Sample Category Title

Cable is trading within narrow range in early Wednesday's trading and showing signs of stall of three-day recovery leg from 1.2559 low, as bulls face strong headwinds from 1.2700/08 barriers (round-figure/Fibo 23.6% of 1.3179).

Tuesday's action closed below 1.2700 handle despite upticks to 1.2714, with similar picture seen in early European trading on Wednesday.

Conflicting daily indicators (north-heading momentum/overbought stochastic/sideways- moving RSI and mixed setup of MA's) add to scenario.

Mild immediate reaction was seen on speech from BoE's Ramsden, with focus on UK Services PMI data (May 50.6 f/c vs 50.4 prev).

Any surprise under 50 threshold would increase pressure on sterling and risk stronger signal of recovery stall. Conversely, upbeat results could boost pound in addition to dovish Fed deflated the greenback.

Res: 1.2723, 1.2746, 1.2796, 1.2810
Sup: 1.2690, 1.2662, 1.2610, 1.2559

The Euro remains at the front foot in early Wednesday's trading and attempts again towards key barriers provided by daily cloud top, 100SMA and 50% retracement of 1.1448/1.1107 fall (1.1277/79) where Tuesday's attack was strongly rejected. The Euro regained traction after dipping to 1.1226 (Tuesday's low) as dollar weakened further on dovish signals from top Fed officials.

Fed Chairman Powell changed his rhetoric from patient approach to rate decision, saying that the central bank will respond as appropriate on rising risk to trade and global growth.

Strong bullish momentum on daily chart justifies the bullish stance, but overbought stochastic and sideways-moving RSI sour the sentiment and warn of possible repeated upside rejection.

The pair may hold in extended consolidation in case bulls fail again to clear 1.1277/79 pivots, with bullish bias in play while the price holds above broken 55SMA (1.1217). Strong bearish signal can be expected on sustained break below 55 SMA and daily cloud base (1.1202). Bullish scenario requires firm break higher to signal continuation and expose 1.1318/23 (Fibo 61.8%/mid-Apr lower platform. Services PMI's from EU members are among key data from the Eurozone today and may provide fresh signals, although forecasts are in line with previous releases.

Res: 1.1279, 1.1323, 1.1367, 1.1373
Sup: 1.1250, 1.1237, 1.1217, 1.1202

Daily Pivots: (S1) 136.77; (P) 137.12; (R1) 137.70; More...

With current recovery and bullish convergence condition in 4 hour MACD, a short term bottom should be formed at 136.55. Intraday bias in GBP/JPY is turned neutral for some consolidations first. Stronger recovery could be seen but upside should be limited by 38.2% retracement of 146.50 to 136.55 at 140.35 to limit upside to bring fall resumption. On the downside, break of 136.55 will turn bias to the downside and extend the fall from 148.87 to 131.51 low.

In the bigger picture, current development suggests that GBP/JPY medium term fall from 156.59 (2018 high) is still in progress. Break of 131.51 will target 122.36 (2016 low). Structure of such decline is corrective looking so far, arguing that it's just the second leg of consolidation from 122.36. Thus, we'd expect strong support from 122.36 to contain downside to bring reversal.

Pivot (invalidation): 108.00

Our preference Long positions above 108.00 with targets at 108.25 & 108.35 in extension.

Alternative scenario Below 108.00 look for further downside with 107.80 & 107.55 as targets.

Comment Intraday technical indicators are mixed and call for caution.

Pivot (invalidation): 1.2685

Our preference Long positions above 1.2685 with targets at 1.2715 & 1.2740 in extension.

Alternative scenario Below 1.2685 look for further downside with 1.2670 & 1.2650 as targets.

Comment The RSI shows upside momentum.

Pivot (invalidation): 1.1245

Our preference Long positions above 1.1245 with targets at 1.1275 & 1.1290 in extension.

Alternative scenario Below 1.1245 look for further downside with 1.1230 & 1.1210 as targets.

Comment The RSI advocates for further upside.

Pivot (invalidation): 5.7920

Our preference Short positions below 5.7920 with targets at 5.7450 & 5.7210 in extension.

Alternative scenario Above 5.7920 look for further upside with 5.8270 & 5.8590 as targets.

Comment The upward potential is likely to be limited by the resistance at 5.7920.

Daily Pivots: (S1) 121.39; (P) 121.60; (R1) 121.89; More....

EUR/JPY's recovery from 120.78 extends higher today but we'd still see it as a correction. Thus, intraday bias remains neutral and upside should be limited below 123.73 resistance to bring fall resumption. On the downside, break of 120.78 will resume the fall from 127.50 and target 118.62 low next.

In the bigger picture, down trend from 137.49 is still in progress with the cross staying inside long term falling channel. Break of 118.62 will extend the fall to 109.48 (2016 low). On the upside, break of 123.73 resistance is needed to be the first sign of medium term reversal. Otherwise, outlook will remain bearish in case of strong rebound.

Pivot (invalidation): 0.6985

Our preference Long positions above 0.6985 with targets at 0.7005 & 0.7025 in extension.

Alternative scenario Below 0.6985 look for further downside with 0.6970 & 0.6955 as targets.

Comment A support base at 0.6985 has formed and has allowed for a temporary stabilisation.

Pivot (invalidation): 1.3415

Our preference Short positions below 1.3415 with targets at 1.3350 & 1.3330 in extension.

Alternative scenario Above 1.3415 look for further upside with 1.3450 & 1.3480 as targets.

Comment The RSI lacks upward momentum.