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EUR/JPY Sideways price action.

EUR/JPY is trading mixed. 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 Strengthening.

EUR/GBP is strengthening. The technical has turned positive since the pair has broken resistance at 0.8530 (25/04/2017 low). Support can be found at 0.8304 (05/12/2017 low). Expected to see further consolidation around 0.8600.

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 Continued weakness.

EUR/CHF is getting lower. Despite the sharp increase and the recent bullish breakout which was very likely psychological, we believe that the medium-term pattern suggests us to see at some point renewed 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).

The EUR/USD broke above 1.1200 level on Friday and it is normal that we are seeing the retracement at this point. Remember, always mark yesterday's high & low. Those were the definitive points where buyers or sellers came in the day before. Usually we see a retest of those points. Because the pair is in uptrend it could spike from the bullish POC 1.1155-70 (trend line, ATR pivot, D L3, 38.2) targeting 1.1211 followed by 1.1250-65. The ATR of EUR/USD is not that high, so pay attention to levels and POC zone. Ideally 1.1120 should hold for bullish scenario to be valid.

The US dollar extended its recent losses on Friday amid continued uncertainty on the US political front and some dovish comments from St. Louis Fed President James Bullard. The policymaker acknowledged the elephant in the room, indicating that US economic data have been relatively weak since the March FOMC meeting. He added this suggests that another two rate hikes this year as currently indicated by the 'dot plot', may be overly aggressive.

Even though Bullard is a well-known dove and a non-voter this year, his comments still raise doubts as to whether a June rate hike is indeed as likely as market pricing currently suggests (78% according to the Fed funds futures). Therefore, we believe that the focus will now turn to the rest of the Fed speakers this week, as well as the FOMC minutes on Wednesday, as investors try to gauge whether that probability is realistic, or overly optimistic. In that respect, Fed Board Governor Lael Brainard's comments tomorrow could prove critical for market expectations, as she is a permanent FOMC voting member and her views tend to be in line with the thinking of most of the Committee.

As for the dollar, we think that it could remain on the back foot, at least until Brainard speaks tomorrow. EUR/USD continued to gain on Friday, breaking above the resistance (now turned into support) barrier of 1.1170 (S1), before finding fresh sell orders near the 1.1240 (R1) territory and subsequently retreating somewhat. The price structure on the 4-hour chart still suggests a short-term uptrend and as such, we would expect the bulls to seize control again soon and aim for another test near 1.1240 (R1). A clear break above that level could set the stage for extensions towards the next resistance of 1.1300 (R2).

Brexit Secretary warns UK will abandon Brexit talks if EU demands divorce bill

The British pound opened with a modest negative gap this week, following comments from Brexit Secretary David Davis on Sunday. Davis warned the UK will walk out of Brexit talks should the EU continue to demand EUR 100 billion as a divorce bill, and added he regards even 'EUR 1 billion as a lot of money'. Considering that the issue of the divorce bill is expected to be the first item on the Brexit negotiating agenda, Davis's uncompromising remarks may have been interpreted as raising the likelihood for no deal and thus, a 'hard Brexit'.

Moving forward, we think that sterling will probably remain very sensitive to political developments ahead of the General Election. The latest election opinion polls show the Conservatives securing 47% of the total vote. In our view, fresh polls that show the Conservatives extending their lead could prove positive for the pound, on speculation that Theresa May will be able to negotiate a better Brexit deal with the increased domestic influence she will gain. On the other hand, polls that show the party gaining less than the anticipated 47% may prove negative for the currency. Finally, we think that incoming polls are likely to move the pound more aggressively than before, considering that polls just two weeks before Election Day may bear more significance in the eyes of investors.

GBP/USD traded higher on Friday, breaking above the resistance (now turned into support) level of 1.3000 (S1) to hit resistance at 1.3040 (R1). The pair opened with a negative gap this week below 1.3000 (S1), but recovered some of its losses in the following hours and at the time of writing, it is trading marginally above that level. The short-term bias is to the sideways in our view. Bearing in mind that Cable has been range-bound between 1.2850 and 1.3040 (R1) since the 27th of April, we think that the pair is likely to remain near key technical territories and wait for fresh developments surrounding the election. New polls that show the Conservatives extending their lead could cause the rate to surge and aim for another test at 1.3040 (R1), where a decisive break could pave for the way for the 1.3100 (R2) barrier.

Today's highlights:

During the European day, the economic calendar is empty, with no major indicators due to be released.

We have three speakers on the agenda: Philadelphia Fed President Patrick Harker, Minneapolis Fed President Neel Kashkari, and ECB Executive Board member Jens Weidman. Following Bullard's aforementioned comments, we think that market participants are likely focus on Harker and Kashkari, considering that both are FOMC voting members this year.

As for the rest of the week, on Tuesday we get Eurozone's preliminary manufacturing and services PMIs as well as Germany's Ifo survey, all for May. On Wednesday, all eyes will be on the Bank of Canada rate decision. The forecast is for the Bank to remain on hold once again. We think that the tone of the meeting statement is likely to be even more cautious than previously, following the recent tariffs from the US on Canada. We also get the minutes of the FOMC's May policy gathering. On Thursday, the highly anticipated meeting between major OPEC and non-OPEC oil producers will take place in Vienna.

Finally on Friday, Japan will release its CPI data for April, while from the US, we will get durable goods orders for the same month and the 2nd estimate of Q1 GDP.

EUR/USD

Support: 1.1170 (S1), 1.1100 (S2), 1.1070 (S3)

Resistance: 1.1240 (R1), 1.1300 (R2), 1.1340 (R3)

GBP/USD

Support: 1.3000 (S1), 1.2950 (S2), 1.2900 (S3)

Resistance: 1.3040 (R1), 1.3100 (R2), 1.3150 (R3)

The Aussie shows strong hesitation at 0.7467 barrier (daily Kijun-sen/Fibo 61.8% of 0.7554/0.7327 downleg/bear-trendline off 0.7747) where last week's rally was capped. Monday's action is so far shaped in Doji, capped by bear-trendline and supported by 20SMA and showing indecision, however, risk of fresh weakness exists on bearish daily studies and revrsal of slow stochastic from overbought territory. Extension below 20SMA (0.7434) would be seen as initial signal of weakness, with loss of 10SMA / daily Tenkan-sen at 0.7400 and extension below 4-hr cloud (spanned between 0.7402 and 0.7385) to signal reversal from 0.7467 and likely end of rally from 0.7327 (09 May low) which marks correction of larger downtrend from 0.7747. Alternatively, sustained break above 0.7467 pivot would signal fresh extension of bull-leg from 0.7327 and expose upper targets at 0.7500 and 0.7554.

Res: 0.7467, 0.7500, 0.7544, 0.7554
Sup: 0.7434, 0.7404, 0.7385, 0.7360

USD/CHF Wide-open towards support at 0.9550.

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 continue going lower.

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 Wide-open for further decline.

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.

In the longer term, there is a golden cross with the 50 dma crossing the 200 dma indicating further upside 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 Monitoring symmetrical triangle.

AUD/USD is pushing higher since the pair reached hourly support at 0.7329 (09/05/2017 low). As long as prices remain below the resistance at 0.7608 (17/04/2017 high), the shortterm technical structure is negative. Expected to show renewed weakness.

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.

'With the pair rallying to close higher the past week, more strength is expected in the new week.' – FXTechstrategy (based on investing.com)

Pair's outlook

On Monday morning, the common European currency had slightly retreated against the US Dollar, as the currency exchange rate retreated down to the combined support of the 61.80% Fibonacci retracement level at 1.1190 and the monthly R2 at 1.1187. It is most likely that the currency pair remains near the support cluster, as it has surged majorly during the previous week, and a period of consolidation is to be expected. However, afterwards the pair is most likely to continue the surge.

Traders' sentiment

SWFX traders remain bearish in regard to the Euro, as 60% of open positions are short. Meanwhile, 53% of trader set up orders are to buy.

'Bulls would be eyeing for a follow through momentum beyond 1.3040-50 immediate hurdle, above which the pair is likely to aim towards reclaiming the 1.3100 handle and head towards testing 1.3125-30 resistance area, marking 38.2% Fibonacci retracement level of post-Brexit downslide.' – Haresh Menghani (based on FX Street)

Pair's outlook

On Friday, GBP/USD breached the upper Bollinger band and closed as high as the 1.3042 mark. The Pound opened lower today and has since demonstrated strong downside momentum, dashing through the weekly PP at 1.2985. The next support that the pair is gradually approaching to is formed by the 20-day SMA and the weekly S1 circa 1.2925. This level, however, might be considered unreachable in this trading session, setting 1.294 as the ultimate low. In case the Pound manages to reverse to the upside, the upper Bollinger band should limit the currency from trading higher. May's speech at 18:00 GMT, however, may introduce some corrections in the pair's movement.

Traders' sentiment

Market sentiment remains bearish, as 51% of open positions are short. Meanwhile, 60% of pending orders are to buy the Pound.

'USD/JPY-slightly bearish. We expect the pair may move towards 110.80.' – Fullerton Markets (based on Investing.com)

Pair's outlook

This trading week has started with the US Dollar appreciating slightly against the Yen. The closest upper limit is set by the 55-day SMA at 111.72. The given resistance was strong enough not to pass the pair through in the previous two sessions; thus, a breakout might be regarded as a bullish sign, leading the Greenback towards the 20-day SMA at 112.37. Today, it might be expected that the pair remains confined within the bounds of the 55-day SMA and the monthly PP. However, it is yet to be seen if the close occurs in the red or green area.

Traders' sentiment

Traders have not changed their bearish outlook in this trading session, as 57% of open positions are short. However, 59% of set up orders are to buy the US Dollar.

'Fundamentally, we remain bearish on the yellow metal, underpinned by two more rate hikes by the U.S. central bank in 2017.' – Barnabas Gan, OCBC (based on Reuters)

Pair's outlook

The yellow metal remains above the 1,250 level, and it is still positioned for additional gains in the near future. The reason for that is the fact that the bullion is above a strong support cluster, which is located from the 1,243 to the 1,249 levels. Meanwhile, the commodity price faces no resistance up to the 1,269 level, where the monthly PP and a medium term trend line are located at. Most likely the bullion will reach for the resistance and bounce off of it during the next upcoming trading sessions.

Traders' sentiment

SWFX market sentiment remains almost neutral, as 51% of open positions are short. However, 65% of trader set up orders are to buy.

EUR/USD Strengthening.

EUR/USD is trading higher. Resistance now lies at 1.1212 (19/05/2017 high). Hourly support can be found at 1.0842 (11/05/2017 low). Strong support is now given at 1.0682 (21/04/2017 base) and key support can be found 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 Trading around 1.30.

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) and1.2757 (21/04/2017 low). An unlikely break of this last support would indicate further weakness. Expected to push higher.

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 Short-squeeze.

USD/JPY has exited the symmetrical triangle and keeps pushing lower despite ongoing bullish consolidation. 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 now 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).