Sample Category Title

Key Highlights

• EUR/USD is showing positive signs above the 1.0800 support.
• It is eyeing an upside break above the 1.0880 resistance on the 4-hour chart.
• Gold price took a hit and declined below $2,350.
• GBP/USD could gain bullish momentum if it clears the 1.2750 resistance.

EUR/USD Technical Analysis

The Euro remained well-bid above the 1.0800 level against the US Dollar. EUR/USD formed a base and started a fresh increase above the 1.0825 resistance.

Looking at the 4-hour chart, the pair even settled above the 200 simple moving average (green, 4-hour) and the 100 simple moving average (red, 4-hour). The pair spiked above the 50% Fib retracement level of the downside correction from the 1.0895 swing high to the 1.0804 low.

The pair is now attempting an upside break above a connecting bearish trend line with resistance at 1.0860. It is near the 61.8% Fib retracement level of the downside correction from the 1.0895 swing high to the 1.0804 low.

A clear move above the 1.0860 resistance might send it toward the 1.0900 level. Any more gains might call for a move toward the 1.0950 level in the near term.

If there is no move above the 1.0860 resistance, the pair might correct gains. Immediate support is near the 1.0820 level. The next major support is at 1.0800 and the 100 simple moving average (red, 4-hour).

If there is a downside break below the 1.0800 support, the pair might test the 200 simple moving average (green, 4-hour) at 1.0750. Any more losses might send the pair toward the 1.0720 level.

Looking at Gold, the bears pushed the price further lower and there was a move below the $2,350 support zone.

Economic Releases

• German IFO Business Climate Index for May 2024 – Forecast 90.3, versus 89.4 previous.
• German IFO Current Assessment Index for May 2024 - Forecast 89.9, versus 88.9 previous.
• German IFO Expectations Index for May 2024 – Forecast 90.5, versus 89.9 previous.

• Brent Crude oil reversed from strong support level 81.00
• Likely to rise to resistance level 84.3

Brent Crude oil recently reversed up from the support area located between the strong support level 81.00, which has been reversing the price from February, and the lower daily Bollinger Band.

The support level 81.00 was strengthened by the nearby lower daily Bollinger Band and by the 61.8% Fibonacci correction of the upward impulse 1 from December.

Given the bullish divergence on the daily Stochastic, Brent Crude oil can be expected to rise further to the next resistance level 84.30.

EUR/USD: The Battle of Europe and US PMIs

Overall, the past week favoured the dollar, but the advantage over the European currency was minimal. If you look at where the EUR/USD pair was on 15 May, it returned to this zone on 24 May, regaining the losses of recent days. Recall that the report from the US Bureau of Labor Statistics (BLS) released on 15 May showed that the Consumer Price Index (CPI) decreased from 0.4% to 0.3% month-on-month (m/m), against a forecast of 0.4%. On an annual basis, inflation also fell from 3.5% to 3.4%. Retail sales volume demonstrated an even more significant decline, from 0.6% to 0.0% month-on-month (forecast 0.4%). These data indicated that inflation in the country, though resistant in certain areas, is still on the decline. At that moment, there were renewed discussions in the market about a possible rate cut by the Fed as early as this autumn. As a result, the Dollar Index (DXY) went down, and EUR/USD went up. Stock indices S&P 500 and Nasdaq reached record highs.

The most volatile day of the past week was Thursday, 23 May. Preliminary business activity data in the Eurozone exceeded expectations, strengthening the euro and lifting the pair to 1.0860. In Germany, the main locomotive of the European economy, the Manufacturing PMI rose from 42.5 to 45.4 points (forecast 43.2). This is still below the 50.0-point threshold separating decline from growth, but the trend is clearly positive. The Services PMI reached its highest level since June last year, hitting 53.9 against a forecast of 53.5 and a previous value of 53.2.

Germany's Composite PMI increased from 50.6 to 52.2 (market expectations were 51.0). Overall, business activity statistics in the Eurozone were also positive. The Composite PMI updated multi-month highs and, with a forecast of 52.0, actually reached 52.3 points (previous value 51.7).

However, the euro bulls' joy was short-lived. Later on Thursday, similar preliminary data on the US economy were released. They showed that business activity in the country's private sector grew at the highest rate in the past two years. The Manufacturing PMI rose from 50.0 to 50.9 points, and the Composite PMI jumped from 51.3 to 54.8 in a month. Market expectations were much lower, at the previous level of 51.3, so such a sharp rise signalled a surge in the DXY to 105.05 and a fall in the EUR/USD pair to 1.0804, as the likelihood of a rate cut in September decreased.

But the bears' joy was also short-lived. The GDP data released on Friday, 24 May, for Q1 2024 in Germany showed that the country's economy is saying goodbye to recession and moving into the growth zone. After a decline of -0.3%, GDP increased by 0.5%, resulting in a net growth of +0.2%.

In the end, after all these fluctuations, EUR/USD returned to the Pivot Point of the past one and a half weeks, closing at 1.0845. As for analysts' forecasts for the near future, as of the evening of 24 May, most (65%) expect the dollar to strengthen, 20% expect it to weaken, and the remaining 15% are neutral. All trend indicators on D1 are green, while 60% of oscillators are also green. Another 15% are red, and 25% are neutral grey. The nearest support for the pair is in the zones of 1.0830-1.0840, 1.0800-1.0810, then 1.0765, 1.0710-1.0725, 1.0665-1.0680, and 1.0600-1.0620. Resistance zones are located at 1.0880-1.0895, 1.0925-1.0940, 1.0980-1.1010, 1.1050, and 1.1100-1.1140.

The following week's calendar highlights Tuesday, 28 May, when the US Consumer Confidence Index will be announced. On the next day, 29 May, data on consumer inflation (CPI) in Germany will be released. On Thursday, 30 May, preliminary US GDP data for Q1 2024 will be published. The last working day of the week and the month might be quite eventful. On Friday, 31 May, Germany's retail sales volumes, preliminary inflation indicators (CPI) in the Eurozone, and the US Core Personal Consumption Expenditure Price Index will be announced. Traders should also note that Monday, 27 May, is a public holiday in the US, as the country observes Memorial Day.

GBP/USD: Uncertain Times for the Pound

The prospects for the British currency, as well as the national economy as a whole, are ambiguous. Additional uncertainty is brought by the fact that early parliamentary elections are scheduled for 4 July. As Prime Minister Rishi Sunak stated, "economic instability is just the beginning. [...] The time has come for Britain to make a choice. [...] Uncertain times require a clear plan and bold actions." However, what these "bold actions" will be remains unknown.

The macro statistics released last week did not add clarity. The preliminary Services PMI in the UK decreased from 55.0 to 52.9 points in May, against expectations of 54.7. And although in the manufacturing sector, this figure increased from 49.1 to 51.3, the Composite PMI stood at 52.8, below both the previous value of 54.1 and market expectations of 54.0.

As the latest data from the Office for National Statistics (ONS) showed, published on Friday, 24 May, retail sales in the country fell by -2.3% (m/m) in April, against a forecast of -0.4% and a result of -0.2% in March. The annual retail sales volume decreased by -2.7% compared to the previous result of -0.4%, and core retail sales fell by -3.0% (y/y) against 0% a month earlier, with all figures significantly below forecasts.

In such a situation, experts' opinions regarding the timing of the Bank of England's (BoE) rate cut also do not provide clear guidance. Analysts at JP Morgan (JPM) stick to their previous forecast of a rate cut in August but are cautious, citing still high consumer price inflation (CPI). "We adhere to our forecast [...] but believe that the risks have clearly shifted towards a later cut. Now it is a question of whether the Bank of England will be able to ease its policy at all this year." Strategists at Goldman Sachs, Deutsche Bank, and HSBC have also shifted their rate cut forecasts, moving the date from June to August for now. But this is only "for now"...

The maximum of the past week for GBP/USD was recorded at 1.2760. According to economists from Singapore's United Overseas Bank (UOB), the pair's upward momentum has slowed, and the likelihood of the pound rising to 1.2800 is decreasing. UOB believes that in the next 1-3 weeks, the British currency will trade in the range of 1.2685 to 1.2755.

The week ended at 1.2737. The median forecast of analysts for the near future is as follows: 60% voted for the pair's movement to the south, 20% for the northern direction, and 20% preferred neutrality. As for technical analysis, all trend indicators and oscillators on D1 point north, but a third of the latter signal overbought conditions. In case of further decline, the pair will encounter support levels and zones at 1.2695, 1.2635, 1.2575-1.2600, 1.2540, 1.2445-1.2465, 1.2405, 1.2300-1.2330. In case of growth, the pair will meet resistance at levels 1.2760, 1.2800-1.2820, 1.2885-1.2900.

No significant economic data releases for the United Kingdom are scheduled for the coming week. However, it should be noted that Monday, 27 May, is a bank holiday in the UK.

USD/JPY: Calmness, Ladies and Gentlemen, Just Calmness!

For such a super-volatile pair as USD/JPY, the past week was surprisingly calm. There were no currency interventions, and verbal interventions were as usual – lots of words, little action. Thus, Japan's Finance Minister Shunichi Suzuki once again expressed concern about rising prices caused by the weak national currency. According to Suzuki, one of the main goals of monetary authorities is to achieve wage growth exceeding inflation. "On the other hand," the minister added, "if prices remain high, achieving this goal will be difficult." In general, as usual, the government is closely monitoring the situation, understanding that everything is complicated, and therefore ... will continue to monitor.

Based on this contemplative policy, despite the GDP decline in Q1, on Thursday, 23 May, the Bank of Japan (BoJ) announced that it left the issuance volumes of Japanese government bonds (JGB) at the previous level. According to BoJ Governor Kazuo Ueda, "the economic outlook has not changed." The BoJ's view of the global economy has also not changed significantly. In general, calmness, ladies and gentlemen, just calmness!

Against this positive background, USD/JPY pair reacted only to the yield of US Treasury bonds and the dynamics of the Dollar Index (DXY). As a result, starting the five-day period around 155.70, it gradually moved up and ended it at 156.96. Analysts at United Overseas Bank (UOB) believe that given the weak upward pressure, the pair's growth in the next 1-3 weeks will be slow, and the barrier at 157.50 may prove to be a tough nut to crack. In their opinion, a price breakthrough above 157.00 is possible, but the pair is unlikely to consolidate above this level. The next resistance at 157.50 is unlikely to be threatened. UOB estimates that support is at 156.40, followed by 156.10. If USD/JPY falls below 155.60, it will indicate that the slight upward pressure has weakened, write the bank's economists.

Speaking of the average forecast, only 20% of analysts point south, 40% north, and another 40% east. Technical analysis tools are clearly devoid of such disagreements. Therefore, all 100% of trend indicators and oscillators on D1 point north, with 20% of the latter already in the overbought zone. It should be noted that while the green/north color of indicators regarding the British pound indicates its strengthening, in relation to the yen, it signals its weakening. Therefore, we advise paying attention to the GBP/JPY pair, whose dynamics have been very impressive lately.

The nearest support level is around 156.25, followed by zones and levels of 155.25-155.45, 154.60, 153.60-153.90, 153.00-153.15, 151.85-152.35, 150.80-151.00, 149.70-150.00, 148.40, 147.30-147.60, and 146.50. The nearest resistance is in the zone of 157.20, followed by 157.80-158.00, 158.45, 159.40, and 160.20-160.30.

From the events of the upcoming week, we recommend noting the speech of the Bank of Japan Governor Kazuo Ueda on Monday, 27 May, as well as the publication of consumer inflation (CPI) data in the Tokyo region on Friday, 31 May.

CRYPTOCURRENCIES: A Week Under the Ethereum Flag

In 2024, the crypto community began gradually forgetting the term "crypto winter." However, there was no talk of a "crypto spring" either. After the halving on 12 April, in the absence of a bull rally, small traders and speculators began selling off their coin reserves. According to The Block Research, the rate of opening new BTC wallets fell to a six-year low. However, the whales buying digital gold for the future prevented a complete collapse in prices.

And finally, at the end of the calendar spring, it seems spring has come to the crypto market. And it was awakened by the Federal Reserve System (Fed) of the USA with its monetary policy. According to analysts, the surge in investments in digital assets was a response to the May consumer inflation (CPI) report in the US, which positively impacted the risk appetites of institutional investors.

According to CoinShares, investments in crypto funds increased by $932 million from 13 to 17 May, after an inflow of $130 million the previous week. For the first time, there was an inflow of $18 million into Grayscale's ETF. This sharp increase in BTC-ETF investments, the highest in the last nine weeks, triggered a sharp rise in bitcoin on 20-21 May, approaching $72,000 for the first time since 09 April.

After bitcoin rose above $71,000, its price updated historical highs in the local currencies of several Asian and South American countries. According to CoinMarketCap, in Japan, BTC reached a record level of 11.2 million yen at the start of trading on 21 May. This is the first case where the flagship asset's price exceeded 11 million yen. Digital gold prices also peaked in Argentina, where the leading cryptocurrency reached 63.8 million Argentine pesos, slightly above the maximum on 14 March.

In the Philippines, one bitcoin briefly rose to 4.18 million pesos, the highest since mid-March 2024. In several other countries, BTC prices also equalled or were very close to mid-March's maximum prices: in the UK, Australia, Canada, Chile, Colombia, Egypt, Israel, Norway, India, South Korea, Taiwan, and Turkey.

However, the Fed and American macro statistics, having awakened the markets, also calmed them. After strong business activity data in the US, BTC/USD returned to the support zone of $67,000. Another (and probably the main) reason why bitcoin could not update its historical high was its main competitor, ethereum, which drew investors' attention. (More on this below).

QCP Capital expects bitcoin to reach $74,000 and update its ATH (All-Time High) in the coming months. According to the company's economists, institutional acceptance of cryptocurrency is accelerating, and improving conditions in the global economy create conditions for capital inflows into risky assets. The US presidential election, scheduled for 5 November 2024, is also starting to have a strong positive impact on the cryptocurrency market.

Cryptocurrency themes continue to strengthen in the pre-election rhetoric of candidates seeking to gain the votes of the crypto community, which, according to NYDIG, numbers more than 46 million citizens in the US, or 22% of the adult population. Haseeb Qureshi, Managing Partner of Dragonfly Capital, believes that in such a situation, the administration of President Joseph Biden will soon be forced to ease its policy regarding the digital asset industry. A complete turnaround is not to be expected, but a softening of the position will still occur, Qureshi said.

CNN has recently reported on upcoming debates between Biden and his competitor, Donald Trump. The incumbent president will have to answer a number of uncomfortable questions about the harsh policy towards the crypto industry, which led to the outflow of cryptocurrency capital, the closure of large companies, and high-profile lawsuits. From Donald Trump, who turned the topic of cryptocurrency into a weapon against his opponent, in addition to attacks for the current state of affairs, loud pre-election promises can be expected, which could lead to significant volatility in the crypto market. Possible participation of Elon Musk, who expressed willingness to become a moderator, and independent candidate Robert Kennedy Jr., should enliven the debates, the first round of which is scheduled for 27 June, and the second for 10 September.

The main beneficiary of the past week was not bitcoin but ethereum. On Monday, 20 May, news reached the media that the US Securities and Exchange Commission (SEC) asked companies to update Form 19b-4 in applications for launching spot Ethereum ETFs in an accelerated manner. After these news, the financial agency Bloomberg immediately raised the chances of such funds being approved from 25% to 75%. Against this background, the leading altcoin quickly outpaced the flagship cryptocurrency in terms of growth rates.

The deadline for the first two applications from VanEck and Grayscale was Thursday, 23 May. Shortly before the X hour, ETH/USD reached $3,947, showing a growth of almost 30% in three days. According to Coinglass, the amount of liquidations and forced closures of short positions on crypto exchanges amounted to $340 million. A total of 78.8 thousand positions were liquidated, and the largest individual liquidation occurred on the HTX exchange for the ETH/USDT pair for $3.1 million.

The SEC did not disappoint expectations and on 23 May approved not two but a total of eight applications for the issuance of spot ETFs based on Ethereum and gave the go-ahead for trading and listing these funds on exchanges. According to Variant Investments Chief Legal Officer Jake Chervinsky, this step signals a "significant shift in US crypto policy, possibly more important than the ETFs themselves." This may also mean that recognizing ethereum as a commodity, the regulator will not categorize many other altcoins as securities. According to Rekt Capital, the market is already on the verge of an altcoin rally, the peak of which is expected in July.

Experts expect significant capital inflows after the listing of ETH-ETFs and believe that billions of dollars will be invested in derivatives in the first week after trading starts. Analysts from QCP Capital believe that the altcoin rate in the short term can rise to $4,000 and exceed $5,000 by the end of the year.

An even bolder forecast is given by Standard Chartered Bank economists. They expect capital inflows into such funds in the first year to range from $15 to $45 billion (2-9 million ETH). In this case, the fund's demand will lead to the asset's rate rising to $8,000 at a bitcoin rate of $150,000. Moreover, if market dynamics are positive, by 2025, the price of Ethereum will reach $14,000, and bitcoin's rate will increase to $200,000.

As of the evening of Friday, 24 May, BTC/USD is trading at $69,900, and ETH/USD at $3,735. The absence of an immediate pump and some drawdown of this pair on 23-24 May can be explained by the fact that everyone who wanted to has already managed to buy ethereums ahead of the SEC's historic decision. The total cryptocurrency market capitalization is $2.55 trillion ($2.42 trillion a week ago). The Bitcoin Fear & Greed Index (Crypto Fear & Greed Index) has not changed and remains in the Greed zone at 74 points.

And in conclusion of the review, forecasts from Artificial Intelligence. The latest version of GPT-4o from OpenAI believes that the price of bitcoin on 1 August 2024 will be in the range of $76,348 to $89,108 "considering current market factors and historical trends." GPT-4o's competitor, the anthropic AI model Claude 3 Opus, has formed an even more optimistic vision, designating the range between $105,072 and $167,808 by the indicated date.

Last week, global financial markets were heavily influenced by evolving expectations surrounding central bank monetary easing paths and unexpected political developments. British Pound emerged as the most significant gainer, buoyed by fading expectations of an immediate BoE rate cut in June. This shift was precipitated by latest inflation data and compounded by the UK government's unexpected decision to hold an election in July. This combination of factors not only boosted the Pound but also contributed to a downturn in FTSE.

Dollar secured the position as the second strongest currency even though its momentum was relatively weak. Markets adjusted their expectations on Fed, moving away from anticipating a rate cut in September. This reassessment followed revelations from the hawkish tones in FOMC minutes and was supported by robust economic data. In the equity markets, results were mixed; DOW underperformed relative to S&P 500 and, notably, NASDAQ, which benefited from sector-specific dynamics.

Euro ranked as the third strongest performer after ECB officials moderated expectations for further policy easing beyond the anticipated conditional cut in June. This cautious stance from the ECB helped temper aggressive market speculations about continued easing.

Conversely, Australian Dollar was the week's weakest performer. Despite hawkish minutes from RBA, Aussie was adversely affected by a broader shift in global market sentiment, especially with regards to China. Yen and Swiss Franc also underperformed, reflecting broader trends in risk sentiment and monetary policy expectations.

New Zealand Dollar found itself in a middling position despite hawkish hold by RBNZ. Canadian Dollar also displayed mixed performance amidst these global shifts.

Sterling Rallies as Expectations for BoE Rate Cut Deferred to August

Sterling stood out as last week's best performer, buoyed by the CPI report that came in stronger than anticipated, thus tempering expectations for an imminent rate cut by BoE in June. While the headline inflation rate for April showed significant deceleration, dropping from 3.2% to 2.3%, and core inflation also decreased from 4.2% to 3.9%, both figures exceeded market predictions.

More concerning was that services inflation only slightly decreased from 6.0% to 5.9%. That pointed to continued elevated domestic price pressures, particularly in sectors less responsive to monetary policy adjustments. This subtle decline indicates that underlying inflationary forces remain elevated.

Complicating matters further, former BoE policymaker Michael Saunders commented on the impact of UK government's decision to hold an election on July 4. He noted that this political event solidified the already unlikely prospect of a June rate cut. BoE has since declared a moratorium on all speeches and public statements by its policymakers during the election campaign period. This communication blackout limits the Bank's ability to prepare the markets for and elucidate the rationale behind a June rate cut, effectively taking such a move off the table.

Despite this, several top BoE officials have continued to suggest that a rate cut later in the summer could be feasible. Leading economists from major banks, including Goldman Sachs Group Inc., Morgan Stanley, HSBC Holdings Plc, and Barclays Plc, have adjusted their forecasts, now projecting that BoE will likely lower borrowing costs in August instead of the upcoming June policy meeting.

GBP/CHF finally broke through 1.1574 resistance to resume the medium term rebound from 1.0183 (2020 low). Near term outlook will stay bullish as long as 1.1509 resistance turned support holds. Next target is 100% projection of 1.083 to 1.1574 from 1.0634 at 1.2025. Sustained break there could prompt further upside acceleration, and strengthen the case of long term bullish trend reversal.

EUR/GBP is now eyeing 0.8491/7 key support zone. Decisive break there will confirm resumption of whole down trend from 0.9267 (2022 high). Next target is 100% projection of 0.8764 to 0.8497 from 0.8643 at 0.8376. Fall from could be interpreted as the third leg of the pattern from 0.9499 (2020 high0. Firm break of 0.8376 would pave the way towards 0.8201 (2022 low).

FTSE extended the correction from 8474.41 record high in response to the developments. First level support is seen as 223.6% retracement of 7404.08 to 8474.41 at 8221.81. Strong support from there will keep the correction a near term one. Further break of 8474.41 will target 100% projection of 6707.62 to 8047.06 from 7404.08 at 8743.52. However, strong break of 8221.81 will indicate that lengthier and deeper correction is underway to 38.2% retracement at 8065.81 instead.

Australian Dollar Struggles Despite Bullish Domestic Developments

Australian Dollar the week as the weakest performer despite some bullish domestic developments. According to minutes from RBA's meeting on May 7, a rate hike was indeed contemplated but ultimately set aside. The decision to maintain the cash rate target at 4.35% was only based on the assessment that recent economic data did not yet justify a change in policy.

Further domestic data showed robust economic activity, with April's PMIs indicating that the economy remains solidly in expansion territory. At the same time, composite input price index, reached a six-month high, and manufacturing input prices at a one-year peak, with service industry cost pressures rising slightly, suggest persistent inflation pressures that are unlikely to abate in the near term.

Aussie's weakness was more attributed to the downturn in global risk sentiment, including the developments in China. Shanghai SSE experienced significant declines on Thursday and Friday, reacting to the realization that high US interest rates might persist longer than previously expected. Additionally, geopolitical tensions flared as China conducted military exercises around Taiwan for consecutive days, as so-called "punishment" on Taiwan's new President Lai Ching-te after his inauguration.

A short term top should be formed at 3174.26 in Shanghai SSE, on bearish divergence condition in D MACD. Deeper correction could be seen through 55 D EMA (now at 3088.87). But strong support should emerge from 38.2% retracement of 2635.08 to 3174.26 at 2968.29 to bring rebound. That is, 3000 psychological level should broadly hold. Another rise through 3174.26 remains in favor. But for the near term, extended pullback in SSE could cap Aussie's rebound.

Compounding Australian Dollar's challenges was its performance selloff against New Zealand Dollar. RBNZ's decision to hold Official Cash Rate unchanged at 5.50% came with a hawkish tilt. The central bank raised its projected rate path, indicating increased possibility of a rate hike later this year while pushing the timeline for rate cuts to the latter half of 2025.

AUD/NZD's break of 1.0852 cluster support (38.2% retracement of 1.0567 to 1.1027 at 1.0851) suggests that whole rise from 1.0567 has completed at 1.1027, ahead of 1.1050/85 key resistance zone. Fall from 1.1027 is now seen as another downleg in the medium term range pattern from 1.1085. Deeper fall should be seen to 61.8% retracement at 1.0743, or even to 1.0567 support.

Hawkish FOMC Minutes Spur Sentiment Change, Leading to Dollar Recovery

Sentiment in the US financial markets displayed notable divergence. DOW closed the week down -2.33%, marking its first negative week after four consecutive weeks of gains. In contrast, NASDAQ demonstrated resilience with 1.41% increase, while S&P 500 ended nearly flat, edging up by a mere 0.03%.

This mixed performance in major indexes came amid shifting expectations regarding US monetary policy. The minutes from the latest FOMC meeting indicated that there is an openness among various participants to tighten monetary policy further if inflation risks escalate to a degree that necessitates such action.

This revelation has led economists and traders to recalibrate their expectations regarding the timing of Fed's first rate cut. The likelihood of a 25 bps reduction in September has now diminished to just under 50%. Furthermore, the market has also begun to price in a 0.5% chance of a rate hike—a scenario that had not been considered likely for some time.

There are various interpretation in DOW's price actions. The first line of support could come from 55 D EMA (now at 38856.99). Strong rebound from there will keep the corrective pattern from 40077.40 relatively brief. However, considering bearish divergence condition in D MACD, strong break of 55 D MEA will argue that lengthier correction is underway, with risk of deeper pullback to 38.2% retracement of 32327.20 to 40077.50 at 37116.82.

While Dollar index recovered fro medium term rising channel support, momentum has been far from convincing. Risk will stay on the downside as long as 105.74 resistance holds. Firm break of 104.08 would indicate that whole rise from 100.61 has completed with three waves up to 106.51 already. Fall from 106.51, as another down leg in the sideway pattern from 99.57, would target 102.35 and then 100.61. Nevertheless, break of 105.74 will retain near term bullishness.

GBP/JPY Weekly Outlook

GBP/JPY's rally from 191.34 continued last week and outlook is unchanged. This rise is still seen as the second leg of the corrective pattern from 200.53. Initial bias stays on the upside for 100% projection of 191.34 to 180.07 from 195.02 at 200.75. But upside should be limited there. On the downside, below 198.25 minor support will turn intraday bias neutral first. Further break of 197.07 will argue that the third leg has started, and target 191.34 support and possibly below.

In the bigger picture, a medium term top could be in place at 200.53 after breaching 199.80 long term fibonacci level. As long as 55 W EMA (now at 183.92) holds, price actions from there is seen as correcting the rise from 178.32 only. However, sustained break of 55 W EMA will argue that larger scale correction is underway and target 178.32 support.

In the longer term picture, rise from 122.75 (2016 low) is seen as the third leg of the pattern from 116.83 (2011 low). Focus is now on 61.8% retracement of 251.09 (2007 high) to 116.83 at 199.80. Decisive break there would pave the way back to 251.09 in the long term.

EUR/USD's retreat from 1.0894 continued last week and recovered after dipping to 1.0804. Initial bias stays neutral this week first, and further rise is mildly in favor. Break of 1.0894 will resume the rally from 1.0601 to 1.0980 resistance next. However, break of 1.0804 will turn bias back to the downside for 1.0752 resistance turned support.

In the bigger picture, price actions from 1.1274 are viewed as a corrective pattern. Fall from 1.1138 is seen as the third leg and could have completed. Firm break of 1.1138 will argue that larger up trend from 0.9534 (2022 low) is ready to resume through 1.1274 high. On the downside, break of 1.0601 will extend the corrective pattern instead.

In the long term picture, a long term bottom is in place at 0.9534 on bullish convergence condition in M MACD. It's still early to call for bullish trend reversal with the pair staying inside falling channel in the monthly chart. Nevertheless, sustained trading above 55 M EMA (now at 1.1030) and break of 1.1274 resistance will raise the chance of reversal and target 1.2348 resistance for confirmation.

USD/JPY's rebound from 151.86 resumed last week by breaking through 156.78 resistance. Initial bias remains mildly on the upside this week for 100% projection of 151.86 to 156.78 from 153.59 at 158.51. On the downside, below 155.83 minor support will turn intraday bias neutral first. Further break of 153.69 will target 151.86 and below as the third leg of the corrective pattern from 160.20.

In the bigger picture, a medium term top might be formed at 160.20. But as long as 150.87 resistance turned support holds, fall from there is seen as correcting rise from 150.25 only. However, decisive break of 150.87 will argue that larger correction is possibly underway, and target 146.47 support next.

In the long term picture, as long as 140.25 support holds, up trend from 75.56 (2011 low) is still in progress. Next target is 138.2% projection of 75.56 (2011 low) to 125.85 (2015 high) from 102.58 at 172.08.

GBP/USD turned sideway after rising to 1.2760 last week. Intraday bias remains neutral this week for some consolidations, but further rally is in favor. Above 1.2760 will resume the rally from 1.2298 to 1.2892 resistance next. On the downside, below 1.2670 will turn bias to the downside for deeper pull back.

In the bigger picture, price actions from 1.3141 medium term top are seen as a corrective pattern. Fall from 1.2892 is seen as the third leg which might have completed already. Break of 1.2892 resistance will argue that larger up trend from 1.0351(2022 low) is ready to resume through 1.3141. Meanwhile, break of 1.2445 support will extend the corrective pattern with another decline instead.

In the long term picture, a long term bottom should be in place at 1.0351 on bullish convergence condition in M MACD. But momentum of the rebound from 1.3051 argues GBP/USD is merely in consolidation, rather than trend reversal. Range trading is likely between 1.0351/4248 for some more time.

USD/CHF's rebound from 0.8987 extended to 0.9157 last week before turning sideway. Current development suggests that pull back from 0.9223 has completed already. Initial bias remains neutral this week first and further rise is in favor. Above 0.9157 will bring retest of 0.9223. However, break of 0.9077 support will bring retest of 0.8987. Break there will resume the fall from 0.9223 to 38.2% retracement of 0.8332 to 0.9223 at 0.8883.

In the bigger picture, price actions from 0.8332 medium term bottom are tentatively seen as developing into a corrective pattern to the down trend from 1.0146 (2022 high). Rejection by 0.9243 resistance, followed by sustained break of 38.2% retracement of 0.8332 to 0.9223 at 0.8883 will strengthen this case, and maintain medium term bearishness. However, decisive break of 0.9243 will argue that the trend has already reversed and turn medium term outlook bullish for 1.0146.

In the long term picture, price action from 0.7065 (2011 high) are seen as a corrective pattern to the multi-decade down trend from 1.8305 (2000 high). Strong rebound from 61.8% retracement of 0.7065 to 1.0342 (2016 high) will start the third leg as a medium term rally. But there will be no sign of long term reversal until firm break of 38.2% retracement of 1.8305 to 0.7065 at 1.1359.

AUD/USD's pull back from 0.6713 extended lower last week but stayed above 0.6578 cluster support (38.2% retracement of 0.6361 to 0.6713 at 0.6579. Initial bias remains neutral this week first, and further rally is in favor. On the upside, firm break of 0.6713 will resume whole rise from 0.6361 to 0.6870 resistance next. However, firm break of 0.6578 will dampen this bullish view, and bring deeper fall to 61.8% retracement at 0.6495.

In the bigger picture, price actions from 0.6169 (2022 low) are seen as a medium term corrective pattern to the down trend from 0.8006 (2021 high). Fall from 0.7156 (2023 high) is seen as the second leg, which could have completed at 0.6269 already. Rise from there is seen as the third leg which is now trying to resume through 0.6870 resistance.

In the long term picture, the down trend from 1.1079 (2011 high) should have completed at 0.5506 (2020 low) already. It's unsure yet whether price actions from 0.5506 are developing into a corrective pattern, or trend reversal. But in either case, fall from 0.8006 is seen the second leg of the pattern. Hence, in case of deeper decline, strong support should emerge above 0.5506 to bring reversal.