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EUR/JPY Fading momentum.

EUR/JPY is trading slightly lower. Hourly support is given at 122.56 (18/05/2017 low). Major support is given at 114.90 (18/04/2017low). Expected to see further renewed buying pressures towards 126.00.

In the longer term, the technical structure validates a medium-term succession of lower highs and lower lows. As a result, the resistance at 149.78 (08/12/2014 high) has likely marked the end of the rise that started in July 2012. Strong support at 94.12 (24/07/2012 low) looks nonetheless far away.

EUR/GBP Growing demand.

EUR/GBP is strengthening. The technical has turned positive since the pair has broken resistance at 0.8530 (25/04/2017 low). Strong support can be found at 0.8304 (05/12/2017 low). Expected to see further continued increase towards resistance at 0.8787 (13/03/2017 high).

In the long-term, the pair has largely recovered from recent lows in 2015. The technical structure suggests a growing upside momentum. The pair is trading above from its 200 DMA. Strong resistance can be found at 0.9500 psychological level

EUR/CHF Selling pressures increase.

EUR/CHF is trading lower. We believe that the medium-term pattern suggests us to see continued bearish pressures towards key support that can be found at 1.0623 (24/06/2016 low).

In the longer term, the technical structure is mixed. Resistance can be found at 1.1200 (04/02/2015 high). Yet,the ECB's QE programme is likely to cause persistent selling pressures on the euro, which should weigh on EUR/CHF. Supports can be found at 1.0184 (28/01/2015 low) and 1.0082 (27/01/2015 low).

USD/CHF Heading lower.

USD/CHF continues to push lower since the pair broke support located at 0.9814 (27/03/2017 low). Strong resistance is given at 1.0107 (10/04/2017 high). Expected to show continued weakness.

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015

USD/CAD Riding downtrend channel.

USD/CAD keeps on weakening since the pair reached 1.3800. Hourly support can be found at 1.3411 (24/04/2017 high) then 1.3353 (20/01/2017 high). Expected to show continued bearish pressures within downtrend channel.

In the longer term, there is now a death cross with the 50 dma crossing below the 200 dma indicating further downside pressures. Strong resistance is given at 1.4690 (22/01/2016 high). Long-term support can be found at 1.2461 (16/03/2015 low).

AUD/USD Downside pressures.

AUD/USD is pushing lower. Hourly support is given at 0.7329 (09/05/2017 low). As long as prices remain below the resistance at 0.7608 (17/04/2017 high), there are strong downside risks.

In the long-term, we are waiting for further signs that the current downtrend is ending. Key supports stand at 0.6009 (31/10/2008 low) . A break of the key resistance at 0.8295 (15/01/2015 high) is needed to invalidate our long-term bearish view.

EUR/USD Targeting resistance at 1.3000.

EUR/USD is trading higher towards strong resistance at 1.1300 (09/11/2017 high). Hourly support can be found at 1.1169 (24/05/2017 low). Stronger support lies at 1.0842 11/05/2017 low).and key support is given at 1.0494 (22/02/2017 low). Expected to continue growing higher.

In the longer term, the death cross late October indicated a further bearish bias. The pair has broken key support given at 1.0458 (16/03/2015 low). Key resistance holds at 1.1714 (24/08/2015 high). Expected to head towards parity.

GBP/USD Lack of follow-through.

GBP/USD is trading sideways. Hourly resistance is given at 1.3048 (18/05/2017 high). Hourly support are given at 1.2831 (04/05/2017 low) and 1.2757 (21/04/2017 low). An unlikely break of this last support would indicate further weakness. Expected to show renewed buliish pressures.

The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

USD/JPY Weakening.

USD/JPY has exited the symmetrical triangle and keeps pushing lower. Hourly support is given at 110.24 (18/05/2017 low). Stronger support is located at 108.13 (17/04/2017 low). Other key supports lie at a distant 106.04 (11/11/2016 low). The road is wide-open for further decline.

We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

GBP/USD – 1.2875

Recent wave: Wave V of larger degree wave (III) has ended at 1.1986 and major correction has commenced from there for gain to 1.3000 and 1.3140-50

Trend: Near term up

New strategy :

Sell at 1.2920, Target: 1.2770, Stop: 1.2980

Position: -
Target:  -
Stop:-

The British pound met heavy selling pressure at 1.3015 yesterday and has tumbled, the breach of previous support at 1.2866 signals top has been formed at 1.3048 earlier, hence consolidation with downside bias is seen for further fall to 1.2844 and 1.2831 support, break there would provide confirmation and bring further fall to 1.2800 and later towards support at 1.2757 which is likely to hold on first testing.

Our preferred count on the daily chart is that cable's rebound from 1.3500 (wave (A) trough) is unfolding as a wave (B) with A ended at 1.7043, followed by triangle wave B and wave C as well as wave (B) has ended at 1.7192, the subsequent selloff is the larger degree wave (C) which is still unfolding with minor wave (III) of larger degree wave 3 ended at 1.1986, hence wave (IV) correction is in progress which could either be a triangle wave (IV) of a complex formation but upside should be limited to 1.3500 and price should falter well below 1.4000, bring another decline in wave (V) of 3 for weakness to 1.1500, then 1.1200.

On the upside, whilst recovery to 1.2900 is likely, reckon previous support at 1.2926 would turn into resistance and limit cable’s upside, bring another decline. Above 1.2965-70 would defer and risk a stronger rebound to 1.3000 but said resistance at 1.3015 should remain intact, bring another decline later.

'It was supposed to be a year of risk that could lead to a break up of the euro. It's turning out to be the best year in a decade for the shared currency.' – Stefania Spezzati, Bloomberg

Pair's Outlook

During the early hours of Friday's trading session the common European currency traded against the US Dollar just above the strong support cluster near the 1.1190 level. It is almost exactly where this week's trading session began. Due to that factor the situation remains almost unchanged. From the downside the rate is supported by the combined support of the 61.80% Fibonacci retracement level and the monthly R2 at the already mentioned level. From the upside the pair faces the resistance of the upper Bollinger band at 1.1310 and the weekly R1 at 1.1306. The only difference, compared with Monday, is the fact that the Bollinger band has moved higher.

Traders' Sentiment

Traders remain bearish on the pair, as 61% of open positions are short. Meanwhile, 53% of trader set up orders are to sell the Euro.

'I think the pressure is on here. We could see a significant move lower (in sterling) provided these uncertainties [the upcoming elections in the UK] in the polls persist.' – Stephen Innes, OANDA (based on Reuters)

Pair's Outlook

Yesterday, once again the Cable remained relatively unchanged, experiencing a small decline, which caused the consolidation trend to be preserved for another day. Risks are still skewed to the downside, but with the GBP/USD pair having a strong support at 1.2850, formed by the lower Bollinger band, the consolidation trend's lower boundary and the broadening rising wedge's support line. Losses are unlikely to exceed this area, although volatility lower is quite possible. Meanwhile, technical studies are unable to confirm either scenario, as they retain mixed signals.

Traders' Sentiment

Market sentiment remains relatively neutral, as 52% of all open positions are short and the remaining 48% are short. At the same time, the share of buy orders inched slightly up, namely from 52 to 53%.

'The rise in Treasury yields is supporting the dollar. It appears that speculative buying of Treasuries has run its course, with Trump concerns and geopolitical risks no longer fresh news.' – Daiwa Securities (based on Reuters)

Pair's Outlook

The Greenback successfully outperformed the Japanese Yen on Thursday, causing another setback in the anticipated decline towards 111.00. Treasury yields keep weighing on the Buck, thus, a negative outcome is most likely today, despite technical indicators being unable to confirm this possibility. The weekly PP and the 55-day SMA now form immediate support, but are likely to fail at holding the losses. The main target at the moment is the 111.00 handle, but a drop that low is yet uncertain, as fundamental data could have a bullish effect on the USD/JPY pair today, in which case intraday losses have a solid chance of completely being erased.

Traders' Sentiment

Traders remain bearish towards the US Dollar, with 58% of all open positions being short. Purchase orders take up 52% of the market.

'China's net gold imports via main conduit Hong Kong dropped 33.5 percent in April from the previous month.' – Vijaykumar Vedala, Reuters

Pair's Outlook

On Friday morning the yellow metal's price remained below the 1,260 mark, as it failed to reach for the levels near the 1,270 level. However, during Thursday's and Friday's trading the commodity price did not need to retreat for support of the cluster near the 1,250 mark. Which means that a bullish momentum persists in the bullion. Moreover, the 55-day SMA seems to be moving away from the mentioned support cluster to provide support higher. These small factors combined allow to keep in force the forecast of the yellow metal reaching the 1,270 mark in the near future.

Traders' Sentiment

SWFX market sentiment remains unchanged, as 51% of open positions are short. However, 71% of pending commands are to buy the bullion.

GBP/JPY - 143.00

Recent wave: Medium term low formed at 120.50 and (A)-(B)-(C) major correction has commenced with (A) leg ended at 148.45, hence wave (B) is unfolding for retreat to 131.00-10.

Trend: Near term up

New strategy :

Sell at 143.65, Target: 141.65, Stop: 144.25

Position: -
Target:  -
Stop:-

Sterling met renewed selling interest at 145.45 and has tumbled from there, price just broke below previous support at 143.40, confirming the selloff from 148.10 top has resumed, hence bearishness is seen for this move to extend further weakness to 142.10-15, however, break there is needed to retain bearishness and bring subsequent fall to 141.50-60 which is likely to hold on first testing due to near term oversold condition.

In view of this, we are looking to sell euro on recovery as 143.60-70 should limit upside and bring another decline later. Above 144.00 would risk a stronger rebound to 144.50 but upside would still be limited to 145.00 and price should falter well below said resistance at 145.45, bring another decline later.

Our preferred count is that larger degree wave V with circle is unfolding from 251.12 with wave (I) 219.34, (II): 241.38 and wave (III) is subdivided into 1: 192.60, 2: 215.89 (23 Jul 2008) and wave 3 ended at 118.87 earlier in 2009. The correction from there to 162.60 is wave 4 which itself is a double three and is labeled as first a-b-c ended at 151.53, followed by wave x at 139.03, 2nd a ended at 162.60, 2nd b at 146.75 and 2nd c leg of wave 4 ended at 163.00. Therefore, the decline from 163.00 to 116.85 is now treated as wave 5 which also marked the end of larger degree wave (III), hence wave (IV) major correction has commenced for retracement of the wave (III) from 241.38 and upside target at 183.95-00 (50% Fibonacci retracement of the wave (II) from 241.38) had been met, a drop below 160.00 would suggest wave (IV) has ended at 195.85, bring decline in wave (V) for initial weakness to 130 (already met) and 120.


On Thursday, OPEC announced that the existing output cut agreement will be extended for an additional 9 months, which was in line with market expectations.

However, the scale of output cut remains the same at 1.8 million barrels a day. Besides, no new OPEC member states will join the agreement extension. In addition, the market witnessed some profit-taking pressure which weighed on oil prices resulting in a drop of 5%.

On early Friday morning, WTI spot and Brent crude spot hit a 2-week low of 48.31 and 51.17 respectively. The drop was followed by a rebound this morning.

The next meeting of OPEC and non-OPEC oil producers is schedule 30 November.

OPEC member states, Iran, Libya, and Nigeria are still exempted from the output cut agreement and have been increasing their production. Some non-OPEC oil producers, such as Russia and Kazakhstan have also attempted to boost their production.

The US shale oil industry has seen a marked recovery since February last year due to the rebound in oil prices. The US Baker Hughes data (that records the number of new Oil Rigs) is showing additional Rigs added every week.

In general, the oil supply remains high which has, and will, offset OPEC's output cut effort to an extent. In the long term, oil prices are still under pressure.

On early Friday morning, we have seen USD weakening with the dollar index currently testing the support line at 97.00.

US durable goods, core durable goods (Apr) and Q1 GDP second reading will be released at 13:30 BST this afternoon. The first Q1 GDP reading indicated a mere 0.7% growth, which was the slowest growth in three years. If we see a higher second reading, it will likely provide USD support.