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The DAX index has posted losses in the Wednesday session. Currently, the index is trading at 12,428.50 down 0.48% since the Tuesday close. On the release front, German and Eurozone Manufacturing PMIs slowed in January. The German PMI dipped to 60.3, shy of the estimate of 60.6 points. It was a similar story with the Eurozone PMI, which dropped to 58.5, shy of the estimate of 59.2 points. In the US, the key event is the Federal Reserve minutes from the January meeting.

It continues to be a blue February for the DAX, which has declined 6.2% so far this month. The correction on the US stock markets has sent European markets lower, although the DAX managed to gain ground last week, as European corporate earnings were generally strong. Will the stock market volatility resume? The markets are keeping a close eye on the Fed minutes, which could provide a hint of future rate policy. . Recent US numbers have been strong, and inflation indicators have been pointing upwards. This has raised concerns that the Fed may accelerate its pace of hikes, which triggered a sharp correction in global stock markets. The new chair of the Fed, Jerome Powell has tried to reassure the markets that the Fed is monitoring the situation, but it's doubtful that the Fed can do much to prevent volatility in the markets.

It's been a wild, wild ride for Bitcoin, the most popular virtual currency. Bitcoin has fluctuated between $900 and $19,000 over the past years. These wild swings have drawn the attention of policymakers and lawmakers, as there are growing concerns that virtual currencies could have a negative economic impact. France and Germany want to put virtual currencies on the agenda at the next G-20 meeting, and there is bipartisan support in Congress to adopt new rules to regulate virtual currencies. However, Draghi poured cold water on any ECB involvement, saying that it was not the ECB's responsibility to ban or regulate Bitcoin. Draghi added that the ECB was exploring the use of blockchain, a digital technology to monitor bitcoin transactions.

GBPUSD: The pair weakened further on Wednesday opening the door for more declines. Support lies at the 1.3850 level where a break will turn attention to the 1.3800 level. Further down, support lies at the 1.3750 level. Below here will set the stage for more weakness towards the 1.3700 level. Conversely, resistance stands at the 1.3950 levels with a turn above here allowing more strength to build up towards the 1.4000 level. Further out, resistance resides at the 1.4050 level followed by the 1.4100 level. On the whole, GBPUSD looks to correct further lower in the days ahead.

Investors wasted no time in attacking the Pound on Wednesday, after data showed Britain's unemployment rate ticked higher for the first time in nearly two years.

The Office for National Statistics reported that the rate of unemployment rose from 4.3% to 4.4% in the three months to December. Although average weekly wage growth increased by 2.5%, this was broadly in line with market estimates, ultimately offering little support to Sterling. Today's soft U.K labour report has somewhat diluted expectations of a rate hike, and such is reflected in the Pound's bearish price action.

Market players will now direct their attention towards the inflation report hearings this afternoon, where Bank of England Governor Mark Carney will testify before the Parliament Treasury Committee. The testimony could offer a rare opportunity for investors to assess how committed the Bank of England is to raising U.K interest rates this year. With the Pound quite sensitive to monetary policy speculation, comments from Carney and co. during this afternoon's testimony have the ability to create fireworks.

Focusing on the technical picture, the GBPUSD remains exposed to further losses below the 1.4000 resistance level. It is becoming increasingly clear that sustained weakness below 1.4000 could open a path lower towards 1.3850. For bulls to jump back into the game, the 1.4000 level needs to be breached to the upside.

Dollar higher ahead of FOMC meeting minutes

Wednesday's main event risk for the Dollar will be the release of January's FOMC meeting minutes, which is likely to be closely scrutinised for clues on rate hike timings beyond Q1 of 2018.

With U.S job growth solid in January, wages increasing further and inflation rising, expectations have intensified over the Federal Reserve raising U.S interest rates in March. There is a strong possibility that the minutes will signal a March hike and as such, could offer the Dollar further support. Investors are likely to closely scrutinise the meeting minutes for fresh insight on the Federal Reserve's views on inflation and fiscal policy. With the Dollar also falling into the category of currencies that have become sensitive to monetary policy speculation, further upside could be on the cards if the minutes are packaged with a hawkish touch. Alternatively, a surprise appearance by doves could negatively impact the Dollar Index.

Speaking of the Dollar Index, prices ventured higher towards 90.00 during Wednesday's trading session. A decisive daily close above 90.00 could invite an incline higher towards 90.55. A situation where bulls are unable to break above 90.00 could result in a decline back towards 89.50.

The pair extends strong rally from 1.2450 (16 Feb higher low) into fourth straight day and heads towards target at 1.2687 (09 Feb spike high) after breaking through pivotal barrier at 1.2663 (Fibo 61.8% of 1.2920/1.2248 descend.

Close above 1.2663 Fibo barrier will be the second strong bullish signal after bulls surged and close above thick daily cloud on Tuesday.
Further advance faces another significant obstacle at 1.2719 (falling 200SMA), break of which is needed to turn daily MA into full bullish setup and generate another positive signal.

Firmly bullish daily techs are supportive, but bulls may take a breather before break through 1.2687/1.2719 pivots, as negative near-term signal is developing on overbought slow stochastic. Narrow consolidation or mild correction is seen as likely scenario, with broken 100SMA (1.2622) to ideally contain dips.

Res: 1.2687; 1.2719; 1.2761; 1.2800
Sup: 1.2663; 1.2622; 1.2575; 1.2555

The British pound has moved sharply lower against the U.S dollar, following weaker than expected jobs data from the United Kingdom economy. The official UK unemployment rate moved higher for the first time in nearly two-years, causing the GBPUSD pair to tumble back towards the key 1.3930 support level. The macroeconomic calendar remains busy during the U.S trading session, with the release of the U.S Manufacturing PMI and BOE Governor Mark speaking during the UK Inflation Report Hearing.

The GBPUSD pair remains strongly intraday bearish below the 1.3938 level, with further downside towards 1.3901 and 1.3835 increasingly likely.

Should GBPUSD price-action hold the 1.3938 support level, buyers attempt to push price-action back towards the 1.3980 and 1.4000 resistance levels.

The euro has continued to slide lower against the U.S dollar during the European trading session, following weaker than expected monthly eurozone PMI Services and Manufacturing data. The EURUSD pair has found interim daily support around the 1.2307 level, although downside pressures are still building across medium-term RSI and Stochastic indicators. EURUSD traders now look to the release of high-impacting U.S PMI and Housing data, with the FOMC Meeting Minutes the main market moving event later today.

The EURUSD pair remains under selling pressure while trading below the 1.2330 level, intraday support is located at the 1.2292 and 1.2270 support levels.

Should the EURUSD pair hold above the 1.2330 level on a high-time frame basis, price-action may move back towards the 1.2363 and 1.2390 resistance areas.

Daily Pivots: (S1) 106.79; (P) 107.08; (R1) 107.61; More...

USD/JPY is staying well below 108.27 support turned resistance. Rebound from 105.54 is viewed as a corrective move. Intraday bias stays neutral and near term outlook remains bearish. Below 105.54 will extend the larger fall from 118.65 and target 100% projection of 118.65 to 108.12 from 114.73 at 104.20 next. However, break of 107.72 will be the first sign of near term reversal and will target 110.47 resistance for confirmation.

In the bigger picture, current development argues that the corrective pattern from 118.65 is extending. The solid break of 61.8% retracement of 98.97 to 118.65 at 106.48. now suggests that the pattern from 125.85 high is possibly extending. Deeper fall could be seen through 98.97 key support (2016 low). This bearish case will now be favored as long as 110.47 resistance holds.

Daily Pivots: (S1) 0.9303; (P) 0.9336; (R1) 0.9391; More...

In the bigger picture, fall from 1.0342 is developing into a medium term down trend. Deeper decline should be seen to 100% projection of 1.0342 to 0.9420 from 1.0037 at 0.9115. Break will target 161.8% projection at 0.8545. In any case, sustained trading above 55 day EMA is needed to be the first sign of medium term reversal. Otherwise, outlook will stay bearish even in case of strong rebound.

Daily Pivots: (S1) 1.2300; (P) 1.2355 (R1) 1.2392; More....

Despite the pull back from 1.2555, EUR/USD is staying above 1.2205 key support. Intraday bias remains neutral at this point. On the upside, break of 1.2555 will revive the bullish case of up trend resumption and target 100% projection of 1.0569 to 1.2091 from 1.1553 at 1.3075. However, break of 1.2205 will confirm rejection by 1.2516 key fibonacci level and trend reversal.

In the bigger picture, key fibonacci level at 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516 remains intact despite attempts to break. Hence, rise from 1.0339 medium term bottom is still seen as a corrective move for the moment. Rejection from 1.2516 will maintain long term bearish outlook and keep the case for retesting 1.0039 alive. However, sustained break of 1.2516 will carry larger bullish implication and target 61.8% retracement of 1.6039 to 1.0339 at 1.3862.

Daily Pivots: (S1) 1.3942; (P) 1.3983; (R1) 1.4036; More....

GBP/USD's fall from 1.4144 extends lower today but it's so far staying in range of 1.3764/4144. Intraday bias remains neutral first. On the upside, break of 1.4144 will extend the rebound from 1.3764 and target a test on 1.4345 resistance. Break there will resume larger up trend and target long term trend line resistance (now at 1.5105). On the downside, below 1.3764 will extend the correction from 1.4345 to 1.3651 resistance turned support instead.

In the bigger picture, as long as 1.3038 support holds, medium term outlook in GBP/USD will remains bullish. Rise from 1.1946 is at least correcting the long term down from 2007 high at 2.1161. Further rally would be seen back to 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466. However, GBP/USD fails to sustain above 55 month EMA (now at 1.4279) so far. Break of 1.3038 support, will suggests that rise from 1.1946 has completed and will turn outlook bearish for retesting this low.