Sample Category Title

Sterling stands at the front foot in early Friday's trading and attempts to extend recovery from Thursday's spike low at 1.3004. Fresh bulls probe through pivotal barrier at 1.3148 (Fibo 38.2% of 1.3381/1.3004 descend) clear break of which would allow for further recovery and possible test of converged 20/10SMA's (1.3191/1.3207), former strong support, now reverted to solid resistance. Thick 4-hr cloud (spanned between 1.3170 and 1.3222) also marks strong obstacle and weighs on near-term action. Surprise positive reaction on EU's approval of Brexit delay (initially to 12 Apr, with possible extension to 22 May) pushed sterling from dangerous zone (200SMA / 11 Mar trough at 1.2982/60 respectively) but the downside remains vulnerable due to persisting uncertainty. PM May faces tough work in coming days as chances of eventually passing her plan through the parliament remain low that keeps in play high risk of chaotic scenario on no-deal exit. Also, possibilities of further Brexit delay or even revoking Article 50 remain on the table that further complicates the situation. Scenario of limited recovery before bears re-take control looks likely as technical studies are mixed on daily chart and sentiment remains weak, with additional pressure from thickening weekly cloud. Fresh bearish acceleration would challenge again 200SMA and firm break here and below 1.2960 higher low would expose next strong supports at 1.2927/18 (daily cloud top / 100SMA). Only break and close above 20/10SMA's would sideline existing downside risk.

Res: 1.3170, 1.3191, 1.3207, 1.3222
Sup: 1.3107, 1.3061, 1.3037, 1.3004

Pivot (invalidation): 0.7120

Our preference Short positions below 0.7120 with targets at 0.7090 & 0.7075 in extension.

Alternative scenario Above 0.7120 look for further upside with 0.7135 & 0.7150 as targets.

Comment A break below 0.7090 would trigger a drop towards 0.7075.

Euro dives broadly in Europeans as terrible German manufacturing data points to worsening contraction in the sector. DAX also reversed initial gain and is currently down around -0.7%. Germany 10 year yield dropped to as low as 0.002, down -0.042, on the brink of turning negative.

With 1.1335 minor support broken, EUR/USD's rebound form 1.1176 should have completed at 1.1448. Deeper fall would be seen back to 1.1176 low.

In short, Germany PMI manufacturing dropped sharply to 44.7, down from 47.6 and missed expectation of 48.0. If not for services sector, the German economy should already be in recession. Forward looking indicators are not encouraging with overall job creation at its lowest since 2016. The worst may not be over yet.

EUR/USD

Current level - 1.1381

The slide to 1.1340 should be considered corrective, so my outlook is positive, for a rise towards 1.1450 peak. The whole pattern after 1.1450 peak precedes a rise towards 1.1570.

USD/JPY

Current level - 110.73

My outlook remains negative below 111.00, for another test of 110.20 area, en route to 108.90.

GBP/USD

Current level - 1.3129

The local low at 1.3000 signals a completion of the bearish pattern and the bias is positive, for a violation of 1.3150, en route to 1.3300 area.

Pivot (invalidation): 60.25

Our preference Short positions below 60.25 with targets at 59.55 & 59.00 in extension.

Alternative scenario Above 60.25 look for further upside with 60.65 & 60.95 as targets.

Comment A break below 59.55 would trigger a drop towards 59.00.

Pivot (invalidation): 15.5600

Our preference Short positions below 15.5600 with targets at 15.3500 & 15.2400 in extension.

Alternative scenario Above 15.5600 look for further upside with 15.6300 & 15.6900 as targets.

Comment As Long as 15.5600 is resistance, expect a return to 15.3500.

Pivot (invalidation): 1314.00

Our preference Short positions below 1314.00 with targets at 1303.00 & 1298.50 in extension.

Alternative scenario Above 1314.00 look for further upside with 1320.50 & 1326.00 as targets.

Comment As Long as the resistance at 1314.00 is not surpassed, the risk of the break below 1303.00 remains high.

Pivot (invalidation): 2840.00

Our preference Long positions above 2840.00 with targets at 2863.25 & 2880.50 in extension.

Alternative scenario Below 2840.00 look for further downside with 2827.50 & 2812.00 as targets.

Comment The RSI advocates for further downside.

Pivot (invalidation): 11640.00

Our preference Short positions below 11640.00 with targets at 11480.00 & 11444.00 in extension.

Alternative scenario Above 11640.00 look for further upside with 11723.00 & 11790.00 as targets.

Comment As Long as 11640.00 is resistance, look for choppy price action with a bearish bias.

Pivot (invalidation): 5.4510

Our preference Long positions above 5.4510 with targets at 5.4780 & 5.4890 in extension.

Alternative scenario Below 5.4510 look for further downside with 5.4320 & 5.4140 as targets.

Comment The break above 5.4510 is a positive signal that has opened a path to 5.4780.