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GBPJPY extended its rally and successfully breached strong resistance at 153 to hit its highest level since mid-2016 at 153.51. The short-term bullish bias remains intact, however, there is some risk of a pullback since the market has become overextended. Both RSI and the stochastic indicators are now in or close to overbought levels on the 4-hour chart.

There is little change in the bigger picture and GBPJPY remains in a broad consolidation range between 147–153 since mid-September. More signals are needed to indicate that today’s breach above 153 can be sustained. Near-term price action may turn neutral since the market is overbought on the 4-hour chart.

Support is expected at 153 and dropping below it would place the market back in a range, with soft support seen at 152 and 151 ahead of 150.

GBPJPY retains a bullish undertone overall, however the fact that short-term momentum indicators reached overbought levels is suggestive of a potential loss in momentum.

The Canadian Dollar has been appreciating in a channel up against the Yen since mid-December. Along the way, the pair breach the prevailing three-month descending channel. Meanwhile, it has reversed near the dotted line on several occasions within the aforementioned short-term pattern. In case the Loonie fails to breach this line today, a breakout south is likely to occur. In addition, technical indicators show that a surge should not occur within the following week, thus confirming the gradual strengthening of the bearish scenario. In this case, the pair should be sent towards the 200-hour SMA circa 89.55 early next week and maybe even further south down to the monthly PP at 89.94.

GBP/CHF has been trading in a channel down for the last five weeks. The pair was trading along its upper boundary for two sessions prior to breaching this line early today. It could demonstrate a possible breakout; however, this scenario should still be confirmed with more bullish candles, especially given that a breakout of an ascending wedge that occurred on December 28 points to a soon depreciation. Taking this into account, it is expected that the Sterling could still edge slightly higher during the following sessions (possibly up to the 1.3275 area where the monthly PP and the weekly R1 are located), but bears might soon take the upper hand in the market. This should be confirmed by a breakout of the 55-, 200– and 100-hour SMAs circa 1.3210.

In accordance with expectations, the common European currency continued to rise against the Dollar and by the end of the previous has reached the weekly R1 at 1.2074.

In the meantime, the pair has also formed a minor bullish pennant pattern, which presupposes further surge towards the two-year extremum located at the 1.2093 mark. Although today’s release of information on the American labour market provides good opportunity for a breakout, the currency rate is still expected to make a rebound and return back to the rising 55- and 100-hour SMAs. A one-week long junior ascending channel supports this assumption. In addition to that, 54% of pending orders in 50-pip range are set to buy.

Although the ADP released some positive information on employment change yesterday, the Dollar continued to lose value against the Sterling. The surge was mainly driven by the 100-hour SMA, which together with the 55-hour SMA is expected to continue providing support for the pair. As norther side is barrier-free, the cable is expected to spend first half of this trading session tending to reach the weekly R1. An existence of one junior and one medium ascending channels supports the further advance of the Pound. However, whether the pair will manage to bypass the monthly R1 or not will greatly depend on today’s release of the American labour market data. In the meantime, there is a need to take into account that majority of pending orders both in 50- and 100-pip range are set to sell.

Because of release of better than expected information on employment change in the United States, the buck took the lead and in the first hours of this trading session successfully bypassed combined resistance put by the weekly PP and the 200-hour SMA. In larger perspective, the surge should be attributed to junior ascending channel, which guided the pair towards the upper trend-line of a medium scale symmetrical triangle through this week. From trade pattern’s perspective, the pair should make a rebound somewhere near the 113.10 level and resume the downward movement. But since the rate has crossed practically all technical barriers on its way, it has a good chance to break the above pattern and continue to climb towards the weekly R1 at 113.26.

Despite positive developments on the American labour market the bullion continued to advance against buck. The rate has successfully reached resistance zone located between the 1,321 and 1,322 marks. As further road to the north is obstructed by a combination of the weekly R2 and the monthly R1 near the 1,328.4 level the pair is expected to retreat back to the weekly R1 that became additionally secured by the 55-hour SMA. An existence of a minor ascending channel also point out on a plunge in the first half of this trading session. Since the area below the bottom trend-line of the above pattern contains the 100-hour SMA and the 61.8% Fibonacci retracement level, the drop below the 1,311.48 mark seems unlikely. However, it would greatly depend on today’s release of the American macro data.

The Euro versus the US Dollar sustained the position on mostly optimistic US economic data. EUR/USD reached its intraday peak above the 1.2085 level and started to narrow its trading range closer to the 1.2075 area.

The US private companies added 250K positions in December, the strongest monthly gain since March, the ADP Research Institute revealed on Thursday. The figures came in ahead of the official Labour Department’s report, which includes both private and public-sector employment. The jobless rate is expected to remain at 4.1% in the same month. Separately, Markit said that the country’s services sector activity softened at a weaker-than-anticipated pace, with PMI falling from 54.5 to 53.7 points in December, but still in the expansion range.

The Sterling ignored the UK services PMI report, with the GBP/USD currency pair revealing a little initial reaction just after data came in.

Activity in Britain's services sector rose unexpectedly quickly in December, while businesses were more optimistic about the outlook, despite Brexit lingering weigh on investment plans. The Markit/CIPS indicated that the country's services PMI increased to 54.2 in the observed month, the second-strongest rate since April. Along with manufacturing and construction surveys released this week, the economy is expected to reveal up to 0.5% growth in the last quarter of 2017. Meanwhile, consumer spending remained affected by price overheating caused by Brexit vote and weak pay growth.

NZDUSD (0.7158): The New Zealand dollar managed to keep the bullish momentum going as price action was seen testing the target of 0.7160. We expect to see NZDUSD easing from its bullish momentum near this level. Lower support is seen at 0.7062 which could be the immediate downside. The NZDUSD could maintain a sideways range if supported above this level. A break down below could however spell further declines down to 0.6917.