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'We consider the euro to be cheap. Investors will be back to look at the euro from a valuation basis. We see the fundamental fair value of the currency closer to $1.25 in the long term.' – Thomas Kressin, Pimco (based on Bloomberg)

Pair's Outlook

On Thursday morning the common European currency remained near the 1.09 mark against the US Dollar. Previously, as it was forecasted, the currency exchange rate reached the cluster of support below it near the 1.0880 level and rebounded. Due to that factor a surge is to be expected. However, the upper Bollinger band is no longer located below the pair, and on Thursday was providing a hindering resistance near the 1.0920 level. Moreover, the pair is still set to struggle with the resistance put up by the upper trend line of the long term pattern at 1.0960.

Traders' Sentiment

SWFX traders remain bearish, as 60% of open positions are short. Meanwhile, trader set up orders are neutral.

'The first phase of negotiations with the EU [over Brexit] will be marked by sharp discord that is likely to be negative for the pound.' – BMO Capital Markets (based on Business Recorder)

Pair's Outlook

Wednesday ended with the British currency erasing all intraday losses against the US Dollar, but with no significant gains registered. A close barely above the 1.2850 psychological resistance now allows the Cable to continue edging further up, with the monthly R2, the weekly R1 and the upper Bollinger band forming another supply area around 1.2950. Although technical indicators support the possibility of another rally, the tide could still turn once the US fundamentals are released later today. Upbeat data is likely to provide the Greenback with a boost, in which case the Cable's consolidation trend would be preserved.

Traders' Sentiment

There are slightly more bulls today, namely 52% (previously 51%). At the same time, the number of orders to acquire the Sterling remained unchanged at 57%.

'Risk of closing the 109.40-60 gap should not be ignored, but price action suggests an early surge into the 112.15 to 114.65 retracement zone during May.' – Westpac (based on FXStreet)

Pair's Outlook

The USD/JPY currency pair remained relatively unchanged yesterday, with the 111.00 major level limiting downside volatility. The weekly R3 that was on the pair's path appears to be unable to provide support or resistance, thus, more focus should be on the cluster around 110.20 and the one around 112.15. From a broad technical perspective the Greenback should continue moving up until the descending channel's resistance line is reached; however, the mentioned supply area circa 112.15 could apply sufficient pressure on the Buck, resulting in another drop even back under 110.00. At the moment the US Dollar's main goal is to manage to retain its positions above 111.00.

Traders' Sentiment

There are 55% of traders holding long positions today, compared to 62% yesterday. The share of buy orders inched down from 57 to 53%.

'President Donald Trump unveiled a one-page plan on Wednesday proposing deep U.S. tax cuts.' – Swati Verma, Reuters

Pair's Outlook

The yellow metal remained near previous session's opening level on Thursday morning, as the commodity price ran into resistance during the last hours of Wednesday's trading. The bullion is most likely going to find support in the weekly S2, which is located at the 1,263.56 level. The weekly S2 managed to provide enough support to keep the metal's price higher in the past two trading sessions. However, as the yellow metal rebound, it is set to face the resistance put up by the 20-day SMA at 1,271.25 level.

Traders' Sentiment

Traders remain bearish on the pair, as 54% of open positions are short. However, 64% of pending commands are set to buy the metal.

Today's fresh bullish acceleration has eventually completed 1.2904/1.2755 correction and broke higher to post new multi-month high at 1.2914.

Positive sentiment and bullish daily studies are supportive, as double golden-cross (10/200 and 20/200SMA's) underpins the action.

Near-term focus is turning towards psychological 1.3000 barrier initially and may extend towards weekly cloud base at 1.3113, as the action is supported by completion of inverted weekly H&S pattern.

However, risk of corrective easing on overbought daily RSI/slow stochastic remains in play, but without firmer bearish signals for now. Rising daily 10SMA, also former consolidation base at 1.2770 zone offers solid support which is expected to ideally contain dips.

Res: 1.2914, 1.2944, 1.3000, 1.3055
Sup: 1.2859, 1.2837, 1.2770, 1.2755

EUR/USD

Current level - 10901

The recent break through 1.0920 led to s dip to 1.0854, but it wasn't enough to initiate a more substantial downswing, so the outlook on the senior frames is still positive, with a risk of a rise towards 1.1010 area. Initial intraday resistance lies at 1.0920 and key support is projected at 1.0826.

Profit-taking affects gold curbing silver and platinum

USD/JPY

Current level - 111.23

A minor reversal at yesterday's peak at 111.75 signals a negative bias, for a slide towards 110.50 support zone.

GBP/USD

Current level - 1.2867

The intraday outlook is positive and a break through 1.2904 high will target 1.3000 sentiment area. Crucial support lies at 1.2803 low.

Gold is moving higher after a completion of wave II pullback at 1195 area. As such, current leg up can be a new strong and extended wave III but as always we have to focus on minimum expectations which is a rally up to 1330/40 area.

GOLD, Daily

EURUSD

The EURUSD was indecisive yesterday. Price attempted to push lower bottomed at 1.0855 but closed higher at 1.0903. The bias is neutral in nearest term. Immediate support is seen around 1.0850. A clear break below that area could trigger further bearish pressure testing the pre-gap level at 1.0730 region. Immediate resistance is seen around 1.0950 (double top). A clear break and daily close above that area would expose 1.1000 – 1.1050 region. Overall I remain neutral.

GBPUSD

The GBPUSD was indecisive yesterday. The bias is neutral in nearest term. We haven’t seen a significant bullish run so far, but price is still traded just above the daily EMA 200, keeps the double bottom bullish scenario remains valid with nearest target seen around 1.3000 – 1.3050 region. Immediate support is seen around 1.2800 but key support remains at 1.2750 which need to be clearly broken to the downside to interrupt the double bottom bullish scenario.

USDJPY

The USDJPY attempted to push higher yesterday topped at 111.77 but whipsawed to the downside and closed lower at 111.04. The bias is neutral in nearest term but overall price is still in a bullish phase after broke above the trend line resistance targeting 112.20 area. Immediate support is seen around 110.85. A clear break below that area could trigger further bearish pressure testing 110.10 region. Immediate resistance is seen around 111.77. A clear break above that area could trigger further bullish pressure testing 112.20 region.

USDCHF

The USDCHF had another indecisive movement yesterday formed a Doji on daily chart. Price attempted to push higher topped at 0.9968 but closed lower at 0.9932. The bias remains neutral in nearest term but overall price is still in a bearish phase targeting 0.9880 and 0.9813 area. On the upside, 1.0020 remains a key resistance and good place to sell with a tight stop loss. Overall I remain neutral.

Trump's big tax reforms and tax reductions on Wednesday proved to be not so big, at least from Wall Street's perspective. U.S. equities shrugged off earlier gains after flirting with all-time highs, the dollar pared back some gains, and Treasury yields declined slightly from a two-week high.

The market's reaction to the core principles of President Trump's tax plan, which included a cut to corporate tax from 35% to 15%, isn't based on the “buy the rumors, sell the news” phenomenon, but it reflects investors' skepticism that the proposed cuts will be very difficult to pass through Congress.

The lack of details contained on Trump's single piece of paper was perceived as a publicity stunt for the President as he celebrates his first one hundred days in the Oval Office, and unfortunately, seemed more of a wish list than a serious starting point.

Many economists agree that it's almost impossible for the proposed plan to be revenue-neutral, and that's why Democrat and Republican deficit hawks will stand against it. Although I think we will see some sort of tax cuts and reforms, it's not likely to occur by August this year, and of course won't be of the proposed magnitude, which is likely to be a negative factor to the U.S. dollar and equities.

The market's focus will shift to the European Central Bank's monetary policy meeting later today. While no changes to asset purchases or interest rates are expected, Mario Draghi's tone will guide the Euro. During the month of April, economic data has shown a fair improvement in the Eurozone. Unemployment declined to an eight-year low, PMI posted its strongest readings in six years, consumer confidence strengthened, and construction of buildings and infrastructure rose at its fastest pace in almost five years. On the downside, inflation levels slipped to 1.5% in March.

The Euro will trade based on whether Mario Draghi looks at the glass half full or half empty. However, I find it difficult not to acknowledge the improvement in economic developments, and that's why I see further potential for the single currency to move higher.

The Euro remains bid after the first round of French election and fragile tone of the dollar, as US President Trump did not give specific details about his highly anticipated tax reform report yesterday.

The single currency is consolidating under week's high at 1.0948, posted on Tuesday and retested yesterday, but unable to break higher so far.

Two strong barriers lay in this zone, Fibonacci 61.8% of 1.1298/1.0339 descend at 1.0931 and falling weekly 55SMA (currently at 1.0935), break of which is needed to signal resumption of bull-leg from 1.0568 and expose psychological 1.1000 barrier, reinforced by weekly 100SMA.

The pair will remain bullish while above 200SMA (currently at 1.0834) with extended dips on overbought daily slow stochastic expected to find support here and keep bullish stance intact.

Today's focus is on ECB policy meeting. The central bank is expected to at least outline plans for normalizing policy on positive economic outlook, backed by brighter business and consumer sentiment, stronger manufacturing data and political environment that showed signs of stabilizing after the first round of French election.

Res: 1.0935, 1.0948, 1.1000, 1.1067
Sup: 1.0894, 1.0854, 1.0834, 1.0819