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The British pound has recovered all of yesterday afternoons trading losses against the U.S dollar hitting 1.3290, after headlines broke that EU chief negotiator, Michel Barnier is ready to offer a two-year transition period after Brexit, if the UK can meet the EU's financial terms.

Intraday trading sentiment surrounding the GBPUSD pair is now bullish, as any progress in Brexit negotiations between the UK and the EU is perceived to be hawkish for the British pound.

Yesterday's the GBPUSD pair managed to close price above the key 1.3220 level, with a bullish close of 1.3264. Buyers are also pushes prices to higher daily high's, signaling further possible gains ahead.

Today's daily and weekly price close will be crucial for determining the sincerity of yesterday's rebound, as traders await a raft of high-impact U.S data later today.

Key intraday technical resistance for the GBPUSD pair is found at 1.3290, 1.3323 and the key 1.3360 level. Above the 1.3360 level, further resistance is found at 1.3395 and 1.3450.

To the downside, key intraday technical support is found at 1.3264 and the former swing-low at 1.3244. Once below 1.3244, further support is found at the daily pivot point, at 1.3225 and the key 1.3200 level.

The EURUSD pair continues to consolidate at the top-end of its weekly range, as traders await Retail Sales and CPI inflation data from the U.S later today. Yesterday the pair slipped back towards the 1.1825 level, as the United States economy released better than expected PPI figures for September.

Intraday trading sentiment surrounding the EURSD pair this Friday remains bullish, as risk-assets continue to rally and the euro still trades comfortably above the key 1.1800 support level.

Technically, the EURUSD pair is trading in a bullish inverse head and shoulder pattern, with a price projection towards 1.1990. The neckline of the pattern is located around the 1.1825 to 1.1833 region.

The validity of the pattern is likely to be tested later today, as the U.S economy releases high-impact economic data, and a host of FED and ECB officials are also due to speak during the upcoming U.S session.

Key intraday support for the EURUSD pair is found at the daily pivot point, at 1.1846 and the current daily low, at 1.1825. Further support is found at the 1.1800 and 1.1770 levels.

To the upside, key intraday resistance is found at 1.1855 and the weekly price high, at 1.1879. Further resistance is found at the 1.1910 level, and the September 25th swing-price high, at 1.1936.

Daily Pivots: (S1) 1.1524; (P) 1.1545; (R1) 1.1557; More....

With 1.1497 minor support intact, further rise is mildly in favor in EUR/CHF for 1.1622 resistance. But still, firm break there is needed to confirm up trend resumption. Otherwise, the consolidation from should continue with risk of at least another fall. Below 1.1450 will turn bias to the downside for 1.1387 and below. Strong support in expect at 1.1257 cluster support (38.2% retracement of 1.0652 to 1.1622 at 1.1251) to contain downside and bring rebound.

In the bigger picture, long term rise from SNB spike low back in 2015 is still in progress. EUR/CHF should now be heading back to prior SNB imposed floor at 1.2000. For now, this will be the favored case as long as 1.1198 resistance turned support holds.

US economic data will make headlines on Friday, giving investors plenty of clues about the health of the world’s largest economy.

The Labor Department will release the Consumer Price Index (CPI) at 12:30 GMT. The report is expected to show a sharp pickup in inflation thanks to rebounding oil prices. Annual CPI is expected to come in at 2.3% in September, up from 1.9% the month before. The core CPI rate, which excludes food and energy, is expected to rise 1.8% year-over-year.

A report on retail sales from the Commerce Department will be released alongside the CPI data. Receipts at retail stores are forecast to rise 1.7% in September, following a 0.2% decline the previous month. Excluding automobiles, sales are expected to climb 0.3%.

The Commerce Department will release its monthly business inventories report at 14:00 GMT. Inventories are expected to rise 0.7% in August after climbing 0.2% the month before.

The University of Michigan will release the preliminary consumer sentiment index at 14:00 GMT. Consumer confidence is forecast to go largely unchanged for the month.

Later in the day, Baker Hughes Inc. will report on the weekly rig count, which has been known to generate volatility in crude prices.

On the central bank circuit, Federal Open Market Committee (FOMC) members Robert Kaplan and Jerome Powell are scheduled to deliver speeches in the afternoon. Federal Reserve Bank of Chicago President Charles Evans will also deliver a speech.

EUR/USD

The euro’s gains moderated on Thursday, as the EUR/USD eased off daily highs of 1.1878. The pair traded within a narrow range during Friday’s Asian session. Initial resistance is being met at the 1.1830-1.1840 level, which corresponds to the 20-day and 55-day moving averages. A close above this level on Friday could generate support back toward the 1.1900 level. On the opposite side of the ledger, immediate support is located at the August low of 1.1662.

GBP/USD

The British pound experienced a series of volatile moves on Thursday. Cable bottomed at 1.3118, the lowest since Monday, before completely reversing losses later in the day. The GBP/USD is currently trading around 1.3260, where it faces immediate support at 1.3200. A break below that level could expose the 1.3120 support area, followed by the 9 October low of 1.3075. On the flipside, resistance is likely to be met north of 1.3300.

US OIL

Oil prices snapped a three-day winning streak on Thursday, as the market consolidated following a series of sharp rallies. US crude prices traded below $51.00 a barrel through the Asian session. The contract remains in a solid buy opportunity over the medium term, but is less attractive on the 15-minute charts. Baker Hughes data on Friday could provide the necessary spark in either direction.

EUR/USD - 1.1826

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.1834

Kijun-Sen level                  : 1.1847

Ichimoku cloud top             : 1.1854

Ichimoku cloud bottom      : 1.1821

Original strategy  :

Buy at 1.1805, Target: 1.1905, Stop: 1.1770

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.1800, Target: 1.1900, Stop: 1.1765

Position : -

Target :  -

Stop : -

Although euro’s retreat from 1.1880 (this week’s high) has retained our view that minor consolidation below this level would be seen and pullback to 1.1800-01 (50% Fibonacci retracement of 1.1719-1.1880 and previous support) cannot be ruled out, reckon downside would be limited and bring another rise later, above 1.1855-60 would signal pullback from said resistance at 1.1880 has ended, bring retest of this level, break there would signal the rise from 1.1669 low has resumed for headway to 1.1895-00 (61.8% Fibonacci retracement of 1.2035-1.1669).

In view of this, would not chase this rise here and we are still looking to buy euro on subsequent pullback as 1.1800-05 should limit downside and bring another rebound. Below minor support at 1.1795 would defer and risk correction to 1.1770 but downside should be limited to 1.1745-50 and price should stay above indicated support at 1.1719, bring another rise later. 

Daily Pivots: (S1) 1.5081; (P) 1.5156; (R1) 1.5197; More....

The sharp fall and break of 1.5108 minor support indicates that EUR/AUD has failed to sustain above 1.5226 resistance. And intraday bias is turned back to the downside for 1.4945 support first. Break there will target 1.4791 support and below. Overall, EUR/AUD could be in a consolidation pattern from 1.5226. Rise from 1.3624 is still expected to resume later.

In the bigger picture, we're holding on to the view that corrective decline from 1.6587 medium term top has completed at 1.3624. Rise from 1.3624 is expected to extend to retest 1.6587. The corrective structure of the price actions from 1.5226 is affirming this view. Above 1.5226 will target a test on 1.6587 key resistance. However, break of 1.4421 support will dampen our view and would drag EUR/AUD lower to retest key support zone around 1.3624.

The GBP/USD increased and climbed above the 1.3289 yesterday’s high and is expected to reach the up sloping red line very soon. Technically is still expected to climb much higher as long is trading within the ascending channel between the 150% and the 250% Fibonacci lines. Only a valid breakdown below the 250% Fibonacci line will announce a broader drop.

USD/JPY - 111.92

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 112.09

Kijun-Sen level                  : 112.16

Ichimoku cloud top             : 112.36

Ichimoku cloud bottom      : 112.36

Original strategy  :

Sell at 112.80, Target: 111.80, Stop: 113.15

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 112.25, Target: 111.25, Stop: 112.60

Position :  -

Target :  -

Stop : -

As dollar has remained under pressure after breaking below this week’s low at 111.99, adding credence to our bearishness and signaling the fall from 113.44 top is still in progress, hence downside bias remains for this move to extend weakness to 111.70-75 (100% projection of 113.44-112.32 measuring from 112.83), below there would bring subsequent decline to 111.47 support but oversold condition would limit downside and reckon 111.11 support would remain intact.

In view of this, we are looking to sell dollar on recovery as 112.25-30 should limit upside and bring another decline. Above resistance at 112.59 would abort and signal low is formed instead, risk a stronger rebound to indicated resistance level at 112.83. 

Price increased a little today and tries to recover after the yesterday’s minor drop. EUR/USD is retesting the median line (ml) of the ascending pitchfork, a false breakout above this obstacle will send the rate down again. Technically, the pair was somehow expected to climb to retest the 1.1910 resistance and the upper median line (uml) of the minor descending pitchfork. Could still develop a Head and Shoulders pattern if will stay below the mentioned resistance levels.

The yellow metal increased in the morning and tries to stay in the green territory. Price is pressuring an important horizontal resistance and seems determined to reach the 1297 yesterday’s high. Price increase as the USDX is still under selling pressure on the short term. The Gold has taken advantage of the weak dollar and has managed to recover after the last corrective phase.

Gold should reach the $1300 per ounce if the United States data will disappoint in the afternoon. You should be careful because we may have some volatility in the US session as the United States is to release the CPI, Core CPI, Core Retail Sales and the Retail Sales data.

The greenback needs a bullish spark from the US economy to be able to increase again, the yellow metal will slip lower if the USDX will start a bullish momentum.

Gold has managed to climb much above the warning line (WL1) of the ascending pitchfork and now if challenging the 23.6% retracement level. A larger rebound will be confirmed only after a valid breakout above the warning line (WL1) of the major descending pitchfork, while a rejection from here and a failure to reach the mentioned dynamic resistance will send the rate tumbling.

The current rebound is natural after the false breakdown below the 61.8% retracement level and below the sliding parallel line (SL).