'We think that a continued improvement in US economic data and a Fed that acknowledges this should push the USD back into its uptrend.' – Morgan Stanley (based on PoundSterlingLive)

Pair's Outlook

The Cable behaved mostly according to expectations on Tuesday, as it experienced another decline, but stabilised below the immediate support area. Since the GBP/USD pair still remains in its consolidation trend, the most logical outcome today would be a rally back towards the 1.25 level or even higher. A drop lower is also possible, but with a close above the 1.2450 level, as it kept the Sterling afloat since mid-January. Moreover, the monthly PP, the 55 and the 100-day SMAs form a tough demand cluster just below the 1.2450 mark, also suggesting a strong bearish development is far-fetched. Meanwhile, technical indicators are in favour of the positive outcome.

Traders' Sentiment

There are 60% of traders with a positive outlook towards the Pound today, but 56% of all pending orders are to sell the British currency.

'The dollar/yen was weak last week, so investors bought back the dollar on Yellen's comments.' – BBH (based on Reuters)

Pair's Outlook

The American Dollar managed to erase all intraday losses against the Japanese Yen yesterday and even climb over the 114.00 mark, thus, breaking its seven-week bearish trend. The US Dollar now has the potential to post more gains and reach the 115.00 major level, but a surge beyond this level could be difficult to achieve, as the 55-day SMA, the weekly R2 and the upper Bollinger band form a strong resistance area around 115.15. Technical indicators in the daily timeframe also suggest the Buck could post losses today. Setbacks are now expected until the USD/JPY pair reaches the 21-month bearish trend-line near 118.00.

Traders' Sentiment

Bulls are barely outnumbering the bears, taking up 51% of the market (previously 55%). The share of buy orders increased from 56 to 58%.

'The focus is really on the U.S. fiscal policy. And if that stokes up the inflation expectations, we expect gold to suffer and consolidate for a while.' – Richard Xu, HuaAn Gold (based on Reuters)

Pair's Outlook

The yellow metal remained near the 1,220 mark on Wednesday morning. The reason for that is that the markets have still not decided upon the future direction of the commodity price. In the meantime, from a technical perspective all of the bullion's recent moves have been dictated by two levels of significance on the daily chart. From the upside the metal is kept lower by the weekly PP at 1,232.24, and from the downside the bullion is finding support in the first weekly support at 1,219.77 combined with the 38.20% Fibonacci retracement level at 1,219.20.

Traders' Sentiment

Traders remain long on the pair, as 54% of trader open positions are long on Wednesday. Meanwhile, 55% of trader set up orders are to buy the metal.

The pair remains within 0.7600/0.7700 range for the second week, with range’s upper boundary being pressured.

Fresh attempts higher are under way, following yesterday’s repeated rejection at 0.7700 zone and subsequent sharp pullback.

Aussie regained strength after yesterday’s limited US dollar’s rally that was contained just above range floor at 0.7600 and managed to close above rising Tenkan-sen (currently at 0.7649) that continues to underpin.

Technical studies remain firmly bullish and favor renewed attacks at 0.7700 pivot, break of which would signal bullish continuation towards key short-term barriers at 0.7755/75 zone (Aug/Nov 2016 consolidation tops).

Alternative scenario requires firm break below 0.7600 support zone (reinforced by rising 20 SMA) to generate stronger bearish signal.

Res: 0.7694, 0.7732, 0.7755, 0.7775
Sup: 0.7646, 0.7616, 0.7600, 0.7568

Cable is at the back foot and consolidating just above yesterday’s lows at 1.2440, where daily cloud top limited strong acceleration lower.

Support is reinforced by 55/100SMA bull-cross, Fibo 38.2% of 1.1986/1.2704 and 30SMA that lay 1.2430/15 zone.

Near-term studies are weak and see risk of further weakness, with daily indicators heading south and maintaining downside risk.

Sustained break below 1.2440/15 support zone would trigger stronger bearish acceleration and expose 1.2345 (07 Feb spike low), with possible extension towards 1.2260 (Fibo 61.8%) on break.

Broken bull-trendline off 1.1986 is now offering initial resistance at 1.2472 (reinforced by falling Tenkan-sen) that so far caps.

Extension above here would be seen as correction ahead of fresh weakness, as long as past two days tops at 1.2538/46 stay intact.

UK jobs data, due today, are eyed for fresh signals.

Res: 1.2472, 1.2500, 1.2546, 1.2580
Sup: 1.2440, 1.2421, 1.2415, 1.2345

The pair closed in red for the fourth straight day and came close to key near-term support at 1.0550 (daily cloud base). Yesterday's comments from Fed's Chief Yellen about interest rate hike, further boosted strong dollar's near-term sentiment and kept the pair under increased pressure.

The notion is confirmed by the second daily close below 55SMA (1.0601), strong bearish setup of daily MA's, as well as bearish candles with long upper shadows of past two days that weigh on near-term action.

Final attack at 1.0550 target is seen as likely scenario, with break lower to look for another pivotal support at 1.0525 (Fibo 61.8% of 1.0339/1.0827 rally).

Strongly oversold slow stochastic is still heading south and showing room for further downside.

Broken 55SMA marks solid resistance at 1.0601, along with daily Kijun-sen at 1.0640, where upticks should be ideally capped.

Res: 1.0584, 1.0601, 1.0640, 1.0662
Sup: 1.0550, 1.0525, 1.0509, 1.0454

Sunrise Market Commentary

• Rates: Yellen puts solid floor below US yield markets
  Fed Yellen confirmed the recent hawkish shift and puts a bottom under US yield markets. It should strengthen markets' sensitivity to US eco data, starting today with especially US CPI (expected to rise further above the 2%-target. With Yellen's testimony out of the way, focus will start shifting to Trump's 'phenomenal' tax plan, suggesting more upside for yields.
• Currencies: Dollar extends gains as a next Fed rate hike is coming closer
  Yesterday, the dollar was supported by comments from Fed's Yellen as she acknowledged the risks of waiting too long to raise rates. Today, the focus is on the US data. The US CPI trending further north of 2.0% should protect the USD downside. Sterling traders will keep an eye at the UK labour data .

The Sunrise Headlines

• US stock markets ended around 0.4% higher following Fed Yellen's bullish assessment on the economy with all main indices hitting new highs. Overnight, most Asian equity markets eke out even bigger gains.
• Janet Yellen's first day testifying before Congress solidified investor views that the Fed chair is more hawkish, building on sentiment from the most recent Federal Reserve meeting and pushing Treasury yields higher.
• Campaigning for the Dutch election kicks off today with anti-Islam leader Wilders frontrunner in a vote that will test the anti-establishment sentiment that swept Britain out of the EU and Donald Trump into the US presidency.
• French presidential contender Fillon is grappling with resistance to his candidacy within his own Republican party even as polls show a tight race with Macron to reach the second round of voting with National Front leader Le Pen
• Eurogroup Dijsselbloem said on the Greek bailout: "People think that because there's a Eurogroup next week we have to have it worked out. But that's never been my timeframe. It's unthinkable. The IMF must also be on board".
• Japanese PM Abe said US President Trump shared his view at last week's summit that Japan's monetary policy was not currency manipulation but to end deflation. Abe's comments suggest Trump may be softening his criticism.
• US President Trump knew for weeks that national security adviser Michael Flynn had misled the White House about his contacts with Russia but did not immediately force him out, an administration spokesman said.
• Today's eco calendar heats up with the UK labour market report and several US data (empire manufacturing, CPI, retail sales, industrial production). Yellen testifies to the House. Fed Rosengren and Lacker speak and the Riksbank meets

Currencies: Dollar Rally Slows Ahead Of Yellen Testimony

USD gains as Yellen won't wait too long to hike rates

On Tuesday, EUR/USD and USD/JPY held tight ranges ahead of the semi-annual testimony of Fed chair Yellen before the Senate. Yellen reaffirmed that the Fed is coming closer to meeting its targets on employment and inflation. The Fed currently doesn't include a big fiscal easing in its forecasts as there is still a lack of visibility on the any concrete measures. At the same time, the Fed is aware of the risks of waiting too long to rise rates. So, the Yellen comments could be considered as slightly hawkish. The dollar rallied. EUR/USD closed the session at 1.0578 (1.0598 on Monday). USD/JPY finished the session at 114.26 (from 113.74).

Overnight, Asian equity markets join yesterday's post-Yellen rally. Japan profits most from the yen decline. USD/JPY is trading in the 114.35 area. In Parliament, PM Abe said that president Trump acknowledged that monetary policy tries to end deflation and is not FX manipulation. The PBOC strengthened the fixing of the yuan to USD/CNY 6.8632, despite overall USD strength, indicating that the PBOC aims tightening monetary policy. EUR/USD hovers in the 1.0580 area, near yesterday's closing levels.

Today, the US economic calendar is well filled. January inflation is expected to have risen to 2.4% Y/Y from 2.1% Y/Y previously, but the core inflation is expected to have slid slightly to 2.1% Y/Y. We have no reasons to distance us from consensus. US Retail sales growth weakened in recent months. Also in January, sales might been weak. Unit car sales have eased, but higher gasoline prices will support the gasoline sales. January industrial production will have been held back by unseasonably warm weather affecting utility output. Manufacturing output is expected to rise modestly. Price data might be slightly more important for the (FX) market than the activity data. Inflation drifting further north of 2.0% might fuel market expectation on a near term Fed rate hike and support the dollar. Markets will also keep an eye at the Q&A of Yellen's testimony before the House. Political tensions in France (Fillon) and uncertainty on a solution for the Greek debt crisis are still potential euro negatives. Yesterday, the dollar profited from Yellen's comments. If the US data do not surprise on the downside, the dollar might remain well supported.

Global context: The dollar was in a corrective downtrend since the start of January as the Trump reflation trade petered out. Interest rate differentials in favour of the dollar narrowed. Trump's communication became a source of uncertainty, also for the dollar. At some point, absolute interest rate support should provide a USD floor, especially as the Fed is expected to continue its policy normalisation. Last week, the dollar showed tentative signs of a bottoming out process, supported by the ‘Trump tax promise'. Euro weakness is a factor too. As we see the 1.0874 as solid resistance, a sell EUR/USD on upticks approach is favoured. The downside test of USD/JPY is also rejected. USD/JPY 111.16 (38% retracement of the 99.02/118.66 rally) remains key support. Post- Yellen, the downside of the dollar is better protected. Even so, we are still more cautious on the upside potential of USD/JPY compared to USD/EUR.

EUR/USD: dollar extends gradual rebound post-Yellen

EUR/GBP

EUR/GBP rebound blocked on euro softness

On Tuesday, UK pipeline inflation as indicated by the input PPI rose to a higher than expected 20.5% Y/Y. However, this cost is only filtering into the final consumer prices in a very gradual way. Headline CPI printed at a lower than expected 1.8% Y/Y. Core CPI stabilised at a soft 1.6% Y/Y. Yesterday's CPI data gave the BoE the room to prologue their wait-and-see tactics. Sterling probably won't receive additional interest rate support any time soon. EUR/GBP regained the 0.85 big figure after the CPI data, but returned below the 0.85 level as Yellen's headlines weighed on EUR/USD and on EUR/GBP. EUR/GBP closed the session at 0.8482 (from 0.8460). Cable finished the day at 1.2468.

Today, the UK labour market data will be published. The UK labour market remains solid, but job growth eased of late. This picture will probably be confirmed by today's data. The wage data have most market moving potential in case of a deviation from consensus. Weekly earnings growth is expected stable at 2.8% Y/Y. Apart from a big positive surprise, there is no reason to question the BoE's wait-and-see stance. In this context, we don't expect today's data to be sterling supportive. Of course, overall euro softness is an issue for EUR/GBP. Context. Yesterday, EUR/GBP came within striking distance of the 0.8450 support, but a new test was avoided after the CPI data. The picture of EUR/GBP remains indecisive/fragile, but this is partially due to euro weakness, rather than outright sterling strength. We continue to look how the test of the key 0.8540 support turns out. In case of a break, the 0.8304 area is the next MT support. At least partially stop-loss protection on EUR/GBP longs may be considered

EUR/GBP: new test of the 0.8450 support is avoided, but picture remains fragile on euro softness

Download entire Sunrise Market Commentary

On the 4h chart of EURUSD, we are observing a nice bearish reversal taking place, with price turning down from 1.0825 where we think that wave 4) found a top. Reason for a bearish view is a break below the trendline support and push beneath 1.0620 swing which opens door for much lower levels in impulsive manner. Any bounce back to 1.0700 will be temporary and part of a downtrend.

EURUSD, 4H

A note on lower timeframe confirming price action…

Waiting for lower timeframe confirmation is our main tool to confirm strength within higher timeframe zones, and has really been the key to our trading success. It takes a little time to understand the subtle nuances, however, as each trade is never the same, but once you master the rhythm so to speak, you will be saved from countless unnecessary losing trades. The following is a list of what we look for:

• A break/retest of supply or demand dependent on which way you're trading.
• A trendline break/retest.
• Buying/selling tails – essentially we look for a cluster of very obvious spikes off of lower timeframe support and resistance levels within the higher timeframe zone.
• Candlestick patterns. We tend to only stick with pin bars and engulfing bars as these have proven to be the most effective.

EUR/USD

The US dollar received a boost going into the early hours of yesterday's US segment, as Fed Chair Yellen's testimony was upbeat on labor market conditions. This saw the EUR plummet lower, taking out both the 1.06 handle and December's monthly opening level at 1.0590, and consequently registering its fourth consecutive daily loss. Provided that the bears remain in the driving seat, we see very little H4 supports standing in the way until we reach January's opening level at 1.0515.

With the weekly bears looking on course to challenge the 2017 yearly opening level at 1.0515/weekly support area at 1.0333-1.0502, and daily demand at 1.0589-1.0662 (now acting resistance area) now out of the picture, the next downside target on the higher timeframes can be seen at a daily support level coming in at 1.0520.

Our suggestions: As per the black arrows on the H4 chart, we're ultimately looking for a retest of 1.06/1.0590 today. Assuming that this comes to fruition, and price chalks in a reasonably sized H4 bear candle, our team would, dependent on time of day, look to sell, targeting the 1.0520/1.0515 neighborhood.

Data points to consider: US CPI and US retail sales scheduled for release at 1.30pm, with another day of testimony from Fed Chair Janet Yellen at 3pm. FOMC member Harker speaks at 5.45pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 1.06/1.0590 ([waiting for a H4 bear candle to form from here is advised before pulling the trigger] stop loss: ideally beyond the trigger candle).

GBP/USD

The aftermath of yesterday's disappointing UK inflation print saw the GBP aggressively plummet lower against its US counterpart. As can be seen from the H4 scale, both December's opening base at 1.2516 and the psychological level 1.25 were taken out during this bearish assault, and only began stabilizing once price connected with the H4 mid-way support at 1.2450.

As far as structure goes, there is unfortunately very little direction seen on the bigger picture at this time. The weekly candles are currently trading mid-range between the 2017 yearly opening level at 1.2329 and a weekly Quasimodo resistance coming in at 1.2673. By the same token, a similar pattern exists on the daily chart. Daily price is loitering between a daily demand at 1.2252-1.2342 (bolstered by a daily trendline support stretched from the high 1.3437) and a daily supply penciled in at 1.2728-1.2657.

Our suggestions: Seeing as how the pair lacks higher-timeframe (structural) direction at present, our attention is drawn to the H4 supply at 1.2547-1.2520 (green circle) for a possible bounce today. In addition to this zone's strong bearish momentum, the area brings together a H4 trendline resistance taken from the high 1.2582, as well as December's opening level at 1.2516. This confluence, as long as the H4 candles do not close above 1.25 on approach, would be sufficient enough to permit a short without the need to wait for additional confirmation, in our opinion. The reason for not wanting to see a H4 close above 1.25 on approach is that there is a rather large risk that buyers will look to defend this line and with our short just a few pips above here, which would naturally put us in a vulnerable position!

Data points to consider: UK employment data at 9.30am. US CPI and US retail sales scheduled for release at 1.30pm, with another day of testimony from Fed Chair Janet Yellen at 3pm. FOMC member Harker speaks at 5.45pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 1.2547-1.2520 ([possible area to sell from without the need for additional confirmation] stop loss: 1.2252).

AUD/USD

Following Yellen's testimony the AUD/USD crumbled lower, consequently swallowing the H4 mid-way support at 0.7650, and only becoming stable once price shook hands with a H4 demand at 0.7617-0.7630 that merged nicely with two H4 trendline supports (0.7695/0.7605). On account of price whipsawing back above 0.7650 into the closing bell, where does one go from here?

We feel the commodity currency will look to challenge the tops that have formed (green circle) just ahead of the 0.77 handle today. Although this area looks tempting to short, we feel these tops, along with the 0.77 number, may be engulfed soon. Our reasoning lies within the higher-timeframe structures.

From the weekly chart, the Aussie remains lurking nearby a weekly trendline resistance taken from the high 0.8163, followed closely by a weekly supply zone logged in at 0.7849-0.7752 (bolstered by yet another weekly trendline resistance stretched from the high 0.7835). Additionally, we can also see that the weekly trendline resistance (0.8163) is positioned nearby a daily Quasimodo resistance penciled in at 0.7734 and a daily resistance at 0.7720.

Our suggestions: With the above notes in mind, we will not be looking for shorting opportunities at 0.77, but slightly above this region at 0.7752/0.7720. Ideally, a reasonably sized H4 bear candle printed from this zone would be a strong indication that the bears will likely take things lower from here. 0.7752 denotes the underside of the weekly supply, while 0.7720, as mentioned above, represents daily resistance. To that end, we feel we have a relatively strong-looking higher-timeframe sell zone in the making here.

Data points to consider: US CPI and US retail sales scheduled for release at 1.30pm, with another day of testimony from Fed Chair Janet Yellen at 3pm. FOMC member Harker speaks at 5.45pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 0.7752/0.7720 ([wait for a H4 bear candle to form before pulling the trigger] stop loss: ideally beyond the trigger candle).

USD/JPY

The impact of Yellen's testimony drove the USD/JPY skywards yesterday, reaching a high of 114.49 on the day. To make a long story short, this has brought H4 price up to a nearby area of H4 supply at 114.93-114.57, which we feel will likely hold price lower today. There are a number of technical aspects that support this view:

• A H4 trendline resistance etched from the high 115.62.
• December's opening level at 114.68.
• A H4 AB=CD approach which (symmetrically) concludes just ahead of the H4 supply mentioned above.
• Bolstered by a daily resistance area at 115.62-114.60.

Our suggestions: In light of the above confluence, our team is looking to short at 114.71, with the stop set a few pips above the H4 AB=CD 161.8% ext. (114.96) and round number (115) at 115.03. Please ignore the bold red line as this our alert, nothing more.

Data points to consider: US CPI and US retail sales scheduled for release at 1.30pm, with another day of testimony from Fed Chair Janet Yellen at 3pm. FOMC member Harker speaks at 5.45pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 114.71 ([possible market order] stop loss: 115.03).

USD/CAD

For those who read Tuesday's report on the USD/CAD you may recall our desk highlighting the possibility of a long trade from the H4 demand at 1.3006-1.3035. Our interest in this zone was sparked by the strong confluence seen comprising of the following structures: February's opening level at 1.3039, a H4 trendline support taken from the low 1.2968, a H4 AB=CD (see black arrows) 127.2% approach terminating around 1.3036 mark and to top it off there was also a daily trendline support taken from the low 1.2654 intersecting with this H4 zone.

As you can see, price responded beautifully to the top edge of this H4 area! However, we did in fact miss this setup since, as mentioned in Tuesday's analysis, we required a reasonably sized H4 bull candle to take shape here before pressing the buy button. Well done to any of our readers who managed to get in on this trade call!

Going forward, we are looking for the 1.31 hurdle to be engulfed before making any further decisions on this pair regarding buys. A H4 close above this psychological boundary would not only likely open the gates for prices to challenge the H4 mid-way resistance at 1.3150, it would also further confirm upside from the aforementioned daily trendline support and also weekly demand at 1.3006-1.3115.

Our suggestions: Should a H4 close be seen beyond 1.31 today, this would be considered a bullish cue to begin watching for price to retest this number as support. If the retest is then followed up with a lower-timeframe buy signal (see the top of this report), we would look to trade long, targeting 1.3150 as an initial take-profit target.

Data points to consider: US CPI and US retail sales scheduled for release at 1.30pm, with another day of testimony from Fed Chair Janet Yellen at 3pm. FOMC member Harker speaks at 5.45pm. Canadian manufacturing at 1.30pm GMT.

Levels to watch/live orders:

• Buys: Watch for a H4 close above 1.31 and then look to trade any retest seen thereafter ([waiting for a lower-timeframe signal to form following the retest is advised before pulling the trigger] stop loss: dependent on where one confirms this zone).
• Sells: Flat (stop loss: N/A).

USD/CHF

Let's take this from this the top this morning. Looking at the weekly chart, weekly price is currently edging above the 2016 yearly opening level at 1.0029. In order to confirm this break, however, we would require a weekly close above here. The story on the daily chart shows that the buyers and sellers are seen battling for position between a daily supply zone drawn from 1.0122-1.0060, and a daily trendline support extended from the high 0.9956.

Stepping across to the H4 candles, we can see that the unit is teasing the underside of a H4 supply coming in at 1.0094-1.0073. Downside from this angle is somewhat limited given the nearby H4 mid-way support at 1.0050, H4 trendline support extended from the high 1.0136 and H4 demand at 1.0030-1.0043. A break of the current H4 supply, on the other hand, would only see price stretch into the H4 supply marked at 1.0122-1.0097, which, as you can probably see, is positioned within the upper edge of the aforementioned daily supply area.

Our suggestions: At the time of writing, we see very little room for price to move today. With that being the case, we'll remain on the sidelines and wait for further developments.

Data points to consider: US CPI and US retail sales scheduled for release at 1.30pm, with another day of testimony from Fed Chair Janet Yellen at 3pm. FOMC member Harker speaks at 5.45pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

DOW 30

Thanks largely to an upbeat testimony from the Fed Chair Janet Yellen yesterday, the buyers printed a fourth consecutive bull candle. Given that there is absolutely no weekly resistance levels in sight, the best we can do for the time being is continue looking to ‘buy the dips'. The closest higher-timeframe area can be seen at 20003-20091: a daily demand that is positioned directly above a daily support barrier at 19964.

Our suggestions: While the newly-formed H4 demand area at 20382-20409 boasts little higher-timeframe (structural) convergence, there's a good chance that price will react from here should a pullback be seen today. However, trading this area would, at least for our team, require additional confirmation in the form a reasonably sized H4 bull candle.

Data points to consider: US CPI and US retail sales scheduled for release at 1.30pm, with another day of testimony from Fed Chair Janet Yellen at 3pm. FOMC member Harker speaks at 5.45pm GMT.

Levels to watch/live orders:

• Buys: 20382-20409 ([wait for a H4 bull candle to form before looking to execute a trade] stop loss: ideally beyond the trigger candle).
• Sells: Flat (stop loss: N/A).

GOLD

Despite the gold market recently tapping the underside of a weekly resistance level at 1241.2, H4 demand at 1221.5-1224.8, along with a daily support area at 1232.9-1224.5, continue to hold ground. For those who have been following our reports on gold recently you may recall our desk highlighting a short position we took from 1239.6, with a stop logged in at 1245.4. As mentioned in Friday's report, we liquidated 70% of the position around the 1227.6-1230.5 area (which represented H4 demand at the time) and reduced risk to breakeven. Our next port of call for profit taking is still seen at February's opening base drawn from 1211.5. However, before this can be achieved, price will have to overcome the current H4 demand area.

Our suggestions: What is still quite notable from recent trade is the possible H4 AB=CD pattern (see black arrows) terminating at the H4 161.8% ext. at 1207.8. Notice that it not only bottoms nearby the February opening level at 1211.5, it is also located nearby a H4 trendline support etched from the low 1145.9 (1207.8/1211.5 yellow zone). Not only is this a reasonable area to take profits on our current short position at 1239.6, it's also a platform in which one could potentially hunt for long opportunities. With this area lacking higher-timeframe (structural) convergence, however, we would require a H4 bull candle to form here in order to validate this area before pulling the trigger.

Levels to watch/live orders:

• Buys: 1207.8/1211.5 ([wait for a H4 bull candle to form before looking to execute a trade] stop loss: ideally beyond the trigger candle).
• Sells: 1239.6 ([live order] stop loss: breakeven).

Currency pair USD/JPY

The USD/JPY has broken multiple resistance levels (dotted orange) and is continuing with its uptrend within wave 3 (blue). A bullish channel (red/green) is visible at the moment: a break above resistance (red) could see an acceleration of the trend whereas a failure to break could see price retest the bottom of the channel.

The USD/JPY needs to break above resistance (red) and the top to expand the channel and extend the wave 3 (orange). The Fibonacci levels could as support if price fails to break resistance (red) and breaks below the small correction (purple).

Currency pair EUR/USD

The EUR/USD turned at the resistance (red) of the bearish channel to post a new lower low, which keeps the wave 3 (blue) momentum alive. Price will not to break below the 100% Fibonacci target of wave 3 vs 1 to increase the chances of a wave 3 (blue) developing.

The EUR/USD completed a pullback for a wave 4 (blue) and is building a new bearish wave 5 (blue). A 5 wave extension (orange) seems to be taking place within that wave 5 (blue). A bullish retracement that stays below the 61.8% Fibonacci level of wave 4 vs 3 and the resistance of the bearish channel could see a continuation of the bearish trend. A break above that point invalidates the wave 4 (orange).

Currency pair GBP/USD

The GBP/USD failed to show a bullish breakout yesterday and is expanding the correction. The support (green) and resistance (red) trend lines indicate the key decision zones within a larger triangle (dark red/blue/dark rgeen).

The GBP/USD failure to break the top of wave 1 (orange) indicates that price built an ABC (grey) zigzag within wave B (purple). Price seems to be building a larger correction (purple ABC) within a wave 2 (orange) which becomes invalided with a break below the 100% Fib level of wave 2 vs 1.