Sample Category Title

Daily Pivots: (S1) 0.8529; (P) 0.8576; (R1) 0.8608; More...

Intraday bias in EUR/GBP remains neutral for the moment. On the upside, sustained break of 0.8668 will be a strong sign of larger bullish reversal. Next target will be 161.8% projection of 0.8448 to 0.8612 from 0.8499 at 0.8764. On the downside, though, break of 0.8499 will bring retest of 0.8448 low instead.

In the bigger picture, price actions from 0.9499 (2020 high) are still seen as developing into a corrective pattern. Deeper fall could be seen as long as 0.8668 resistance holds, towards long term support at 0.8276. However, firm break of 0.8668 resistance would argue that a medium term bottom was already formed. Stronger rise would be seen to 0.8861 support turned resistance to confirm completion of the corrective pattern.

Daily Pivots: (S1) 1.5902; (P) 1.6003; (R1) 1.6065; More...

Intraday bias in EUR/AUD remains neutral for the moment. As long as 1.5898 holds, larger rise from 1.5250 is still in favor to continue. Break of 1.6232 will turn bias to the upside for retesting 1.6434 high first. However, sustained break of 1.5898 will argue that rise from 1.5250 has completed, and turn near term outlook bearish for 1.5614 support first.

In the bigger picture, rise from 1.5250 medium term bottom is currently seen as a correction to the down trend from 1.9799 first. Stronger rise could be seen to 38.2% retracement of 1.9799 to 1.5250 at 1.6988 next. We'd tentatively expect strong resistance from there to limit upside, at least on first attempt. Meanwhile, break of 1.5898 support will indicate that the rebound has completed. Larger down trend from 1.9799 might be ready to resume through 1.5250 low.

The US dollar pulled back slightly after its remarkable rally last week. On Friday, data published by the US government showed that personal consumption expenditure rose to a 30-year high in August. This was a notable number since the data is often called the most important inflation number by the Federal Reserve. Additional data showed that the country’s personal consumption rose in August while incomes declined. At the same time, data by the Institute of Supply Management (ISM) revealed that the manufacturing index rallied in September.

Bitcoin and other cryptocurrency prices rallied during the weekend as optimism about the industry rose. Bitcoin rose to more than $48,000, which was more than $5,000 above the lowest level last week. Ethereum rose to more than $3,400 while the combined market capitalization of cryptocurrencies rose to more than $2.14 trillion. This growth happened as on-chain data showed that Bitcoin’s hashrate rose close to its all-time high during the weekend. This is a positive number for Bitcoin and other cryptocurrencies.

The economic calendar will be relatively muted today. In the morning session, Switzerland will publish the latest inflation numbers. Unlike in other countries, inflation is expected to remain under pressure in the country. Turkey will also publish the latest inflation data, which will be watched closely because of the CBRT decision to cut interest rates in September. The next key economic data will be the US factory order numbers. Investors will keep watching the American political situation after the bipartisan infrastructure bill failed.

EURUSD

The EURUSD pair was little changed during the Asian session. The pair is trading at 1.1593, which was slightly higher than last week’s low of 1.1562. On the four-hour chart, the pair remains below the key level of 1.1663. It is also below the 25-day and 50-day moving averages. Therefore, this rebound could be part of a relief rally, meaning that it will likely resume the downward trend later this week.

USDCHF

The USDCHF has little changed ahead of the latest Switzerland inflation data. The pair is trading at 0.9305, which was slightly above last week’s low at 0.9280. On the four-hour chart, the price was below the upper side of the ascending channel. It is also along with the 25-day moving average while the Relative Strength Index (RSI) has been in a downward trend. Therefore, the pair will likely resume the downward trend as bears target the key support level at 0.9250.

XAUUSD

The XAUUSD pair rose to a high of 1,765, which was above last week’s low of 1,720. On the four-hour chart, the pair moved slightly above the upper side of the descending channel. It is also above the 25-day moving average and along with the 50% Fibonacci retracement level. The pair will likely keep rising as bulls target the key resistance at 1,800.

US equity futures posted a strong rebound on Friday, which particularly sent financials and energy stocks higher. Exxon Mobil gained another 3.60% on Friday, surging near 15% over the past two weeks, as oil consolidated gains above the $75 per barrel.

Asian equities kicked off the week on a mixed note. China was closed, but equities in Japan kicked off the week plunging below their 200-dma. Stocks in Hang Seng slipped more than 2% as trading on China’s Evergrande Group and its property services were halted in Hong Kong following a report revealing that the company agreed to sell a controlling stake in the unit to raise much-needed cash. Another Chinese property company Hopson shares stopped trading and its bonds plunged on news that they would buy 51% stake in Evergrande. Then, of course, China injected the equivalent of $70 billion over the past five days to avoid a broader financial risk to the system. Though the Evergrande crisis is not over in China, global investors no longer see the Evergrande waves hitting the international markets.

But the worries of supply chain continue giving cold chills. The worsening global supply chain disruption, combined with rising inflation - which looks much less transitory than what the policymakers first thought, and which results in a narrowing capacity to respond to a slowing economic growth - could continue weighing on investor sentiment this week.

have a couple of important events to watch. First, OPEC meets today and could announce an increase in monthly production goals, given the faster-than-expected growth in demand sent oil prices significantly higher over the weeks. US crude surged more than 22% between August and September. The expectation of higher OPEC supply leads to some profit taking in oil this morning, and the announcement could further halt the recent rally. But the exponential rise in natural gas prices should continue pushing higher the demand for fuel as replacement into the colder months in the northern hemisphere. Therefore, it looks like the oil producers have little to fear in the actual energy crunch environment, and rising supply above the actual 400’000 barrels per day may not hit the mood in the oil markets for long.

On the other hand, the upside in oil should remains limited at around the $80pb, as this fast rise in energy crisis can only stall the economic recovery and lead to a pullback in global demand. It’s a fine balance, but the power is in the hands of the supply side, for the moment.

The rising energy costs is a growing headache for inflation, and the central banks. We have two important central bank meetings this week: the Reserve Bank of Australia (RBA) will meet on Tuesday, and should keep rates unchanged, and the Reserve Bank of New Zealand (RBNZ) will meet on Wednesday, and is expected to raise the official cash rate by 25 basis points to 0.50%. The RBNZ rate hike will be a warning that tighter monetary policies is not a bluff, but they will start happening to ease the inflationary pressures.

Due tomorrow, the European producer prices are expected to post an increase past the 13% in August, but we can see a number more than that.

And, the economic data better be good to keep investor sentiment nice and sweet, as whatever we see on the data front, if inflation keeps rising, the central banks will need to remove support. And this brings me to the US jobs data due in the next couple of sessions. On Wednesday, the ADP report is expected to print a 430K new nonfarm jobs added in September, and likewise, Friday’s NFP figure is expected to reveal a 460K new nonfarm jobs in September. So, the expectations are gently moving away from the 800K or a million job additions of the past couple of months after last month print fell to 235K.

In summary: the global chip and energy shortage is getting worse, the inflation is rising, the recovery may be slowing, and that puts central banks between a rock and a hard place, where the best they could do is to do nothing, like the European Central Bank (ECB), or to tighten their monetary policy to avoid losing control on the economy. Let’s see if the selling pressure we saw in equities in September could extend to October, or investors will find a silver lining to push prices higher, like the Merck’s Covid pills that apparently reduced hospitalization and death by 50%. Merk shares jumped more than 8% on Friday and if the pills work, well they could just take off for substantial gains, and help the other recover September losses as well.

But I feel like this time, we could see a further downside pressure building, where energy and financials could outperform their peers.

Market movers today

• We start the week in a quiet fashion on the data front, with markets continuing to focus on the 'stagflation' theme. Later this week the highlight will be Friday's US jobs report, but we will also keep an eye on ECB minutes on Thursday and China's ongoing property crisis (see Research China - 'No 'Lehman moment' but financial stress is not over.
• Danish FX reserve figures are released this afternoon. The central bank has intervened in the FX market every month since February, apart from August, so it will be interesting to see whether it was necessary to also intervene in September, ahead Thursday's rate cut.
• OPEC+ will meet to review output policy amid a growing global energy crunch.

The 60 second overview

Evergrande: Trading in Evergrande's shares in the Hong Kong exchange was halted early Monday morning, as the company is reported to be in a process to sell 51% of its property management unit Evergrande Property Services. The sale could help ease the liquidity situation of the company, which has reportedly missed several debt payments over the past weeks. Another USD 260m dollar note guaranteed by Evergrande is set to mature today.

Looming energy crisis: Market focus continues to centre on rising global energy prices. This morning we published a piece looking closer at the drivers of elevated gas prices and the implications for growth and inflation in Europe, see Research Euro Area - Looming energy crisis creates a perfect storm. The gas price surge has been a result of recovering industrial demand, high demand for heating and cooling, and limited supply of gas and renewable energy. While the base case remains for prices to reverse lower in 2022, risks of more persistent effects on euro area growth and inflation remain. Elevated energy prices combined with cost-push inflation from ongoing global supply issues pose challenges for manufacturing and real disposable income, which European governments have already tried to soften (i.e. with France announcing a freeze to gas and electricity prices until April 2022 last week). Nevertheless, timing is unfortunate as the post-pandemic recovery is still vulnerable to setbacks.

US Macro: The ISM Manufacturing index rose in September to 61.1 (from 59.9). The sub-indices paint a picture of continuing strong growth, even if the rise was driven by longer supplier's delivery times due to the ongoing labour and material shortages. Production edged slightly lower, new orders were steady and employment rose ahead of the key jobs report on Friday. The August Private Consumption growth picked up to 0.4% m/m (from revised -0.5%) driven higher by stronger goods consumption amid the delta outbreak in August.

Equities: Solid macro and an avoided government shutdown sent US markets higher and Europe off worst levels. Value was the name of the game, alike the rest of last week, with communication services, financials and materials among the outperformers. Meanwhile, quality/defensives like healthcare and utilities lagged. In total, S&P 500 1.2% higher, Dow 1.4%, Nasdaq 0.8% and Russell 2000 an impressive 1.7%. Risk-off appears to be back in markets today though, with US futures pointing lower. Similarly, Asian markets show broad declines this morning fuelled by Evergrande suspending trading in its shares. China and South Korea are closed for holiday.

FI: Equities and bonds had a strong start on Q4 with both equities and bonds performing on Friday. The yield on 10Y Treasuries declined some 3bp and the yield on Bunds declined 3bp as well. There is room for more volatility given the risk from Evergrande, where the next test is today - whether they can redeem a structured bond that is maturing today - which Evergrande have guaranteed.

FX: EUR/USD saw some mild signs of stabilization on Friday but we see more downside risk. Last week proved a rollercoaster-ride for NOK.

Credit: Particularly the high-beta segment of credit remained under pressure on Friday while low-beta showed more resilience. Xover widened almost 1bp (taking it to 254bp) and IG widened 0.2bp to 50bp. HY cash bonds were the biggest loser, widening 8bp (and widened 20bp for the week) while IG was unchanged.

Nordic macro

Sweden: Riksbank buys SEK 1.5bn munis, 2bn T-bills, 5bn covered and 1bn linkers during the week starting Tuesday. DO issues 2bn 1059 and 1.5bn 1056 on Wednesday and Kommuninvest also issues different maturities that day.

A triplet of August indicators - PVI, GDP and consumption - is released on Wednesday. Riksbank's Jansson speaks about the economy Thusday and the Debt Office releases the September borrowing requirement that day too.

Daily Pivots: (S1) 1.0771; (P) 1.0789; (R1) 1.0807; More....

Intraday bias in EUR/CHF remains on the downside for the moment. Current fall from 1.0936 will target a test on 1.0694 low. Firm break there will resume whole decline from 1.1149. On the upside, above 1.0860 minor resistance will turn bias back to the upside for 1.0936 resistance instead.

In the bigger picture, medium term outlook remains mixed as EUR/CHF is still failing to get rid of 55 week EMA cleanly. On the upside, break of 1.1149 will resume the whole rise from 1.0505 (2020 low). On the downside, break of 1.0694 will revive some medium term bearishness for 1.0505 and below.

While some selling pressure is seen in Asian stocks, the forex markets are relatively steady. Canadian Dollar is currently the stronger one, followed by Yen. Sterling is the softer one, followed by Swiss France, Euro and Dollar. Overall risk sentiment will continue to drive the markets this week and hence we'll have some attention on Yen crosses. RBA and and RBNZ could also drive some volatility in Aussie and Kiwi too.

Technically, Sterling is also worth a watch this week. One the other hand, it's displaying some strength against Euro and Dollar. Break of 0.8499 support in EUR/GBP will argue that rebound from 0.8448 has completed at 0.8656. Also, break of 1.3608 resistance in GBP/USD will also indicate short term bottoming. On the other hand, sustained break of 149.03 key support in GBP/JPY will carry larger bearish implications.

In Asia, at the time of writing, Nikkei is down -1.41%. Hong Kong HSI is down -2.25%. Singapore Strait Times is up 1.46%. Japan 10-year JGB yield is down -0.0061 at 0.049. China remains on holiday.

CAD/JPY hesitates ahead of 88.44 resistance

While Hong Kong HSI and Nikkei, to a lesser extent, are trading deeply lower today, there is little reaction in the forex markets so far. But we'd still pay special attention to Yen crosses in case of a turn into risk-off mode in overall markets. In particular, we'd look at 149.03 support in GBP/JPY and 127.91 support in EUR/JPY to see if Yen is going strong.

On the other hand, we'd keep an eye on CAD/JPY to gauge if Yen's selloff is back. CAD/JPY has lost some momentum ahead of 88.44 resistance so far, failing to confirm completion of the correction from 91.16. But at the same time, it's still holding on 55 day EMA.

On the upside, decisive break of 88.44 resistance, with either help of WTI's break of 77 handle or rally in stocks, would confirm near term bullishness in CAD/JPY, as well as be an early sign of rally in Yen crosses elsewhere. The stage would be set for a retest on 91.16 high. However, sustained trading below 55 day EMA (now at 87.28) will revive near term bearishness and bring retest of 84.65 low instead.

AUD/NZD to confirm in bullish reversal or not this week

AUD/NZD is a focus today with RBA and RBNZ featured. It started a rebound since mid September, even though market are expecting RBNZ to hike soon while RBA is still extending it's QE. The reactions to both central banks this week would determine whether the cross has indeed been reversing the down trend.

Technically, the conditions for a bullish reversal are there, with 55 day EMA broken. Also, fall from 1.1042, as a corrective move, has met it's target of 100% projection of 1.1042 to 1.0415 from 1.0944 at 1.0314 already, as well as the medium term channel support. Slight bullish convergence condition is also seen in daily MACD.

On the upside, sustained break of 1.0538 resistance will firstly indicates that fall from 1.0944 has completed. Also, whole fall from 1.1042 might also have finished with three waves down to 1.0278 too. Near term outlook will be turned bullish for an eventual retest on 1.0944/1042 resistance zone. However, failure to break through 1.0538, followed by break of 1.0390 minor support, will bring retest of 1.0278 low, and retain medium term bearishness instead.

RBNZ to hike, RBA to hold, NFP to watch

RBNZ and RBA will meet this week. RBNZ is widely expected to finally raise OCR by 25 bps to 0.60%. The central bank was clear that the decision was delayed to avoid confusion on announcing it on the same date as lockdown extension in August. But overall outlook didn't change it's view on the policy path. There is some speculation that RBNZ could indeed hike by 50bps and the bullish impact on New Zealand Dollar could be huge if RBNZ does deliver this surprise. On the other hand, there is no scope for RBA to change policy after deciding to extend the asset purchase program till next February.

On the data front; US ISM services and non-farm payrolls will be mostly watched. Additionally, Eurozone will release ECB meeting accounts, retail sales Canada will also release job data.

• Monday: Japan monetary base; Swiss CPI, retail sales; Eurozone Sentix investor confidence; US factory orders.
• Tuesday: Australia AiG construction; Japan Tokyo CPI; Australia retail sales, trade balance, RBA rate decision; France industrial production; Eurozone PMI services final, PPI; UK PMI services final; Canada trade balance; US trade balance, ISM PMI services.
• Wednesday: RBNA rate decision; Germany factory orders; UK PMI construction; Eurozone retail sales; US ADP employment.
• Thursday: Australia AiG services; Japan leading indicators; Swiss unemployment rate, foreign currency reserves; Germany industrial production; France trade balance; ECB meeting accounts; US jobless claims; Canada Ivey PMI.
• Friday: Japan cash earnings, household spending, current account, Eco watcher sentiment; China Caixin PMI services; Germany trade balance; Canada employment; US non-farm payroll employment.

EUR/CHF Daily Outlook

Daily Pivots: (S1) 1.0771; (P) 1.0789; (R1) 1.0807; More....

Intraday bias in EUR/CHF remains on the downside for the moment. Current fall from 1.0936 will target a test on 1.0694 low. Firm break there will resume whole decline from 1.1149. On the upside, above 1.0860 minor resistance will turn bias back to the upside for 1.0936 resistance instead.

In the bigger picture, medium term outlook remains mixed as EUR/CHF is still failing to get rid of 55 week EMA cleanly. On the upside, break of 1.1149 will resume the whole rise from 1.0505 (2020 low). On the downside, break of 1.0694 will revive some medium term bearishness for 1.0505 and below.

Economic Indicators Update

While Hong Kong HSI and Nikkei, to a lesser extent, are trading deeply lower today, there is little reaction in the forex markets so far. But we'd still pay special attention to Yen crosses in case of a turn into risk-off mode in overall markets. In particular, we'd look at 149.03 support in GBP/JPY and 127.91 support in EUR/JPY to see if Yen is going strong.

On the other hand, we'd keep an eye on CAD/JPY to gauge if Yen's selloff is back. CAD/JPY has lost some momentum ahead of 88.44 resistance so far, failing to confirm completion of the correction from 91.16. But at the same time, it's still holding on 55 day EMA.

On the upside, decisive break of 88.44 resistance, with either help of WTI's break of 77 handle or rally in stocks, would confirm near term bullishness in CAD/JPY, as well as be an early sign of rally in Yen crosses elsewhere. The stage would be set for a retest on 91.16 high. However, sustained trading below 55 day EMA (now at 87.28) will revive near term bearishness and bring retest of 84.65 low instead.

STOCKS

Dow has recovered from the sharp fall seen last week and may continue to move up now while Dax still trades lower but needs to sustain above 15000 to slowly move up. Nikkei needs to sustain above crucial support at 28000 to move up eventually while Shanghai is bullish above 3500. Nifty and Sensex may move up today.

Dow (34326.46, +482.54, +1.43%) has bounced well from levels below 34000 seen last week. A rise to 34500-34750 and towards 35000 can be possible in the near term.

DAX (15156.44, -104.25, -0.68%) has fallen after a sharp bounce from 15000 seen last week. A rise to 15400-15500 cannot be negated if the index sustains above 15000.

Nikkei (28497.57, -273.50, -0.95%) has fallen sharply to test 28500 as expected. Breaking below 28500, we may now look for a test of 28000 which is a strong support and can hold to produce a bounce back to 29000-29500.

Shanghai (3568.17, +31.87, +0.90%) markets are closed till 7th October. While above 3500, view is bullish.

Nifty (17532.05, -86.10, -0.49%) made a low of 17452 before closing above 17500 last week. We expect the support level at 17400\200 to hold and produce a bounce towards 17600 to further see a steady rise towards 18000 in the medium term. A rise in Nifty can be seen today as it is the first week of new contract..

Sensex (58765.58, -360.78, -0.61%) has broken below the support level of 59000,a bounce form the level of 58500-58000 can be seen towards 59000-59500.

COMMODITIES

Crude prices have risen and could be stuck in a sideways range below immediate resistances of $80 on Brent and $76 on WTI. We would wait for price confirmation to indicate that a top is in place for the medium term. Gold has risen well and a sustained trade above 1760 can take it higher to 1780/90 on the upside. Silver can rise to 23-23.50 while above 21.50. Copper is bullish while above 4.05 and can test 4.25/35 soon. Possible sideways trade between respective supports and resistances look likely for now.

Brent (78.97) has immediate support near 77 (moved up from 76 mentioned in the last week) and a possible rise from 77 back to 80 cannot be negated. A range of 77-88 can hold for the very near term before a decline is seen towards 74 or lower in the medium term. As mentioned last week, we need to see a decisive break below 76 to confirm a reversal in Brent. WTI (75.53) on the other hand has immediate resistance near 76 which if holds can keep the price between 76 and 73 for sometime.

Gold (1762.60) if manages to rise above current levels can break above immediate trend resistance and head towards 1780/90 on the upside. On the downside, 1720 continues to hold as important support.

Silver (22.60) has risen well from 21.50 last week and while the bounce sustains, a test of 23-23.50 looks possible followed by a decline again from there.

Copper (4.1870) is holding well above 4.00 and the bounce seen on Friday needs to sustain above 4.25 in order to rise further to 4.35/40, else a dip from 4.25 can take the price down towards 4.05 again in the near term. Watch price action closely near current levels.

FOREX

Mixed view on currencies just now. Pound and Aussie have recovered a bit on Dollar weakness but unless a confirmation is seen that Dollar Index will not rebound to test 94.5 and remain lower, movement in Aussie and Pound could be dicey. Euro has bounced to 1.16 but unless a break above 1.17-1.1750 is seen in the medium term, we keep our bearish view of testing 1.15-1.14 intact. EURJPY may test support at 128 which if holds may produce a bounce to 130.50 else a fall to 127 cannot be negated. USDCNY can be ranged within 6.44-6.47/48. Any break below 6.44 can trigger a fall to 6.41/40. Watch a bounce in Dollar-Rupee from 74.0/10 else we may expect a test of 73.80 on the downside.

Dollar Index (94.04) tested 93.90 before bouncing back from there. If immediate interim support near 93.90/80 holds, we may see yet another rise from here towards 94.50 or higher, which could bring in fresh volatility in other currencies. Else a break below 93.80 is needed for the index to fall. For now watch price action within 93.80-94.50 region.

Euro (1.1598) tested 1.1562 and has bounced from there. It needs to sustain a rise above 1.16 to head higher to 1.1650-1.17 in the near term. Thereafter a fall back to current levels look possible. Any reversal signal will need a break above 1.1750. Till then we continue to keep intact a possible test of 1.15-1.14 in the medium term

EURJPY (128.81) has support near 128 which if holds can produce a bounce to 129-130.50 again in the medium term. Failure to rise from 128 can open chances of a further fall to 127-126. Watch price action near 128 for now.

Dollar-Yen (111.08) has declined sharply from 112.079 seen last week. As resistance near 112 holds, the pair may test 110.80-110.50 before again rising back from there.

Aussie (0.7260) is attempting to move up and can rise towards 0.7320 slowly in the near term. On the downside 0.7170 may hold well.

Pound (1.3539) rose well from 1.34 last week. A possible rise to 1.3650 looks possible before a decline is seen from there.

USDCNY (6.4452) may continue to old within 6.47/48-6.44 range and any break below 6.44 can lead to a fall towards 6.41/40.

USDINR (74.1250) #usdinr-candles-Daily} needs to break above 74.35 to test 74.50 else fall below 74.10/00 to head lower towards 73.80. A broad range of 73.80-74.40/50 and narrow range of 74.00/10-74.30 may hold for now.

INTEREST RATES

The US Treasury Yields have dipped further but have near-term supports which have to be broken to see a much deeper fall and avoid a fresh rise. The German yields have dipped slightly but remain bullish in the near-term to test their long-term resistances and then reverse lower to resume the broader downtrend. The 5Yr and 10Yr GoI are moving up in line with our expectation. They have key resistances ahead which if broken can see an extended rise this week.

The US 2Yr (0.26%), 5Yr (0.93%), 10Yr (1.46%) and the 30Yr (2.03%) %) have dipped further on Friday. The 10Yr sustains below 1.5%. A break below 1.4% from here will negate the chances of seeing 1.6% on the upside and drag it to 1.3% and lower again. The 30Yr must break below 2% to revisit 1.9%-1.8% levels and also negate the chances of seeing 2.1%-2.2% on the upside

The German 2Yr (-0.71), 5Yr (-0.59%), 10Yr (-0.23%) and 30Yr (0.25%) have dipped across tenors on Friday. The near-term view is bullish. The 30Yr can rise to 0.30%-0.35% while it sustains above 0.2%. The 10Yr has an immediate resistance at -0.2% a break above which can take it up to – 0.1%. Thereafter the yields can reverse lower and see a fresh fall.

The Indian 10Yr GoI (6.2436%)rose further to test 6.25% as expected. 6.26% is an important immediate resistance which if broken can take the 10Yr further up to 6.3%-6.32% - a key medium-term resistance. Thereafter a fresh fall is possible.

The 5Yr GoI (5.6899%) is heading up towards 5.7% in line with our expectation. Resistance is at 5.71%-5.72% which will need a watch. A break above can take the 5Yr up to 5.75%-5.76% again.

AUD/NZD is a focus today with RBA and RBNZ featured. It started a rebound since mid September, even though market are expecting RBNZ to hike soon while RBA is still extending it's QE. The reactions to both central banks this week would determine whether the cross has indeed been reversing the down trend.

Technically, the conditions for a bullish reversal are there, with 55 day EMA broken. Also, fall from 1.1042, as a corrective move, has met it's target of 100% projection of 1.1042 to 1.0415 from 1.0944 at 1.0314 already, as well as the medium term channel support. Slight bullish convergence condition is also seen in daily MACD.

On the upside, sustained break of 1.0538 resistance will firstly indicates that fall from 1.0944 has completed. Also, whole fall from 1.1042 might also have finished with three waves down to 1.0278 too. Near term outlook will be turned bullish for an eventual retest on 1.0944/1042 resistance zone. However, failure to break through 1.0538, followed by break of 1.0390 minor support, will bring retest of 1.0278 low, and retain medium term bearishness instead.