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Cable eases from one-month high in European trading on Thursday after being inflated by fresh risk appetite on unclear signals from Fed that prompted investors out of dollar.

Although the Fed raised interest rates by 0.75% as expected, Chief Powell missed to deliver an information about the size of the next rate hike that made a number of traders to believe that the period of aggressive approach to policy tightening is likely over and the US central bank is going to start reducing the size of hikes.

The action is struggling at pivotal Fibo resistance at 1.2159 (61.8% of 1.2406/1.1760), despite Wednesday’s 1.07% rally and threatening of recovery stall here that would complete a bull-trap and increase downside risk.

Negative scenario, however, would require more evidence to be confirmed, with initial bearish signal expected on break of Fibo support at 1.2089 (23.6% of 1.1760/1.2191 recovery leg), with extension through key support at 1.2026 (Fibo 38.2% / daily Tenkan-sen to signal lower top at 1.2191 and reversal.

Conversely, sustained break of Fibo barrier at 1.2159 would strengthen near-term structure, but bulls would face more headwinds from the base of thick daily cloud (1.2235).

Res: 1.2191;1.2235; 1.2253; 1.2332.
Sup: 1.2089; 1.2000; 1.1976; 1.1925.

• EURGBP broke key support level 0.8400
• Likely to fall to support level 0.8350

EURGBP currency pair recently broke the key support level 0.8400 (which has been reversing the pair from the middle of May) intersecting with the 61.8% Fibonacci correction of the upward price move from April.

The breakout of the support level 0.8400 accelerated the active minor impulse wave 1 – which belongs to the higher order impulse wave (C) from last week.

EURGBP can be expected to fall further toward the next support level 0.8350 (target price for the completion of the active minor impulse wave 1).

• AUDNZD reversed from resistance level 1.1165
• Likely to fall to support level 1.1100

AUDNZD currency pair recently reversed down from the pivotal resistance level 1.1165 (former strong resistance from the start of June).

The downward reversal from the resistance level 1.1165 stopped the earlier minor impulse wave 3 – which belongs to the higher order impulse sequence (5) from May.

Given the strength of the resistance level 1.1165, AUDNZD can be expected to fall further toward the next support level 1.1100.

• GBPCHF broke daily down channel
• Likely to rise to resistance level 1.1770

GBPCHF continues to rise after the earlier breakout of the resistance trendline of the daily down channel from the start of July – which accelerated the active correction (iv).

The breakout of the down channel follows the earlier upward reversal from the key support level 1.1530 (which has been reversing the pair from the start of July).

GBPCHF can be expected to rise further toward the next resistance level 1.1770 (top of the previous minor correction (iv)).

The Euro reduced speed on Thursday after post-Fed 0.83% jump and still holding below pivotal Fibo barrier at 1.0270 (38.2% of 1.0786/0.9952 descend) where bulls were trapped last week.

Support from unclear signals about the size of Fed’s rate hikes in coming policy meetings that disappointed many and deflated dollar, is likely to be short-lived.

The Euro remains very vulnerable to weak economic data from the EU and growing concerns about gas supply shortage that may limit the recovery.

Unless the action makes a clear break above 1.0270 pivot that would improve near-term structure and spark further advance, the downside is likely to remain at risk, with loss of 1.0100 zone trough (July 26/27 lows) to open way for fresh attack at parity level and retest of 20-year low at 0.9952 (July 14).

Daily studies remain bearishly aligned overall, though momentum has strengthened and probing into positive territory, but risk is expected to remain skewed to the downside as long as action holds below 1.0270.

Slightly better than expected German CPI data and hints that inflation may have peaked, with focus on US GDP data, due later today, which is expected to provide fresh signal.

Res: 1.0234; 1.0270; 1.0293; 1.0349.
Sup: 1.0185; 1.0149; 1.0096; 1.0000.

Eurozone Economic Sentiment Indicator dropped from 103.5 to 99.0 in July. Industrial confidence dropped from 7.0 to 3.5. Services confidence dropped from 104.1 to 10.7. Consumer confidence dropped from -23.8 to -27.0. Retail trade confidence dropped from -5.2 to -6.8. Construction confidence dropped from 103.5 to 99.0. Employment Expectations Indicator dropped from 110.2 to 107.0.

EU Economic Sentiment Indicator dropped from 101.8 to 97.6. Employment Expectations Indicator dropped from 110.2 to 106.6. In the EU, the drop in the ESI in July was due to significant losses in industry, services, retail trade and consumer confidence, whereas confidence in construction decreased more mildly. The ESI fell markedly in four out of the six largest EU economies, Spain (-5.0), Germany (-4.9), Italy (-3.4) and Poland (-3.2), while it remained broadly stable in France (-0.1) and the Netherlands (+0.2).

Full release here.

Daily Pivots: (S1) 165.07; (P) 165.70; (R1) 166.75; More...

Intraday bias in GBP/JPY remains neutral and outlook is unchanged. Corrective pattern from 168.67 could still extend further. Below 162.98 minor support will target 160.37. Nevertheless, break of 166.23 will bring retest of 168.67 high instead. And, larger up trend might be ready to resume in this case.

In the bigger picture, up trend from 123.94 (2020 low) is still in progress. Sustained break of 61.8% retracement of 195.86 (2015 high) to 122.75 (2016 low) at 167.93 will be a long term bullish signal, and could pave the way back to 195.86 high. This will now remain the favored case as long as 155.57 support holds, even in case of deep pull back.

Daily Pivots: (S1) 138.70; (P) 139.10; (R1) 139.77; More....

Intraday bias in EUR/JPY stays mildly on the downside. Current decline from is seen as a falling leg inside the corrective pattern from 144.23. Deeper decline would be seen to 136.85 support. On the upside, above 140.06 minor resistance will turn bias back to the upside for 142.31 resistance instead.

In the bigger picture, up trend from 114.42 (2020 low) is seen as the third leg of the pattern from 109.30 (2016 low). Further rally is in favor as long as 134.11 resistance turned support holds, even in case of deep pull back. Next target is 149.76 (2015 high). However, sustained break of 134.11 will be a sign of medium term bearish reversal and turn focus to 124.37 support for confirmation.

Daily Pivots: (S1) 0.8369; (P) 0.8397; (R1) 0.8419; More...

EUR/GBP's fall from 0.8720 resumed by breaking through 0.8401 support. The development also affirms the case of rejection by 0.8697 fibonacci level. Intraday bias stays on the downside for deeper fall to 0.8720 low. On the upside, above 0.8424 minor resistance will turn intraday bias neutral first. But risk will now stay on the downside as long as 0.8585 resistance holds.

In the bigger picture, attention remains on 38.2% retracement of 0.9499 to 0.8201 at 0.8697. Sustained break there will affirm the case that rise from 0.8201 is a medium term up trend itself. Further rally would then be seen to 61.8% retracement at 0.9003. However, rejection by 0.8697 will confirm medium term bearishness for another fall through 0.8201.

Daily Pivots: (S1) 1.4546; (P) 1.4607; (R1) 1.4644; More...

Intraday bias in EUR/AUD remains on the downside and outlook is unchanged. Fall from 1.5396 should target a test on 1.4318 low next. Decisive break there will resume larger down trend. On the upside, above 1.4803 minor resistance will turn intraday bias neutral, and bring consolidations first, before staging another decline.

In the bigger picture, rejection by 1.5354 support turned resistance, as well as 55 week EMA (now at 1.5378), maintain medium term bearishness. That is, larger down trend from 1.9799 is not completed yet. Break of 1.4318 low will target 61.8% projection of 1.9799 to 1.5250 from 1.6434 at 1.3623, which is close to 1.3624 long term support (2017 low). This will remain the favored case now as long as 1.5396 resistance holds.