'The single currency remains the most undervalued among its Group-of-10 peers, according to an OECD measure of purchasing-power parity.' – Stefania Spezzati and Vassilis Karamanis, Bloomberg

Pair's Outlook

During the early hours of Wednesday's trading session the common European currency was still in a retreat against the US Dollar. The retreat began on Tuesday, as the currency exchange rate hit the upper trend line of the long term descending channel, in which the pair has been trading since the end of March. In addition, on Wednesday morning just below the trend line the 100-day SMA at 1.0797 is keeping the pair lower. It is most likely that the rate will retreat back to the weekly R1, which is located at 1.0761.

Traders' Sentiment

SWFX traders continue to be bearish regarding the pair, as 57% of trader open positions are short on Wednesday. In the meantime, 59% of trader set up orders are set up to sell the Euro.

'We think that price developments so far this year, together with investors realizing that there has to be a significant risk premium priced into the USD and the recent noteworthy shift towards a 'weak dollar policy' suggest that the risks for a deeper correction lower in the US currency are increasing.' – UniCredit Research (based on PoundSterlingLive)

Pair's Outlook

The GBP/USD pair managed to erase most of Monday's losses yesterday, but with the 1.26 mark once again providing sufficient resistance, preventing the Cable from edging further up. Today the Pound could go sideways, with the 100-day SMA at 1.2481 expected to limit any possible losses. However, technical studies suggest a positive development could occur, in which case the main target will be the 1.27 mark, where the 23.60% FIbo, the weekly R1 and the upper Bollinger band form relatively strong resistance. The given pair is unlikely to surge significantly beyond 1.26, unless weak US fundamentals provide sufficient impetus today.

Traders' Sentiment

Now 63% of traders are long the Sterling (previously 60%), whereas 56% of all pending orders are to acquire the Pound (up from 45%).

'It is becoming clear that the Trump administration is one that will pursue a weaker dollar and criticise the currency policies of others. Under such conditions, U.S. yields and the dollar are losing their correlation. Any rise in yields resulting from monetary policy expectations will no longer be able to support the dollar as much.' – Barclays (based on Reuters)

Pair's Outlook

The Greenback experienced another leg down yesterday, having once again lost nearly 100 pips against the Japanese Yen. However, the exchange rate closed above the 112.60 psychological support level, which should technically now cause a U-turn. Technical indicators, on the other hand, are giving bearish signals, and the 20-day SMA recently crossed the 55-day one to the downside-also providing a sell signal. As a result, downside risks are relatively high today, in which case price could fall even below the 112.00 mark. With a lot of uncertainty present in the markets recently, we should not rule out the possibility of bulls taking over, but with the 115.00 handle remaining intact.

Traders' Sentiment

Today 53% of all open positions are long and 59% of all pending orders are to buy the Buck (previously 49% and 53%, respectively).

'What Trump does is beyond our expectations and people are kind of playing it safe by holding gold positions and waiting to see what happens in other markets.' – Yuichi Ikemizu, Standard Bank (based on Reuters)

Pair's Outlook

After reaching the 1,215 mark during Tuesday's trading session, the yellow metal began a retreat, which continued to last into Wednesday's trading. From a technical perspective, the yellow metal has no support until the level of 1,196.86 on the daily chart. Due to that and the fact that it previously attempted to break through the weekly R1 at 1,213.16 more than once before the retreat, it can be assumed that the bullion is set to lose value by the end of the day, in the process retreating to the weekly PP.

Traders' Sentiment

Traders have become slightly bullish, as 52% of trader open positions are long on Wednesday. Meanwhile, 63% of trader set up orders are to buy the metal.

The Aussie regained traction and tested 0.7600 barrier on yesterday's bullish acceleration.

Repeated downside rejections above key 200SMA support and subsequent bounce sidelined immediate downside risk.

However, the pair remains without clear direction while holding within 0.7510/0.7690 range.

Near-term studies improved and along with bullish daily technicals, turned near-term focus higher.

Firm break above 0.7600 zone is needed to signal bullish continuation and open immediate target at 0.7630 (Fibo 76.4% of 0.7776/0.7158 descend).

Long bullish monthly candle that was formed in January, supports bullish scenario, with freshly formed 20/200SMA's Golden Cross, underpinning the action.

Res: 0.7607, 0.7630, 0.7700, 0.7776
Sup: 0.7558, 0.7510, 0.7497, 0.7467

Probe below strong supports at 112.50 base on yesterday’s acceleration lower was so far seen as false break.

Quick recovery that closed above 112.50 trigger and subsequent extension to 113.60 sidelined immediate downside risk.

However, daily techs remain in strong bearish setup and maintain risk for fresh attempts lower.

Falling daily Tenkan-sen marks initial barrier at 113.72 and stays intact for now, with extended upticks seen towards 114.10 (Fibo 61.8% of 115.36/112.06 downleg).

Renewed attack at 112.50 base and 112.00 zone (yesterday’s low / Fibo 38.2% of 101.17/118.65 ascend) require clear break lower to resume bear-leg from 118.65/59 double-top and expose psychological 110.00 support.

Conversely, sustained lift above 114.56 (Fibo 38.2% of 118.59/112.06 downleg) would turn near-term focus higher and increase risk of retesting key barriers at 115.33 (daily Kijun-sen) and 116.02 (daily cloud top).

Res: 113.60, 113.72, 114.10, 114.58
Sup: 113.07, 112.62, 112.50, 111.97

Yesterday's strong bounce from significant support at 1.2409 that returned near the upper pivot at 1.2600 zone, has sidelined growing downside risk. Long-body and long-tailed daily candle that was formed yesterday, underpins fresh recovery which requires firm break above 1.2600 resistance zone to generate fresh bullish signal for extension towards key n/t barrier at 1.2671 (26 Jan peak). Daily studies in firm bullish setup support scenario. Rising daily Tenkan-sen marks strong support at 1.2465 which is expected to contain corrective dips. Daily cloud that twisted today and is thickening (currently spanned between 1.2419 and 1.2426), along with 1.2409 (Fibo 38.2% of 1.1986/1.2671, reinforced by 55SMA), mark breakpoints, loss of which would bring bears back to play.

Res: 1.2589, 1.2603, 1.2671, 1.2726
Sup: 1.2541, 1.2510, 1.2465, 1.2426

The Euro peaked above 1.0800 barrier on yesterday's strong rally and hit the highest levels since early Dec. Eventual close above former top at 1.0773 was bullish signal for final stretch towards next layers of strong resistances at 1.0818/24 (50% retracement of 1.1298/1.0339/daily Ichimoku cloud top). Sustained break here is needed to reinforce bullish stance for extension of bull-leg from 1.0339 (03 Jan low) towards 1.0872 (08 Dec high), possibly to 1.0931 (Fibo 61.8% of 1.1298/1.0339). Falling 100SMA capped rally for now (currently at 1.0796), but overall bullish setup of daily studies remains supportive for further upside. Corrective dips on overbought near-term studies should be ideally contained above rising daily Tenkan-sen (currently at 1.0715) also 50% of 1.0618/1.0810, 30/31 Jan upleg). Firm break below 1.0700 zone would weaken the structure and increase downside risk. Fed policy meeting results are in focus today.

Res: 1.0810, 1.0824, 1.0872, 1.0900
Sup: 1.0773, 1.0737, 1.0715, 1.0690

EUR/USD

Current level - 10778

The breakthrough the crucial 1.0740 signals a positive bias, for a rise towards 1.0870 resistance zone. Initial intraday support lies at 1.0770, followed by 1.0740.

Profit-taking affects gold curbing silver and platinum

USD/JPY

Current level - 113.30

My outlook here is negative, for another slide towards 111.40 support zone. Crucial on the upside is 114.00 hurdle.

GBP/USD

Current level - 1.2553

Yesterday's failure at 1.2415 signals a reversal and the outlook is bullish, for a rise towards 1.2670, en route to 1.2770. Key support lies at 1.2515.

On the 4h EUR/USD chart we are tracking a corrective bounce from December lows, labeled as an expanded flat correction. It's a contra-trend movement in three waves which can still be in the making, as recent overnight rally suggests that wave C of 4) is still incomplete. That said we see a potential turning point around the 161.8 Fibonacci ratio, where bulls can slow down and bears take over control.

EURUSD, 4H