More tension between the US and China

GBPUSD – technical overview

The market has seen a recovery out from the lowest levels since 2016, with the price recovering back above the daily Ichimoku cloud to take the immediate pressure off the downside. Ultimately, only back below the bottom of the daily Ichimoku cloud would compromise the more constructive outlook for the major pair. Next key resistance comes in the form of the 2019 high from March around 1.3380. Setbacks should ideally be well supported ahead of 1.2400.

• R2 1.3013 – 21 october high – Strong
• R1 1.2985 – 18 November high – Medium
• S1 1.2867 – 15 November low – Medium
• S2 1.2769 – 8 November low – Strong

GBPUSD – fundamental overview

We've seen a minor round of profit taking kick in as the election nears, though whatever we have seen thus far, hasn't been much. On Tuesday, CBI trends data came in a little better than expected. There is no first tier data scheduled on Wednesday in the UK or US. Instead, the focus will be on UK election related updates and the Fed Minutes late in the day.

USDJPY – technical overview

The longer-term downtrend remains firmly intact, with the major pair recently taking out major support in the form of the 2018 and 2019 lows respectively. Rallies should continue to be well capped below 110.00 in favour of  the next major downside extension towards the 2016 low at 99.00.

• R2 110.00 – Psychological – Strong
• R1 109.49 – 7 November high – Strong
• S1 108.24 – 14 November low – Medium
• S2 107.89 – 1 November low  – Strong

USDJPY – fundamental overview

BoJ Kuorda said policymakers don't think the 2% inflation target will be reached next year and the central bank 'would consider easing,' including lower negative rates, if risks arise and 'will continue with powerful monetary easing'. Japanese Finance Minister Taro Aso said FY2019 tax revenues 'may be smaller than estimated'. Japan reported a big trade balance miss on Wednesday, though this hasn't had much of an impact on price action. Most of the movement in the Yen has ultimately been more about risk off flow following the latest US Senate Bill on Hong Kong and China's retaliation threat. Looking ahead, the Fed Minutes are due late in the day and will be the highlight. Otherwise, the market will continue to monitor developments from the US-China trade front.

EURCHF – technical overview

The market remains very well capped into offers and the medium-term picture continues to favour the downside. A break back above 1.1060 would be required to take the immediate pressure off the downside. Below 1.0800 exposes the 1.0600 area.

• R2 1.1173 – 2 July high – Strong
• R1 1.1060 – 17 October high – Medium
• S1 1.0864 – 14 November low – Medium
• S2 1.0811 – 4 September/2019 low – Strong

EURCHF – fundamental overview

The SNB remains uncomfortable with Franc appreciation and continues to remind the market it will need to be careful about any attempts at trying to force an appreciation in the currency. But the SNB will also need to be careful right now, as its strategy to weaken the Franc is facing headwinds from a less certain global outlook. Any signs of sustained risk liquidation, will likely invite a very large wave of demand for the Franc that will put the SNB in the more challenging position of needing to back up its talk with action, that ultimately, may not prove to be as effective as it once was, given where we're at in the monetary policy cycle.

AUDUSD – technical overview

The market has been under pressure over the past several months, but has also been well supported on dips. The price action suggests we could be seeing the formation of a major base, though it would take a clear break back above 0.7100 to strengthen this outlook. In the interim, look for setbacks to continue to be well supported above 0.6700 on a weekly close basis.

• R2 0.6930 – 31 October high – Strong
• R1 0.6842 – 14 November high – Strong
• S1 0.6770 – 14 November low – Medium
• S2 0.6710 – 10 October low – Strong

AUDUSD – fundamental overview

Aussie price action is being dictated by bigger picture macro themes into Wednesday. The news of the U.S. Senate's unanimous passing of a bill backing protesters in HK and China's subsequent threat to retaliate has shaken investor sentiment, weighing on the risk correlated, China correlated commodity currency. There was no reaction to the release of second tier Aussie data. Looking ahead, the Fed Minutes are the feature standout on the calendar for the remainder of the day. Otherwise, the market will continue to monitor developments from the US-China trade front.

USDCAD – technical overview

The longer-term structure remains constructive, with dips expected to be well supported for renewed upside, eventually back above the 2018/multi-month high at 1.3665. At this point, only a weekly close below the psychological barrier at 1.3000 would compromise this outlook.

• R2 1.3348 – 3 October high – Medium
• R1 1.3300 - Figure – Medium
• S1 1.3198 – 18 November low – Medium
• S2 1.3160 – 7 November low – Strong

USDCAD – fundamental overview

The Canadian Dollar didn't get much help from Canada manufacturing sales that declined less than expected. Instead, the Loonie was under pressure on comments from Bank of Canada Wilkins. The central banker said the BoC 'still had room to maneuver with interest rates' at 1.75%, trade policy uncertainty 'remained high,' and lower oil prices 'continued to weigh on energy-producing provinces.' Looking ahead, key standouts on the Wednesday calendar come in the form of Canada inflation data and the Fed Minutes.

NZDUSD – technical overview

Despite recent weakness, there's a case to be made for a meaningful bottom, with the market rallying out from longer-term cycle low area around 0.6200. As such, look for setbacks to be well supported in the days ahead, in anticipation of a continued recovery. Only a weekly close below 0.6200 would give reason for rethink. Back above 0.6451 will strengthen the outlook and take the immediate pressure off the downside.

• R2 0.6466 – 4 November high – Strong
• R1 0.6437 –  19 November high – Medium
• S1 0.6322 – 8 November low – Medium
• S2 0.6241 – 16 October low – Strong

NZDUSD – fundamental overview

Tuesday's GDT auction produced a solid positive result, though Kiwi hasn't been able to do too much with it, as it faces headwinds from risk liquidation flow. The news of the U.S. Senate's unanimous passing of a bill backing protesters in HK and China's subsequent threat to retaliate has shaken investor sentiment, weighing on risk correlated currencies. Looking ahead, the only standout event on the calendar is the Fed Minutes late in the day. Otherwise, the market will continue to monitor developments from the US-China trade front.

US SPX 500 – technical overview

There have been signs of a major longer term top, after an exceptional run over the past decade. Any rallies from here, are expected to be very well capped, in favour of renewed weakness targeting an eventual retest of strong longer-term previous resistance turned support in the form of the 2015 high at 2140. The initial level of major support comes in at 2854, with a break below to strengthen the outlook. A monthly close above 3100 would be required to compromise the outlook.

• R2 3150 – Psychological – Strong
• R1 3133 – 19 November/Record high – Medium
• S1 2854 – 3 October low – Medium
• S2 2777 – 6 August low – Strong

US SPX 500 – fundamental overview

Although we've seen the market extending to fresh record highs in 2019, with so little room for additional central bank accommodation, given an already depressed interest rate environment, the prospect for a meaningful extension of this record run, on easy money policy incentives, should no longer be as enticing to investors as it once was. Meanwhile, tension on the global trade front should continue to be a drag on investor sentiment despite any signs that would suggest otherwise. We recommend keeping a much closer eye on the equities to ten year yield comparative going forward, as the movement here is something that could be a major stress to the financial markets looking out.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, and suggests the market is in the early stages of a bullish move that follows a multi-month consolidation. The next major level of resistance comes in around 1600, while in the interim, look for any setbacks to be well supported above 1400.

• R2 1558 – 4 September/2019 high – Strong
• R1 1536 – 24 September high – Medium
• S1 1445 – 12 November low – Medium
• S2 1400 – Psychological – Strong

GOLD (SPOT) – fundamental overview

The yellow metal continues to be well supported on dips with solid demand from medium and longer-term accounts. These players are more concerned about exhausted monetary policy, extended global equities, political uncertainty, systemic risk and trade war threats. All of this should keep the commodity well supported, with many market participants also fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an unnerving climax.

BTCUSD – technical overview

The market continues to consolidate in the aftermath of a major surge in the second quarter of 2019. However, any setbacks should be very well supported ahead of 7,000, with an higher low sought out in favour of a bullish continuation back above the 2019 high and towards the record high from late 2017 further up. Ultimately, only a weekly close below 7,000 would compromise the constructive outlook.

• R2 10,468– 26 October high – Strong
• R1 9,612 – 4 November high – Medium
• S1 8,000 – Psychological – Medium
• S2 7,326 – 23 October low – Strong

BTCUSD – fundamental overview

Bitcoin is going through a period of technical adjustment after the fierce Q2 run up, though we anticipate continued demand from institutional players starved for yield in a world where global equities are increasingly vulnerable. Plenty of demand is reported on dips down towards $7,000.

BTCUSD - Technical charts in detail

ETHUSD – technical overview

The market is in the process of a major correction after a surge in the second quarter of 2019. Look for setbacks to be well supported above of previous resistance turned support at 100 on a weekly close basis, in favour of the next major higher low and bullish resumption back towards and through the 2019 high up at 363. Ultimately, only a weekly close below 100 would compromise the outlook.

• R2 225 – 19 September high – Strong
• R1 200 – Psychological – Medium
• S1 168 – 18 October low – Medium
• S2 153 – 23 October low  – Strong

ETHUSD – fundamental overview

Profit taking in the aftermath of the rapid Q2 appreciation has triggered a healthy period of correction and consolidation, while critique of the space from the likes of President Trump and Fed Chair Powell, along with worry associated with fallout in the global economy, are stories that could continue to keep the more risk correlated crypto asset weighed down into the end of the year. Risk off in the global economy is expected to result in ETH underperformance relative to Bitcoin.