Sample Category Title

Daily Pivots: (S1) 0.7395; (P) 0.7413; (R1) 0.7442; More...

Intraday bias in AUD/USD is turned neutral with current recovery. On the downside, sustained trading below 55 day EMA (now at 0.7396) will argue that rebound from 0.7105 is complete with three waves up to 0.7555. That would also argue that fall from 0.8006 is ready to resume through 0.7105 low. On the upside, above 0.7470 minor resistance will turn bias back to the upside for 0.7555 resistance again.

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) 1.1561; (P) 1.1578; (R1) 1.1605; More...

Intraday bias in EUR/USD remains neutral for the moment. Further decline is in favor as long as 1.1615 minor resistance holds. Break of 1.1512 will extend the pattern from 1.2348 to 61.8% projection of 1.1908 to 1.1523 from 1.1691 at 1.1453. Break will pave the way to 100% projection at 1.1306. On the upside, though, above 1.1615 minor resistance will dampen the bearish case and turn bias back to the upside for 1.1691 resistance.

In the bigger picture, price actions from 1.2348 should at least be a correction to rise from 1.0635 (2020 low). As long as 1.1908 resistance holds, deeper fall would be seen to 61.8% retracement of 1.0635 to 1.2348 at 1.1289. Nevertheless break of 1.1908 resistance will revive medium term bullishness and turn focus back to 1.2348 high.

Daily Pivots: (S1) 1.3485; (P) 1.3532; (R1) 1.3615; More...

Intraday bias in GBP/USD remains neutral at this point. On the downside, firm break of 1.3410 low will confirm resumption of larger decline from 1.4248 and target 1.3164 fibonacci level next. However, on the upside, above 1.3604 minor resistance will turn bias back to the upside of 1.3833 resistance. Decisive break there will be a sign of near term bullish reversal.

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) 0.9117; (P) 0.9137; (R1) 0.9156; More....

Intraday bias in USD/CHF remains neutral as consolidation continues above 0.9084. Further decline is expected as long as 0.9174 resistance holds. Break of 0.9084 will resume the fall from 0.9367 to 0.9017 support, and then 0.8925. On the upside, however, break of 0.9174 resistance will indicate short term bottoming and turn bias back to the upside for stronger rebound 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.

General trend

• Equity indices generally reverse gains.
• Nikkei opened higher as heavyweight Softbank rose on buyback announcement, the index has since reversed its gain.
• Japanese companies due to report earnings include Nissan Motor, Nexon, IHI Corp.
• Shanghai Composite ended morning trading fractionally lower.
• Hang Seng has declined despite the higher open.
• S&P ASX 200 has traded slightly lower.
• USD/JPY dipped amid speculation related to Fed Chair position; AUD/JPY also declines.
• PHP rises on better GDP data.
• Companies due to report during the NY morning include ADT, Blue Apron, BioNTech, Cardinal Health, DR Horton, Hain Celestial, Hilton Grand Vacations, HUYA, International Game Technology, II VI, Melco Resorts, Palantir, Party City, Echostar, SeaWorld, Sysco, Triumph Group, Westrock.

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened +0.0%.
• NAB.AU Reports FY21 (A$) adj Cash Earnings 6.56B v 4.7B y/y, Net Op Rev 16.7B v 17.3B y/y.
• JHX.AU Reports Q2 adj Net $154.9M v $120.5M y/y; adj EBIT $205.7M v $163.1M y/y; Rev $903.2M v $764M y/y.
• (AU) Australia Oct NAB Business Confidence: +21 v +10 prior; Conditions: +11 v +5 prior.
• (NZ) New Zealand Oct Total Card Spending M/M: 9.5% v +1.6% prior; Retail Card Spending M/M: 10.1% v +0.9% prior.
• (AU) Australia sells A$150M v A$150M indicated in 0.75% Nov 2027 Indexed Bonds, Avg Yield: -0.8456%, bid to cover 4.85x.

Japan

• Nikkei 225 opened +0.2%.
• (JP) Japan LDP Party and coalition member party Komeito have agreed to an early ¥50K cash handout - Japan press.
• (JP) Japan PM Kishida: Confirms wants to compile economic stimulus package by Nov 19th and extra budget by end of Nov.
• 6502.JP Reportedly set to split itself into three listed companies by 2023, following strategic review expected results due this week – Nikkei.
• Follow Up: 6502.JP In process of formulating mid term plan, no plans as of now to split company, but could be an option - comments on press.
• (JP) Japan Sept Current Account: ¥1.03T v ¥1.06Te; Adj Current Account: ¥762.7B v ¥847.2Be.
• (JP) Japan MoF sells ¥900B v ¥900B indicated in 0.7% 30-year JGBs, avg yield 0.6830% v 0.7020% prior, bid to cover: 3.45x v 2.90x prior.
• (JP) Japan Oct Eco Watchers Current Survey: 55.5 v 48.0e (highest level since Jan 2014); Outlook Survey: 57.5 v 57.0e.
• 9984.JP Reports H1 Net ¥363.7B v ¥1.88T y/y, Op ¥1.05T v ¥1.44T y/y, Rev ¥2.98T v ¥2.63T y/y; share buyback of up to ¥1T (14.6% of market cap); No longer lists Amazon, Paypal and TSMC among its investments (yesterday after the close).

Korea

• Kospi opened -0.1%.
• 005930.KR With Hynix provided supply chain data related to chips to US, but both withheld key data – Yonhap.
• (KR) According to satellite imagery, North Korea is still operating its key uranium plant - Yonhap.

China/Hong Kong

• Hang Seng opened +0.8%; Shanghai Composite opened +0.2%.
• (HK) Hong Kong Monetary Authority (HKMA) said to have requested banks report exposure to China property market - press.
• (CN) China is considering new measures to open up capital markets, including the trading of financial and commodity futures - China Securities Journal.
• 1638.HK Taking various measures to solve liquidity issues; Accelerating sales of existing properties.
• (CN) Follow Up: More cities in China have tightened the use of proceeds from property pre-sales - Chinese press.
• (CN) Said that China state researchers [at China State Council Think Tank] held a meeting with property developers on Monday, Nov 8th, discussed market risks and taxes.
• (CN) China PBOC sets Yuan reference rate: 6.3903 v 6.3959 prior.
• (CN) China PBOC Open Market Operation (OMO): Injects CNY100B in 7-day reverse repos v CNY100B prior; Net inject CNY90B v Net inject CNY90B prior.
• 175.HK Reports Oct Vehicle Sales 111.6K units, -20% y/y (yesterday after the close).

Other

• (TW) Taiwan Defense Min: China's increasing military strenght is a severe challenge for the country.

North America

• RBLX Reports Q3 -$0.13 v -$0.26 y/y, Rev $509.3M v $251.9M y/y; Based on our October results, we appear to be having a great start to Q4.
• TDUP Reports Q3 -$0.15 v -$0.15e, Rev $63.3M v $61.8Me.
• AMRS Reports Q3 -$0.27 v -$0.15e, Rev $47.9M v $64.2Me; To offer $400M of convertible senior notes due 2026.
• SDC Reports Q3 -$0.23 v -$0.15e, Rev $138M v $182Me; Guides Q4 Rev $120-140M v $200Me; Cuts FY guidance.
• (US) Said that Brainard (Dove) was interviewed by President Biden and is a contender to become Fed Chair, cites sources - US financial press.

Europe

• (UK) Oct BRC Sales LFL Y/Y: -0.2% v -0.6% prior.
• (EU) ECB chief Lagarde: Confident current high inflation is transitory.
• (DE) Advisers to German Chancellor Merkel expect Germany economy to grow 4.6% in 2022; Believe economy will grow 2.7% in 2021 - German press.

Levels as of 01:15ET

• Hang Seng -0.1%; Shanghai Composite +0.0%; Kospi -0.2%; Nikkei225 -0.7%; ASX 200 -0.1%.
• Equity Futures: S&P500 -0.3%; Nasdaq100 -0.2%, Dax -0.2%; FTSE100 -0.4%.
• EUR 1.1601-1.1577; JPY 113.29-112.72; AUD 0.7426-0.7391; NZD 0.7168-0.7147.
• Commodity Futures: Gold -0.2% at $1,825/oz; Crude Oil -0.1% at $81.86/brl; Copper -0.3% at $4.38/lb.

Short-term Elliott wave view in Oil (CL) suggests the decline from Oct 25, 2021 peak is unfolding as a zigzag Elliott Wave structure. Down from Oct 25, wave ((i)) ended at 80.58 and bounce in wave ((ii)) ended at 84.88. The commodity then extends lower in wave ((iii)) towards 79.69 and bounce in wave ((iv)) ended at 83.42. Last leg lower wave ((v)) ended at 78.25 which completed wave A of the zigzag.

Wave B rally is in progress with internal division as another zigzag Elliott Wave structure in lower degree. Up from wave A, wave (i) ended at 80.17 and pullback in wave (ii) ended at 78.96. Oil then extends higher in wave (iii) towards 82.47, and dips in wave (iv) ended at 81.96. Final leg higher wave (v) ended at 82.67 which completed wave ((a)) of B. Pullback in wave ((b)) is in progress to correct the cycle from November 5 low before Oil resumes higher in wave ((c)) of B. Near term, as far as pivot at 78.25 low remains intact, expect dips to find support in 3, 7, or 11 swing before the next leg higher.

Oil (CL) 45 Minutes Elliott Wave Chart

Key Highlights

• GBP/USD nosedived below 1.3600 and 1.3550.
• A key bearish trend line is forming with resistance near 1.3600 on the 4-hours chart.
• EUR/USD is stable above 1.1500, but it is facing many hurdles.
• Gold price rallied above the $1,780 and $1,800 resistance levels.

GBP/USD Technical Analysis

The British started a fresh decline after it failed to clear 1.3830 against the US Dollar. GBP/USD declined heavily below the 1.3700 and 1.3600 support levels.

Looking at the 4-hours chart, the pair even traded below the 1.3550 support, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

The pair even spiked below 1.3500 and a low was formed near 1.3427. The pair is now attempting a recovery above 1.3450. It even moved above the 23.6% Fib retracement level of the downward move from the 1.3695 swing high to 1.3427 low.

On the upside, an immediate resistance is near the 1.3560 level. The next major resistance is near the 1.3570 level. It is close to the 50% Fib retracement level of the downward move from the 1.3695 swing high to 1.3427 low.

There is also a key bearish trend line forming with resistance near 1.3570 on the same chart. A close above 1.3570 and 1.3600 could open the doors for a decent increase.

On the downside, an initial support is near 1.3465 level. The next major support is near 1.3450, below which there is a risk of a larger decline towards 1.3400.

Looking at EUR/USD, the pair is still stable above 1.1500, but the bulls are facing a lot of hurdles near 1.1600 and 1.1620.

Economic Releases

• German ZEW Business Economic Sentiment Index for Nov 2021 – Forecast 19.0, versus 22.3 previous.
• US Producer Price Index for Oct 2021 (MoM) – Forecast +0.5%, versus +0.5% previous.
• US Producer Price Index for Oct 2021 (YoY) – Forecast +8.7%, versus +8.6% previous.

STOCKS

Overall equities look fairly bullish. Dow has scope to rise towards 36750-37325 while above support at 36250 while Dax can rise to 16400. Nikkei can head towards 31000 and Shanghai has scope to rise to 3550. Nifty and Sensex are bullish towards 18200/500 and 61000/62000 respectively while above immediate supports.

Dow (36432.22, +104.27, +0.29%) rose well to test 36566 yesterday in line with our expectation of a rise towards 36750-37325 on the upside. Watch support near 36250 above which the index is bullish.

DAX (16046.52, -7.84, -0.049%) has been stable and can test 16400 on the upside before we see a reversal from there.

Nikkei (29536.17, +29.12, +0.099%) went up to test 29750.46 before coming down. The view is still bullish to see a test of 30000/31000 on the upside. A strong break below 29500 will be needed to negate out bullish view and instead be bearish towards 28000.

Shanghai (3493.55, -4.91, -0.14%) has been stable but can soon head towards 3550. However, if a fall below 3475/3450 if seen can turn the view bearish towards 3400.

Nifty (18068.55, +151.75, +0.85%) managed to rise after falling sharply yesterday. A sustained rise above 18000 is needed for the view to be bullish towards 18200/500, else the range of 18000-17600 can continue.

Sensex (60545.61,+477.99, +0.80%) has risen and while above 60000, it looks bullish towards 61000/62000 eventually.

COMMODITIES

Crude prices could dip a bit but is likely to remain in a range for the near term. Gold and Silver are bullish towards 1835/50 and 25. Copper needs to rise above 4.45 to turn further bullish else can decline back to 4.25/20.

Brent (83.49) and WTI (82.00) have resistances near 84 and 83 respectively and has scope to dip towards 80 and 81 in the near term.

Gold (1825.10) and Silver (24.30) are rising well and Gold has scope to test 1835/50 while above 1820. Silver on the other hand is bullish too towards 25.

Copper (4.3930) has risen slightly but could face rejection near 4.45 to push the price back towards 4.25/20. Only a sustained break above 4.45 can take it higher to 4.50/60 on the upside.

FOREX

US Dollar retreated a bit pulling up Euro towards 1.16. Note that 1.16-1.1650 is a good resistance zone and is likely to hold in the near term producing a fall back to 1.1550-1.15. EURJPY, Aussie and Pound look bearish for the near term. USDCNY has fallen and could test 6.3750 before bouncing back from there. USDINR has scope to test 73.90/80 initially before a bounce to 74.20/25 is seen. On the downside there is scope for a fall to 73.50 in the medium term. Dollar-Yen has fallen too and a break below 113, if seen will trigger more bearishness going forward.

Dollar Index (94.042) has fallen surprisingly, as 94.62 is holding as a decent resistance for now. A dip to 93.80/75-93.50 is likely before a bounce back is seen.

Euro (1.1583) has bounced well from levels just above 1.15 but on the upside, Euro is likely to be limited to 1.16-1.1650 before again falling from there. A broad range of 1.15-1.16/1.1650 may hold for the near term.

EURJPY (130.92) has fallen well and could test 130.50 on the downside if the fall sustains. Overall near to medium trend looks bearish for now.

Aussie (0.7403) looks bearish for a dip to 0.7350 or even lower in the medium term.

Pound (1.3556) is holding well above 1.34 but failure to rise above 1.36 can again bring it down to 1.34-1.33 in the medium term. Broad range of 1.37-1.33 may hold for a couple of weeks.

Dollar-Yen (113.06) fell sharply as the US Dollar weakened. The pair has broken below 113.25 and a sustained decline below 113 will indicate that a near term top is in place and could be bearish towards 112.55-112 in the medium term.

USDCNY (6.3892) has dipped and could head towards 6.3750, the crucial support below current levels. If that holds, a bounce back again towards 6.40/42 is possible on the medium term.

USDINR (74.02) fell sharply yesterday and has scope to test 73.90/80 before again bouncing back from there towards 74.20/40/50 in the near term. Looking at a broader picture, a range of 73.50-74.50 can hold for the next 1-2 weeks with a sell-on rallies environment.

INTEREST RATES

US Treasury Yields have bounced-back slightly. They have room to test their key short-term supports in the coming days and then can see a bounce-back move. We expect the yields to remain in a broad sideways range for some time. The German yields keep our bearish view intact and can fall further in the coming days. The 10Yr and 5Yr GoI have declined sharply yesterday and can remain under pressure for a further fall from here.

The US 2Yr (0.43%), 5Yr (1.10%) and the 10Yr (1.48%) Treasury yields have bounced a bit while the 30Yr (1.86%) has dipped further. As mentioned yesterday a dip to 1.4%-1.35% (10Yr) and 1.8%-1.75% (30Yr) can be seen in the coming day. Thereafter a bounce-back move is possible. Broadly we now look for a range of 1.35%-1.65% (10Yr) and 1.75%-2.1/2.2% (30Yr)

The German 2Yr (-0.74%), 5Yr (-0.56%), 10Yr (-0.25%) and the 30Yr (0.11%) have recovered slightly after having seen a sharp fall last week. The bearish view is intact. The 10Yr can fall to -0.3% and -0.4% while below -0.2%. The 30Yr can test 0.05%-0% and then see a corrective bounce to 0.1% before seeing a fresh and deeper fall below 0%.

The India 10Yr GoI (6.3006%) and 5Yr (5.6675%) have declined sharply yesterday. The 10Yr is at the lower end of its 6.3%-6.4% range. Our view of seeing a break below 6.3% and a fall to 6.2% and lower levels remain intact. The 5Yr has come down towards 5.66% as expected after breaking below 5.7%. It has room to test 5.62%-5.6% on the downside now while below 5.7%.

Daily Pivots: (S1) 112.98; (P) 113.32; (R1) 113.57; More...

USD/JPY's pull back from 114.69 resumes by breaking 113.24 and intraday bias is mildly on the downside. While deeper fall could be seen, we'd still expect downside to be contained above 112.07 resistance turned support to bring rebound. On the upside, break of 113.65 minor resistance will turn bias back to the upside for retesting 114.69. However, sustained break of 112.07 will dampen our bullish view and bring deeper fall back towards 109.11 structural support.

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 114.54 resistance and then 118.65 high. This will now be the preferred case as long as 109.11 support hold, even in case of deep pull back.

Yen's rally resumes today while overall market sentiments are mixed. Asian stocks are treading water but US benchmark yield takes another dive. Swiss Franc is following as the second strongest for now. On the other hand, commodity currencies are trading broadly lower, as led by Aussie. Euro and Sterling are mixed. Main focuses will now turn to German ZEW economic sentiment and US PPI.

Technically, we'd pay some attention to Gold today, as it now in proximity to 1388.79 key near term resistance again. Decisive break there will finally affirm the case that whole correction from 2074.84 has completed. Stronger rally would be seen to 1916.30 resistance for confirmation. That might come together with some selloff in Dollar elsewhere, in particular against Yen. But break of 1798.67 support will indicate another rejection by 1833.79 and bring near term reversal, which could be accompanied by rebound in Dollar.

In Asia, at the time of writing, Nikkei is down -0.48%. Hong Kong HSI is down -0.08%. China Shanghai SSE is down -0.02%. Singapore Strait Times is down -0.27%. Japan 10-year JGB yield is flat at 0.061. Overnight, DOW rose 0.29%. S&P 500 rose 0.09%. NASDAQ rose 0.07%. 10-year yield rose 0.044 to 1.497.

Fed Harker: No rate hike before tapering is complete

Philadelphia Fed President Patrick Harker said yesterday "I don't expect that the federal funds rate will rise before the tapering is complete." But he added, "we are monitoring inflation very closely and are prepared to take action, should circumstances warrant it."

Harker expected the economy to grow by around 5.5% this year and 4% next, provided that there is no further wave of COVID-19 infections. Then growth was slow to 2-3% in 2023.

Fed Evans: Inflation to stay more elevated in 2022

Chicago Fed President Charles Evans said, "inflation will stay more elevated in 2022", but "we have time to be patient". In his own view, Fed will not need to raise interest rates until 2023.

Nevertheless, in a speech, he said there are signs that inflation pressures could build up more broadly. "These developments deserve careful monitoring and present a greater upside risk to my inflation outlook than I had thought last summer."

Separately, Fed Governor Michelle Bowman said, "housing supply issues are unlikely to reverse materially in the short term, which suggests that we are likely to see higher inflation from housing for a while."

BoE Bailey: We will have to act on interest rates if evidence becomes clear

BoE Governor Andrew Bailey there was "a risk of more bottlenecks in the economy, especially in demand for labour which could fuel expectations of higher inflation.''

And, "once you start to get an increase in inflation of this sort we want to stop it becoming generalized in the economy."

"That's why we would, and will, have to act on interest rates if we see that evidence becoming clear," he said.

Australia NAB business confidence rose to 21 in Oct, conditions rose to 11

Australia NAB business confidence rose sharply from 10 to 21 in October. Business conditions rose from 5 to 11, back above long-run average. Trading conditions rose from 10 to 17. Profitability conditions rose from 2 to 8. Employment conditions rose from 1 to 6.

"The large improvement in forward orders provides further evidence of the strong rebound in economic activity that is underway," said NAB Chief Economist Alan Oster. "Businesses can see that conditions are improving and that momentum should continue over coming months."

"We are starting to see some price pressures, but these remain largely in the form of pressure on input costs," said Oster. "These pressures should pull back as global supply chain disruptions ease and labour markets normalise, although this process may take some time yet."

Elsewhere

Japan labor cas earnings rose 0.2% yoy in September, versus expectation of 0.6% yoy. Current account surplus narrowed to JPY 0.76T, versus expectation of JPY 0.85T. Bank lending rose 0.9% yoy in October, versus expectation of 0.7% yoy.

Germany will released trade balance and ZEW economic sentiment today. France will also release trade balance. Later in the day , US will release PPI.

USD/JPY Daily Outlook

Daily Pivots: (S1) 112.98; (P) 113.32; (R1) 113.57; More...

USD/JPY's pull back from 114.69 resumes by breaking 113.24 and intraday bias is mildly on the downside. While deeper fall could be seen, we'd still expect downside to be contained above 112.07 resistance turned support to bring rebound. On the upside, break of 113.65 minor resistance will turn bias back to the upside for retesting 114.69. However, sustained break of 112.07 will dampen our bullish view and bring deeper fall back towards 109.11 structural support.

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 114.54 resistance and then 118.65 high. This will now be the preferred case as long as 109.11 support hold, even in case of deep pull back.

Economic Indicators Update