Currency pair GBP/USD

The GBP/USD is in a bearish channel (blue/brown lines) which could be part of a larger complex correction as indicated by the support (green) and resistance (red) trend lines.

The GBP/USD is building an ABC bearish zigzag (orange) within a downtrend channel (brown/blue lines). A break above the 100% Fibonacci level of wave B vs A invalidates the ABC bearish zigzag and indicates a potential bullish breakout scenario above the bearish channel. A break below the support trend line (green) could see price retest the bottom of the channel (blue).

Currency pair EUR/USD

The EUR/USD completed a 2nd wave (blue) as expected near resistance (red) and made one more lower low. The bearish price action however only reached the 100% Fibonacci target of wave 3 vs 1. This could either be explained by the fact that A) price is building an bearish ABC zigzag (not a 123) or price is expanding the wave 3 (blue) via an internal 5 wave (see 1 hour chart).

For the moment the assumption in this 1 hour chart is that the EUR/USD is building a wave 2 (orange) within wave 3 (blue). The invalidation level of this wave count is a break above the 100% Fibonacci level of wave 2 vs 1.

Currency pair USD/JPY

The USD/JPY broke back below the support trend line (dotted blue) and previous top (dotted green) which invalidated a potential bullish 5 wave. The alternative is an ABC (orange) zigzag within a larger wave 4 (purple) correction.

The USD/JPY is building an ABC (orange) bearish zigzag within wave Y (brown).

EUR/USD

Current level - 1.0693

Despite yesterday's rebound after 1.0620 low, my outlook is negative again, for a slide towards 1.0580. Crucial on the upside is 1.0740 high

Profit-taking affects gold curbing silver and platinum

USD/JPY

Current level - 113.57

The break through 114.10 signals a negative bias with a risk of another test at 115.50 lows. Initial intraday resistance lies at 114.10.

GBP/USD

Current level - 1.2500

My outlook here remains negative, for a slide towards 1.2415 support. Resistance is projected at 1.2540

Daily Pivots: (S1) 140.95; (P) 142.78; (R1) 143.89; More...

A temporary top is in place at 144.77 in GBP/JPY and intraday bias is turned neutral first. As long as 140.74 minor support holds, we'd holding on to the bullish view. That is, corrective fall from 148.42 has completed at 136.44 already. On the upside, above 144.77 will target 148.42 high first. Break there will resume whole rise from 122.46 and target 150.42 long term fibonacci level next. On the downside, however, below 140.74 will turn bias to the downside to extend the pattern from 148.42 with another falling leg, possibly through 136.44.

In the bigger picture, price actions from 122.36 medium term bottom are still seen as a corrective pattern even. Main focus is on 38.2% retracement of 195.86 to 122.36 at 150.42. Rejection from there will turn the cross into medium term sideway pattern. Though, sustained break will extend the rebound towards 61.8% retracement at 167.78.

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Daily Pivots: (S1) 121.04; (P) 122.08; (R1) 122.72; More...

Intraday bias in EUR/JPY remains neutral as the sideway consolidation from 124.08 extends. Deeper fall cannot be ruled out. On the downside, below 120.54 will target 118.45 cluster support (38.2% retracement of 109.20 to 124.08 at 118.39). In that case, we'd expect strong support from there to bring rebound. On the upside, break of 124.08 will extend the larger rally from 109.20 to 126.09 key resistance next.

In the bigger picture, price actions from 109.20 medium term bottom are seen as part of a medium term corrective pattern from 149.76. There is prospect of another rise towards 126.09 key resistance level before completion. But even in that case, we'd expect strong resistance between 126.09 and 141.04 to limit upside, at least on first attempt.

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This week was supposed to be dominated by central banks' decisions, earnings, and economic data from across the globe, but with Donald Trump in office, nothing seems capable of taking the spotlight from the White House.

U.S. stocks suffered their steepest declines so far this year with Dow Jones and S&P 500 both declining 0.6% on Tuesday. Meanwhile operating Asian markets are all in red led by Japanese stocks despite the BoJ upgrading growth estimates for the next two years and as expected keeping monetary policy unchanged.

Trump's executive order, signed on Friday banning Syrian refugees and suspending all nationals from seven countries doesn't by itself cause a major risk to financial markets. He already warned to ban Muslims, build a wall, cancel Obamacare, and tear up trade agreements. The President is just literally implementing his agenda and if we were not taking him seriously then it's our fault.

Whether you like President Trump or dislike him, as an investor you seek opportunities, and markets were rallying on the President's commitments to reduce taxes, deregulate businesses, and repatriate global assets. If these policies are at risk, this is when you should get worried.

Many Democrats intensified their attacks on Trump, meanwhile some Republicans are criticising the immigration order, and the firing of the acting attorney-general Sally Yates for opposing his travel ban is pouring fuel to the fire. The major risk looming now is the breakup of the Republican coalition, although this doesn't seem to be the case for the time being. I believe it's going to be the biggest risk to financial markets in the near future, as we end up with protectionist policies without the implementation of fiscal policies, thus triggering a sharp reversal in stocks worldwide.

Daily Pivots: (S1) 1.4096; (P) 1.4155; (R1) 1.4216; More...

EUR/AUD is staying in the sideway pattern from 1.4025 and intraday bias remains neutral. Price action from 1.4025 are seen as a corrective pattern and thus maintain near term bearishness. On the downside, break of 1.4025 will resume the larger fall from 1.6587 to key support level at 1.3671. We'd expect downside to be contained there to bring reversal. On the upside, above 1.4274 minor resistance will turn focus back to 1.4721 resistance.

In the bigger picture, price actions from 1.6587 medium term top are viewed as a consolidative pattern. 50% retracement of 1.1602 to 1.6587 at 1.4095 was already met. While further fall cannot be ruled out, we'd expect strong support above 1.3671 to contain downside and bring rebound. Up trend from 1.1602 should not be finished and will resume later. Break of 1.4721 resistance will be the first sign of resumption of up trend from 1.1602 and target retesting of 1.6587 high first.

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For the 24 hours to 23:00 GMT, the AUD rose 0.09% against the USD and closed at 0.7558.

LME Copper prices rose 0.2% or $10.0/MT to $5857.0/MT. Aluminium prices declined 1.1% or $20.5/MT to $1807.0/MT.

In the Asian session, at GMT0400, the pair is trading at 0.7564, with the AUD trading 0.08% higher against the USD from yesterday’s close.

Overnight data revealed that Australia’s NAB business confidence index advanced to a level of 6.00 in December, compared to a level of 5.0 in the previous month. Moreover, the nation’s NAB business conditions index climbed to a level of 11.0 in December, following a revised reading of 6.0 in the prior month.

The pair is expected to find support at 0.7534, and a fall through could take it to the next support level of 0.7505. The pair is expected to find its first resistance at 0.7582, and a rise through could take it to the next resistance level of 0.7601.

Looking ahead, traders would eye Australia’s AiG performance of manufacturing index for January, scheduled to release later tonight.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

Daily Pivots: (S1) 1.0619; (P) 1.0659; (R1) 1.0682; More...

EUR/CHF's fall continues and intraday bias remains on the downside for 1.0620 support. Decisive break there will confirm resumption of whole fall from 1.1198. In that case, next downside target will be 1.0485 fibonacci level. On the upside, break of 1.0749 resistance is needed to indicate short term bottoming. Otherwise, outlook remain bearish in case of recovery.

In the bigger picture, the decline from 1.1198 is seen as a corrective move. Such correction is still in progress. Sustained trading below 38.2% retracement of 0.9771 to 1.1198 at 1.0653 will target 50% retracement at 1.0485. On the upside, break of 1.0897 resistance is needed to confirm completion of such fall. Otherwise, outlook will stay bearish.

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For the 24 hours to 23:00 GMT, the EUR declined 0.3% against the USD and closed at 1.0699.

Macroeconomic data indicated that Germany's preliminary consumer price index (CPI) jumped 1.9% on an annual basis in January, accelerating at its fastest pace in more than three-years, thus providing further evidence to the European Central Bank (ECB) that its loose monetary policy is working. The CPI recorded an advance of 1.7% in the previous month, while markets were expecting for a rise of 2.0%.

Additionally, the Euro-zone's final consumer confidence index was revised up to a level of -4.7 in January, compared to market consensus for the index to remain steady at a level of -4.9, recorded in the preliminary print. In the prior month, the index had registered a level of -5.1. Moreover, the region's economic sentiment indicator unexpectedly advanced to a level of 108.2 in January, hitting its highest level in six-years, highlighting that businesses and consumers across the Euro-bloc are growing confident about the region's growth prospects. In the preceding month, the index registered a reading of 107.8, while investors had envisaged for a steady reading. Also, the region's industrial confidence index increased to a level of 0.8 in January, notching its highest level since June 2011, compared to a revised flat reading in the prior month.

In the US, data revealed that pending home sales rebounded 1.6% MoM in December, surpassing market expectations for a rise of 1.0% and following a drop of 2.5% in the previous month. Further, the nation's personal spending climbed 0.5% in December, in line with market expectations and recording its biggest increase in three months. Personal spending registered a gain of 0.2% in the prior month. Meanwhile, the US personal income advanced less-than-expected by 0.3% in December, compared to a revised rise of 0.1% in the prior month, whereas markets were anticipating personal income to rise 0.4%. Moreover, the Dallas Fed manufacturing business index unexpectedly climbed to a level of 22.1 in January, compared to market expectations of a fall to a level of 15.0. In the previous month, the index had registered a revised reading of 17.7.

In the Asian session, at GMT0400, the pair is trading at 1.0697, with the EUR trading marginally lower against the USD from yesterday's close.

The pair is expected to find support at 1.0630, and a fall through could take it to the next support level of 1.0563. The pair is expected to find its first resistance at 1.0751, and a rise through could take it to the next resistance level of 1.0805.

Going ahead, market participants will keep a close watch on a speech by the ECB President Mario Draghi, along with a string of crucial economic releases in the Euro-zone, consisting of consumer price index for January, unemployment rate for January and 4Q GDP data, scheduled in a few hours. Also, Germany's retail sales for December and unemployment rate for January, will also pique significant amount of investor attention.

The currency pair is trading above its 20 Hr moving average and showing convergence with its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the GBP declined 0.71% against the USD and closed at 1.2492.

In the Asian session, at GMT0400, the pair is trading at 1.2508, with the GBP trading 0.13% higher against the USD from yesterday's close.

Overnight data showed that UK's GfK consumer confidence unexpectedly improved to a level of -5.0 in January, compared to market expectations of a drop to -8.0 and following a level of -7.0 in the prior month. Also, the nation's Lloyds business barometer index eased to a level of 29.0 in January, compared to a level of 39.0 in the previous month.

The pair is expected to find support at 1.2450, and a fall through could take it to the next support level of 1.2392. The pair is expected to find its first resistance at 1.2578, and a rise through could take it to the next resistance level of 1.2648.

Moving ahead, UK's consumer credit and mortgage approvals data, both for December, scheduled to release in a few hours, will keep investors on their toes.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.