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The euro remains strongly bullish against the U.S dollar, with price-action now testing around the 1.2500 level after break above key trendline resistance, at 1.2470. Strong PMI Manufacturing data from the across the globe on Thursday helped to underpin risk-off sentiment in financial markets, encouraging euro buying towards 1.2500. The U.S dollar index is also suffering three-days of straight losses, as investors shrug-off hawkish rhetoric coming from Federal Reserve policymakers this week.

The EURUSD pair will likely extend gains while trading above the 1.2470 level, key intraday resistance is found at the 1.2538 and 1.2600 levels.

Should the EURUSD pair start to trade below the 1.2470 level for a sustained period, a decline towards 1.2432 and 1.2385 remains possible.

The pair maintains firm near-term tone on Friday and pressures barrier at 109.88 (50% retracement of 111.48/108.28 downleg / 4-hr cloud top / weekly 100SMA).

Fresh bullish acceleration is again above 10SMA (109.45) after yesterday’s probes failed to close above it.

Bulls need sustained break above 109.88 to signal further recovery which could stretch towards next pivots at 110.25 (Fibo 61.8% of 111.48/108.28) and 110.40 (falling 20SMA).

Underlying bears see risk of fresh downside after current corrective phase is completed with extended upticks to stay under 20SMA.

However, bullish signal is developing on weekly chart as the pair is on track for bullish weekly close, the first after three consecutive weeks in red.

Signal for stronger recovery action would be generated on close above falling 20SMA.

Conversely, repeated daily close below 10SMa will be negative signal and would keep the downside at risk.

US jobs data are due later today and expected to give more clues about dollar’s near-term performance.

Res: 109.88, 110.25, 110.40, 110.72
Sup: 109.45, 109.27, 109.03, 108.59

Thursday's session was market by strong upside momentum that allowed the common European currency to appreciate 96 pips against the Greenback.

The morning was spent with low volatility that seemed to point to a period of consolidation. However, a test of the weekly PP was followed by a notable surge up to the 1.2520 mark as a result of which the Euro surpassed the 1.25 mark and formed a new 1,5-year high.

Bulls might still succeed at pushing the rate slightly higher; however, the weekly R1 at 1.2575 is unlikely to be breached. The base scenario favours the rate approaching the support area formed by the 55-, 100– and 200-hour SMAs in the 1.2440/00 range.

Meanwhile, the following week might mark a breakout of this cluster and a subsequent fall.

The British Sterling was driven by upside risks on Thursday, thus being able to appreciate 75 pips against the US Dollar.

This session, however, was market by low volatility slightly below the post-Brexit-vote high of 1.4213. This northern barrier is expected to hold strong, resulting in a southward pressure towards the 100– and 200-hour SMAs near 1.4157 today. The 55-hour moving average which was located in between the current price and the aforementoned area in the morning could likewise hinder the pair for several hours.

In general, the prevailing ascending channel is expected to surrender, thus allowing the Pound to approach the monthly PP and the 38.20% Fibo retracement at 1.3953. A steeper fall during the following sessions would confirm a double-top-like formation.

The Greenback remained stable against the Yen on Thursday, as it failed to overcome the constraints of the 200-hour SMA and a seven-day resistance at 109.69. This price level and the dashed up-trend line has formed a short-term ascending triangle.

It seems that the rate could be ready to breach this pattern to the upside, especially if the southern barrier is guarded by the weekly PP , the 55– and 200-hour SMAs circa 109.35. Technical indicators are likewise supportive of this scenario, as they demonstrate that some upside potential still exists.

Apart from the 109.69 mark, the nearest resistance is set by the weekly PP and the monthly R1 near 110.35. This area is expected to be the daily high.

Gold spent most of Thursday's trading session below the 1,345.50 mark, as its further appreciation was restricted by the 200-hour SMA. The pair eventually collected enough momentum to dash through this line and the 55– and 100-hour SMAs. As a result, the upper boundary of the short-term ascending channel was breached to the upside.

By Friday morning, the pair had retraced back to the upper channel line. This factor together with bullish technical indicators suggests that the yellow metal is likely to continue its upward momentum in this session, as well, thus accelerating from the 200-hour SMA. The nearest resistance is set by the five-month high and the weekly R1 at 1,365.00 and 1,367.87, respectively

The Sterling rose markedly against the US Dollar ahead the report on the UK manufacturing sector. Thought, weaker-than-anticipated data dampened USD/GBP with the exchange rate falling 11 base points or 0.08% initially.

Britain's manufacturing sector lost some strength in growth momentum last month, as factory activity was held back by common weakness in the country's economy in preparation for Brexit. The Markit/CIPS reported that the UK Manufacturing PMI fell to 55.3 in January, the lowest level in seven months, but still above the 52.7 long-term average. Relatively strong figures suggested that manufacturing outlook is likely to remain bright on behalf of exports.

The ISM Manufacturing PMI release had not prevented a lingering upmove in the EUR/USD exchange rate. The pair added 10 base points to grow further to the 1.2520 level.

The US manufacturing activity weakened in January due to a decrease in new orders, though an unexpected fall in the number of Americans filing for unemployment aid last week indicated lingering job market strength, which could underpin bolster domestic demand. The ISM stated that the US Manufacturing PMI decreased to 59.1 in January from 59.3 in the prior month. The other data showed notable gains in construction spending. Meanwhile, a decrease in worker productivity pointed to more difficult maintenance of strong expansion pace.

EUR/USD

Current level - 1.2504

My outlook is counter-trend below 1.2540, for a reversal and another slide towards 1.2330 major static support. Key intraday support lies at 1.2470.

USD/JPY

Current level - 109.77

The bias is positive again, for a rise towards 110.20 resistance. Crucial on the downside is 109.20 low.

GBP/USD

Current level - 1.4245

My outlook is counter-trend, for a reversal of the current rise below 1.4340 and beginning of a slide towards 1.3910 zone. Trigger on the downside is 1.4180.

Cable eases from recovery top at 1.4277 on Friday as strong three-day rally shows initial signals of fatigue. Daily RSI is overbought and turning lower while bulls are losing momentum which could result in corrective easing before renewed attempts towards targets at 1.4344 (25 Jan peak, the highest since 24 June 2016 Brexit vote) and 1.4385 (falling weekly 200SMA) break of which would generate fresh bullish signal and add to existing positive sentiment. Overall bullish structure favors further advance and extension of broader recovery phase from 1.1930 post-Brexit low. The pair is on track for the seventh straight bullish weekly close that supports the notion. Today's close will be closely watched as red daily candle will be negative signal and could trigger further easing. Ascending 10SMA marks initial support at 1.4140 which is expected to ideally contain and keep near-term focus at the upside. Loss of 10SMA support would signal deeper pullback and would risk retest of key near-term support at 1.40 zone (Fibo 38.2% of 1.3457/1.4344 upleg/near 30 Jan correction low). Sustained break here would generate stronger bearish signal for reversal.

Res: 1.4277, 1.4300, 1.4344, 1.4385
Sup: 1.4207, 1.4159, 1.4140, 1.4093