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Cable remains constructive on Thursday and holding above broken Fibo barrier at 1.3047 (Fibo 61.7% of 1.3217/1.2772) but Wednesday's Doji with long shadows which formed spinning top, signaled indecision and warns about possible reversal. Strong three-day recovery rally probed above 1.31 barrier and peaked at 1.3109 on Wednesday, but was unable to hold gains. Repeated close above Fibo barrier was positive signal, which could help if the pair manages to remain above. Daily MA's are in full bullish setup and continue to underpin, as broken 200SMA contained Wednesday's dips. Daily momentum attacks the centerline in attempts to break into positive territory and further support the advance. On the other side, strongly overbought slow stochastic turned sideways, long with daily RSI, conflicting initial positive signals. Bullish scenario requires holding above broken 1.3047 barrier and extension above 1.3112 (Fibo 76.4% of 1.3217/1.2772) to confirm bullish continuation. Conversely, loss of 1.3047 handle would weaken near-term structure, with extension and close below 200SMA (1.3002) to generate initial reversal signal.

Res: 1.3087, 1.3112, 1.3160, 1.3217
Sup: 1.3047, 1.3026, 1.3002, 1.2995

The Australian dollar holds in red in early European trading on Thursday, following strong fall in Asia that turned near-term bias to bearish mode.

Stronger Australian jobs data initially boosted the pair to new two-week high at 0.7207 but report that China banned Australian coal imports at port Dalian indefinitely smashed the Aussie dollar.

Quick bearish acceleration in reaction to the news broke below 10SMA (0.7112) and dipped below 0.71 handle, pressuring pivotal support at 0.7070 (Fibo 38.2% of 0.6706/0.7295) and threatening retest of 0.7054 base (11/12 Feb lows).

Fresh weakness returned daily MA's to bearish setup, with slow stochastic heading south and rising bearish momentum, adding to negative outlook. Close below 10SMA is needed to confirm scenario.

Res: 0.7112, 0.7146, 0.7160, 0.7207
Sup: 0.7070, 0.7054, 0.7000, 0.6931

The common European currency traded sideways against the Japanese Yen on Wednesday. The currency pair was trading near the weekly resistance level at 125.47 during yesterday's session.

If the weekly resistance level at 125.47 holds within this session, the next target for bullish traders will be near February 4 high levels at 125.93.

However, if the currency exchange rate reverses from the current price level at 125.79 and passes the resistance line as mentioned earlier, a decline towards the 100-hour simple moving average at 125.21 could be expected during the following trading session.

The Australian Dollar versus the US Dollar remained stable on Wednesday. The currency pair was trading below the weekly resistance level at 0.7177 during the previous trading session.

However, the exchange rate began Thursday's trading session with a strong downside movement. The AUD/USD pair depreciated about 120 base points during the first half of the trading session.

Everything being equal, it is likely that the currency exchange rate regains some of its lost points today.

The potential upside target will be near the 50-hour simple moving average at 0.7151.

The US Dollar has continued its decline in a descending channel pattern against the Canadian Dollar. The currency pair edged lower by about 0.40% during yesterday's trading session.

The exchange rate tested a resistance level formed by the 50-hour simple moving average at 1.3203.

If the 50-hour SMA holds, the currency exchange rate will continue its movement in the descending channel pattern within this session.

However, if the USD/CAD pair passes the resistance level as mentioned above, the next target for buyers will be near a resistance cluster at 1.3248.

Downside risks have dominated the New Zealand Dollar against the US Dollar since Wednesday's trading session. A breakout through the lower boundary of an ascending channel pattern at 0.6844 occurred during the Asian trading session on Thursday.

Given that a breakout had occurred, it is likely that the currency exchange rate will continue its decline within this session. The potential downside target will be near a support level at 0.6767.

However, technical indicators on the daily time frame demonstrate that an upside movement is likely to continue today.

The US dollar is consolidating against the Japanese yen currency, with the pair trading in the middle of the rising price channel. The USDJPY pair currently has a neutral trading bias, a break from the 110.40 to 110.80 price range is needed for an intraday trend to be established. Traders now await the release of high-impact economic data from the United States economy this afternoon.

The USDJPY pair is only bullish while trading above the 110.80 level, key technical resistance is found at the 111.12 and 111.40 levels.

If the USDJPY pair trades below the 110.40 level, sellers may test towards the 110.24 and 110.10 support levels.

The euro currency has come under increasing selling pressure against the US dollar during the European trading session after the German economy posted much worse than expected PMI Manufacturing data. The EURUSD pair is now trading back under the 1.1337 support level and may weaken towards the 1.1300 area. Technical indicators on the four-hour time frame are also turning lower and signaling further short-term weakness.

The EURUSD pair is bearish while trading below the 1.1337 level, key support is found at the 1.1300 and 1.1280 levels.

If the EURUSD pair trades above the 1.1337 level, key resistance is found at the 1.1370 and 1.1410 levels.

The US dollar is strengthening against a basket of major currencies amid news from the United States and China. It is reported that the negotiators of the United States and China in Washington are developing several memorandums of intentions, which will form the basis of a large-scale trade agreement. These memorandums cover areas including agriculture, non-tariff barriers, services, technology transfer, and intellectual property. The enforcement mechanism is still unclear, but most likely, tariffs will be imposed if conditions are not met.

In addition, financial market participants assess the FOMC meeting minutes. Fed officials expect to end the reduction of assets on the Central Bank's balance sheet this year, but do not rule out the fact that the increase in the key interest rate can be continued. The President of the Federal Reserve Bank of San Francisco, Mary Daly, said that the US Central Bank probably would not hasten to increase rates until inflation strengthened. The dollar index (#DX) closed in the red (-0.06%) yesterday.

The British pound strengthened against the US dollar after a meeting between the British Prime Minister, Theresa May, and European Commission President, Jean-Claude Juncker. Officials met to agree on a soft Brexit finally. In general, the negotiations were successful and the officials agreed to seek an optimal solution for the exit, which would suit both parties.

The "black gold" prices are rising against the optimism in trade negotiations between the US and China. At the moment, futures for the WTI crude oil are testing the mark of $57.25 per barrel. At 18:00 (GMT+2:00), a report on crude oil inventories will be published in the US.

Market Indicators

• Yesterday, there was a variety of trends in the US stock market: #SPY (+0.20%), #DIA (+0.27%), #QQQ (-0.02%).
• The 10-year US government bonds yield is at 2.64-2.65%.

The news feed on 21.02.2019:

• German manufacturing PMI at 10:30 (GMT+2:00);
• Publication of the ECB monetary policy meeting account at 14:30 (GMT+2:00);
• Core durable goods orders in the US at 15:30 (GMT+2:00);
• Philadelphia Fed manufacturing index at 15:30 (GMT+2:00);
• Existing home sales in the US at 17:00 (GMT+2:00).

EUR/USD

Current level - 1.1355

The recent slide to 1.1230 was corrective, preceding an advance towards 1.1400 area. On the senior frames, the whole rise after 1.1230 is corrective, so expect a reversal around 1.1400 to trigger a sell-off towards 1.1214 low.

USD/JPY

Current level - 110.71

My outlook is counter-trend, for a reversal and another attempt at 110.20 support.

GBP/USD

Current level - 1.3067

The bias remains positive above 1.3000 area, for a rise towards 1.3212 resistance.