.

EUR/CHF downside break out as long term down trend resumes

EUR/CHF's break of 1.0505 support (2020 low) last week was a rather bearish development, which suggests resumption of long term down trend from 1.2004 (2018 high, which was also the floor that SNB abandoned in 2015). Weekly MACD is trending down, suggesting increasing downside momentum. Oversold conditions in weekly and daily RSI might slow the decline somewhat. But sustained trading below 1.0505 will extend the down trend to 61.8% projection of 1.2004 to 1.0505 from 1.1149 at 1.0223 at least.

EUR/GBP to take on 0.8276 key support, could it hold?

EUR/GBP also resumed the down trend from 0.9499 last week by breaking 0.8401 support. Outlook is starting to get more bearish with rejection by 55 week EMA. Weekly MACD could also be starting to turn downward, suggesting increasing downside momentum. For now, we'd still expect strong support from 0.8276 to contain downside, at least on the first attempt. However, sustained break there will carry long term bearish implication, and could drag the cross further lower to 61.8% retracement of 0.6935 to 0.9499 at 0.7914 and even below.

GBP/CHF's medium term correction complete after rebound?

GBP/CHF rebound strongly last week on increasing expectation that BoE would be forced to act on interest rate soon, by stronger than expected surge in consumer inflation. The development does suggests that correction from 11.3070 has completed at 1.2275, after defending key resistance turned support at 1.2259. That in turn keeps long term bullishness that whole up trend from 1.1107 (2020 low) is not finished. Yet, we'd like to sustained trading above 55 day EMA (now at 1.2541) and 55 week EMA (now at 1.2549) to give us more confidence on this bullish case. But, if this bullish case turns out to be true, GBP/CHF could accelerate ahead to 1.2816 resistance with a strong break. That could be translated into downside acceleration in EUR/GBP, which then solidify Euro's overall bearishness.

Dollar index extended rally, on track to 97.72 fibo level

With the extra help from selloff in Euro, Dollar Index accelerated higher to close at 96.03 last week. Near term outlook will stay bullish as long as 94.56 resistance turned support holds. Rise fro 89.20 should target 61.8% retracement of 102.99 to 89.20 at 97.72 next.

The question remains on whether the corrective pattern from 103.82 (2017 high) is complete with three waves to 89.20. Or, it's a triangle pattern in it's fourth leg. The medium term momentum above 97.72 fibonacci level will reveal some hints on which case it is. For now, we'll just keep monitoring the development first.

NASDAQ made new record but DOW headed down

US stocks ended mixed last week with NASDAQ making a new record high. But the close was not too convincing while daily MACD stays below signal line. For now further rise is still in favor as long as 15848.83 support holds, for 100% projection of 13002.53 to 15403.43 from 14181.69 at 16582.59. But break of 15484.83 support will open up deeper correction back to 55 day EMA (now at 15298.50).

DOW, on the other hand, extended the corrective fall from 36565.73 last week. 55 day EMA (now at 35428.33) is likely to be tested soon, together with channel support at around 35062. Rebound from this zone will maintain medium term bullishness for another rise through 36565.73. However, sustained break there will indicate that medium term top was already formed, and open up deeper fall to 33613.03 support and even below. We'd see very soon if risk-on markets could persist into the end of the year, or not.

EUR/JPY Weekly Outlook

EU/JPY's decline from 133.44 accelerated to as low as 127.96 last week and there is no clear sign of bottoming yet. Initial bias stays on the downside this week for 127.91 first. Break there will target 126.58 medium term fibonacci level next. On the upside, break of 129.97 minor resistance is needed to indicate short term bottoming. Otherwise, further fall will remain in favor in case of recovery.

In the bigger picture, as long as 38.2% retracement of 114.42 (2020 low) to 134.11 at 126.58 holds, up trend from 114.42 is still in favor to continue. Break of 134.11 will target long term resistance at 137.49 (2018 high). However, sustained break of 126.58 will raise the chance of medium term bearish reversal. In this case, deeper decline would be seen to 61.8% retracement at 121.94, and possibly below.

In the long term picture, EUR/JPY is staying in long term sideway pattern, established since 2000. Long term outlook will remain neutral until breakout from the range of 109.03/137.49.

As suggested in the CFTC Commitments of Traders report in the week ended November 16, NET LENGTH of USD index futures dropped -540 contracts to 34 908. Bets on both sides climbed slightly higher. Concerning European currencies, NET SHORT of EUR futures gained +7 599 contracts to 3 826 while that of GBP futures jumped +19 506 contracts to 31 599.

On safe-haven currencies, NET SHORT of CHF futures plunged -8 154 contracts to 8 889 while that of JPY futures slumped -12 225 contracts to 93 126. Concerning commodity currencies, NET SHORT of AUD futures fell -2 271 contracts to 61 153. NET LENGTH for NZD futures increased +1 083 contracts to 13 965 during the week. CAD futures saw NET LENGTH up +3 605 contracts to 8 709.

According to the CFTC Commitments of Traders report for the week ended November 16, NET LENGTH of crude oil futures dropped -5 527 contracts to 415 785. Speculative longs slumped -42 410 contracts while shorts fell -36 883 contracts. Bets were trimmed on both sides as price correction form the October peak continued. For refined oil products, NET LENGTH for heating oil dropped -2 993 contracts to 17 029, while that for gasoline rose +9 145 contracts to 54 214. NET SHORT of natural gas futures gained +2 429 contracts to 144 620 during the week.

Gold futures’ NET LENGTH jumped +9 599 contracts to 259 780. Silver futures’ NET LENGTH rose +8 710 contracts to 45 625. For PGMs,  NET LENGTH of Nymex platinum futures gained +3 383 contracts to 21 013, while NET SHORT for palladium futures slipped -916 contracts to 2 038.

GBP/JPY recovered last week but there is no change in the outlook. Initial bias remains neutral this week first and further fall is mildly in favor. On the downside, break of 152.35 will resume the fall from 158.19 to148.93 key support next. Nevertheless, break of 154.70 will turn bias back to the upside for retesting 158.19 high instead.

In the bigger picture, rise from 123.94 is seen as the third leg of the pattern from 122.75 (2016 low). Further rally is still expected as long as 148.93 support holds. However, firm break of 148.93 will argue that the medium term trend has reversed and bring deeper fall back to 142.71 resistance turned support first.

In the longer term picture, GBP/JPY could have set up a long term up trend already with break of 156.69 resistance, and the stay above 55 month EMA. Current rise from 122.75 could target 61.8% retracement of 195.86 to 122.75 at 167.93.

EU/JPY's decline from 133.44 accelerated to as low as 127.96 last week and there is no clear sign of bottoming yet. Initial bias stays on the downside this week for 127.91 first. Break there will target 126.58 medium term fibonacci level next. On the upside, break of 129.97 minor resistance is needed to indicate short term bottoming. Otherwise, further fall will remain in favor in case of recovery.

In the bigger picture, as long as 38.2% retracement of 114.42 (2020 low) to 134.11 at 126.58 holds, up trend from 114.42 is still in favor to continue. Break of 134.11 will target long term resistance at 137.49 (2018 high). However, sustained break of 126.58 will raise the chance of medium term bearish reversal. In this case, deeper decline would be seen to 61.8% retracement at 121.94, and possibly below.

In the long term picture, EUR/JPY is staying in long term sideway pattern, established since 2000. Long term outlook will remain neutral until breakout from the range of 109.03/137.49.