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Daily Pivots: (S1) 1.2381; (P) 1.2428; (R1) 1.2482; More...

Intraday bias in GBP/USD remains on the downside for the moment. Rebound from 1.2108 should have completed at 1.2614 already. Deeper fall should be seen back to 1.2108 support. As noted before, price actions from 1.1946 are viewed as a consolidation pattern pattern. Break of 1.2108 support will be the first sign of larger down trend resumption and would target 1.1946 low for confirmation. On the upside, above 1.2475 minor resistance will turn bias back to the upside for 1.2614 resistance instead.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term reversal yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.

'The euro fell the most in five weeks on a report that European Central Bank officials are wary of changing their dovish message and after the U.K. set in motion the first withdrawal of a country from the European Union.' – Lananh Nguyen and Vincent Cignarella, Bloomberg

Pair's Outlook

On Thursday morning the common European currency traded against the US Dollar near the 1.0750 level, as it was fluctuating between two levels of significance. The rate reached this level due to fundamental events like dovish ECB monetary policy signals and the triggering of Article 50 by the UK. From the upside the currency exchange rate is facing the combined resistance of the monthly R1 at 1.0772 and weekly PP at the 1.0780 mark. Meanwhile, immediate support to the pair was provided by the weekly S1 at 1.0736. It is likely that the rate will continue to move lower in the near future, as that is the medium term direction set by the rebound from the long term resistance line.

Traders' Sentiment

SWFX traders remain bearish, as 62% of open positions are short and 62% of trader set up orders are to sell.

'Given the positioning, our bias would still be toward a stronger pound over the coming weeks.' – MUFG (based on Business Recorder)

Pair's Outlook

The GBP/USD currency pair managed to avoid serious losses on Wednesday, as the weekly PP, the 55 and the 100-day SMAs provided sufficient support. The Cable remains on the back foot, but the immediate demand cluster could still keep the exchange rate above the 1.24 mark today. Technical studies in the daily timeframe support this outlook, but given the latest developments, more downside is expected. On the other hand, from the technical perspective there might soon be a relatively strong purchase signal, which implies the Pound could strengthen against the Buck and erase all this week's losses.

Traders' Sentiment

There are 59% of traders holding long positions today (previously 57%). At the same time, the share of sell orders inched up from 55 to 56%.

Daily Pivots: (S1) 0.9924; (P) 0.9950; (R1) 0.9988; More.....

Intraday bias in USD/CHF remains on the upside for the moment. A short term bottom is in place at 0.9812 on bullish convergence condition in 4 hour MACD. Further rise should be seen to 55 day EMA (now at 1.0021). Sustained trading above there will argue that whole decline from 1.0342 has completed. Further rise should then be seen to 1.0169 resistance for confirmation. On the downside, below 0.9912 minor support will turn bias back to the downside for 0.9812 instead.

In the bigger picture, USD/CHF is staying in medium term sideway pattern between 0.9443/1.0342. In any case, decisive break of 1.0342 resistance is needed to confirm underlying strength. Otherwise, we'll stay neutral in the pair first. In case of deeper fall, we'd expect strong support from 0.9443/9548 support zone.

'It is too early to expect a sustained recovery even though on the converse, the odds for a break below 110.00 have diminished considerably.' – UOB (based on FXStreet)

Pair's Outlook

Even though the Greenback weakened against the Yen on Wednesday, no significant losses were registered, with the pair remaining above 111.00. The nearest resistance is still the monthly S1 at 111.26, which is expected to prevent the USD/JPY pair from climbing higher today. Being that there is barely any room for a rally, the bearish development is the most probable outcome. Furthermore, technical indicators also suggest the US Dollar is to edge lower today. Although the nearest support rests at 110.35, namely the weekly S1, the 110.60 level appears to be providing strong psychological support, forming the lower boundary of the pair's consolidation range.

Traders' Sentiment

Market sentiment remains bullish at 72%, but all pending orders are now equally divided between the buy and the sell ones.

'The market seemed to take the notification of the article 50 in the UK relatively smoothly, but I suspect the worst is yet to come on that.' – Daniel Hynes, ANZ (based on Reuters)

Pair's Outlook

The yellow metal continued to trade between two clusters of significance on Thursday morning, as it had done for the past two trading sessions. From the upside the bullion faces the first weekly resistance at 1,254.87, which is combined with the 200-day SMA at 1,257.79. From the downside the currency exchange rate is finding support in the 50.00% Fibonacci retracement level at the 1,248.96 mark and the already broken down-trend line, which remains significant at 1,246.78. It is highly likely that the bullion will continue the surge in the near future.

Traders' Sentiment

Traders remain neutral bearish, as 51% of open positions are short on Thursday. Meanwhile, 63% of trader set up orders are to buy the metal.

Cable is holding above strong supports at 1.2420/14 (Fibo 38.2% of 1.2107/1.2613 / 100SMA) in early Thursday's trading, following choppy action on Wednesday.

Uncertainty at the beginning of Brexit process kept traders nervous, with the pair trading within 100-pips range on Wednesday (1.2474/1.2374), but long-legged daily candle signaled strong indecision and no clear direction.

Return above 1.2420/13 pivots slightly eased downside pressure, but risk of fresh weakness exists, as the pair broke into daily cloud (spanned between 1.2356 and 1.2473).

Mixed daily technical studies require break of pivotal points on either side to for clearer direction signal.

At the upside, daily cloud top at 1.2473, reinforced by Tenkan-sen line, marks the first upper trigger, with extension above 1.2500 (top of hourly Ichimoku cloud that caps near-term action) needed to signal stronger upside attempts.

On the downside, loss of 1.2420/13 pivots would risk fresh weakness towards lower triggers at 1.2360/56 (daily Kijun-sen / cloud base) and signal bearish continuation on firm break lower.

Res: 1.2466, 1.2473, 1.2500, 1.2522
Sup: 1.2414, 1.2395, 1.2356, 1.2338

The Euro remains biased lower after past two days in red and sees scope for extension of pullback from 1.0905 towards next strong support at 1.0700 (daily Kijun-sen / 50% retracement of 1.0493/1.0905 upleg).

Near-term action is holding in narrow consolidation above hourly base at 1.0738 (lows of 29 Mar / today), with risk shifted lower on weak near-term studies.

Extension of bear-leg from 1.0905 requires sustained break below 1.0748 (Fibo 38.2% of 1.0493/1.0905, as previous two attempts failed to close below this pivot).

However, daily studies remain bullish overall and see fresh upside attempts on completion of current corrective phase.

Extended dips on breach of 1.0748 pivot, should be ideally contained above 1.0700, to keep scenario in play.

Otherwise, increased downside risk could be anticipated on loss of 1.0700 support.

Res: 1.0768, 1.0784, 1.0825, 1.0841
Sup: 1.0748, 1.0738, 1.0700, 1.0673

EUR/USD

Current level - 10752

The outlook remains bearish, for a slide towards 1.0710, en route to 1.0600 static support. Initial resistance lies at 1.0780, followed by 1.0828.

Profit-taking affects gold curbing silver and platinum

USD/JPY

Current level - 111.16

Yesterday's precise test of 110.70 support area has failed and the outlook is bullish, for a break through 111.45, towards 112.26 zone.

GBP/USD

Current level - 1.2434

The bias is still negative below 1.2470, for a slide towards 1.2330, en route to 1.2240. Crucial on the upside is 1.2530.

EUR/JPY - 119.30

Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79

Trend: Near term up

New strategy :

Sell at 120.40, Target: 118.40, Stop: 121.00

Position: -
Target:  -
Stop:-

As the single currency finally resumed recent decline from 122.89 and bearishness remains for further weakness to 118.80 and later test of support at 118.67, however, break there is needed to retain bearishness and extend further decline to previous chart support at 118.25, risk from there is seen for a rebound later.

In view of this, would not chase this fall here and would be prudent to sell euro on subsequent rebound as resistance at 120.44 should cap upside and bring another decline. Above 1121.00 would abort and suggest low is possibly formed, risk rebound to 121.50 but resistance at 121.84 should hold from here, bring another decline later.

Our latest preferred count is that wave (ii) is ABC-X-ABC which ended at 123.33 and wave (iii) is unfolding with wave iii ended at 100.77, followed by wave iv at 111.57 and wave v as well as the wave (iii) has ended at 97.04, followed by wave (iv) at 111.43 and wave (v) has ended at 94.12 which is also the end of the larger degree v, this also implied the major wave (C) has also ended there, hence major correction has commenced from there with (A) leg unfolding in its lower degree wave c which has possibly ended at 145.69. Under this count, A-B-C wave (B) has commenced with A leg ended at 136.23, wave B at 143.79 and wave C has possibly ended at 149.79.

Our larger degree count is that the decline from 139.26 is wave (C) and is sub-divided into a diagonal triangle i-ii-iii-iv-v with wave i - 105.44, wave ii- 123.33, wave iii - 97.03, wave iv - 111.43, followed by the final wave v as well as the end of wave (C) at 94.12, this also mark the bottom of larger degree wave B. Under this count, major rise in wave C has commenced as an impulsive wave with minor wave III ended at 145.69, wave V is still in progress for further gain to 150.00. Having said that, this so-called wave V could well be the first leg of larger degree 5-waver wave C and this wave C should bring at least a retest of wave A top at 169.97 (July 2008).