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EURGBP is consolidating after a strong upside rally in the preceding sessions, while it is still holding well above the long-term falling trend line. The RSI is losing its positive momentum after the pullback from the overbought region. Also, the stochastic oscillator is ready to create a bearish cross within the %K and %D lines above the 80 level.

A reversal to the downside could find immediate support at the 0.8510 level, while below that, the descending trend line around 0.8480 could act significant barrier for traders. If the latter fails to halt bearish movements, the next target could be the 200-day SMA at 0.8438.

On the upside, the price could attempt to overcome the latest high of 0.8590 ahead of the 0.8600 psychological number. Should traders continue to buy the pair above that peak, bringing the uptrend into play, resistance could then run towards the 0.8660 barrier.

The short-term outlook has been bullish over the past month and only a decisive close below the downtrend line could resume the bearish picture.

USDJPY continues to defy gravity with its recent two-and-a-half-month rally from 114.40, showing limited signs of slowing down. Reinforcing this viewpoint are the soaring simple moving averages (SMAs).

The Ichimoku lines are indicating that positive forces remain active, while the short-term oscillators are reflecting the latest impulses of downward pressures. The MACD is revealing some easing in positive momentum from the beginning of May, while the RSI is gliding lower in the bullish region. Moreover, the stochastic oscillator has regained its negative charge and is promoting the minor pullback in the price.

In the event sellers drive the price clearly below the red Tenkan-sen line at 129.88, support could commence from the 129.00 handle and the adjacent 128.61 low. Diving deeper past these nearby obstacles, the bears may confront a support region linking the 127.34 level, which is the 23.6% Fibonacci retracement of the up leg from 114.40 until 131.34, with the 126.38 border that stretches back to early March 2002. If selling interest remains heightened, the pair could then weigh on the support section between the June 2015 peak of 125.85 and the 38.2% Fibo of 124.88.

Alternatively, if buyers create traction off the red Tenkan-sen line at 129.88, initial resistance may transpire from the fresh 20-year high of 131.34. Successfully reviving the positive trajectory, the bulls may jump for the mid-April 2002 high of 132.41 before confronting the 133.50-133.85 resistance band, shaped by the highs over the latter part of March until early April 2002 period. Should the climb in the price endure, the 135.00-135.19 zone could provide the next limitations to the upside, which refers to a one-month period of highs spanning from late January until late February 2002.

Summarizing, USDJPY’s bullish structure remains intact above the congested support boundaries, forming a support buffer zone stretching from 124.88 until 127.34. That said, a price dip beneath the 129.00 handle and the 128.61 low may add credence to an evolution of a deeper pullback.

Spot gold is trading near new three-month low ($1832) posted in early Wednesday’s trading, with larger bears pausing here as traders await fresh signals from US inflation data, due later today.

The metal was under increased pressure from robust dollar which hit new 20-year high, driven by expectations of extended aggressive stance of the US central bank in attempts to cool down soaring inflation.

Analysts expect US monthly consumer prices growth to cool to 0.2% in April from 1.2% in March while annualized figure is forecasted to drop to 8.1% after hitting a 40-year peak at 8.5% previous month.

Traders focus more on the CPI’s impact on the Fed rather than gold’s role against inflation, with metal’s price likely to rise if inflation falls below expectations,
Conversely, stronger than expected figure in April would increase pressure on the yellow metal and push the price lower.

Bears cracked the upper boundary of critical support zone between $1835 and $1827, consisting of 200DMA and Fibo 61.8% of $1676/$2070, where the price action is currently facing headwinds.

Bullish scenario on rebound from here would require rise through pivotal barriers at $1895/$1900 to signal reversal and sideline bears, while break of these supports would risk fresh bearish acceleration and expose supports at $1800/$1780 (psychological / Jan 28 trough).

Res: 1860; 1870; 1895; 1900.
Sup: 1835; 1827; 1818; 1800.

Given the palpable woes surrounding inflation, markets will be keeping a wary eye on today’s US CPI release. The median forecast expects an 8.1% headline inflation print for April, which is a moderation from the 8.5% year-on-year jump registered in March.

A lower-than-expected CPI print would allow risk assets to breathe a momentary sigh of relief. Still, it wouldn’t imply that the Fed has achieved its inflation goals; far from it. After all, a single print does not a trend make. Headline inflation above 8%, or even 6.6% according to the Fed’s preferred PCE gauge, remains far elevated compared to the central bank’s target of a 2% average.

On the other hand, a higher-than-expected CPI print today is set to ramp up the Fed’s hawkish convictions, potentially helping the dollar index reclaim the 104 handle, while heaping more downward pressure on stocks. If US inflation is shown to be climbing persistently, that could see spot gold break below its 200-day simple moving average and immediate Fibonacci support level around the mid-$1830 region.

In order for risk assets to meaningfully pare losses, markets need to be assured that US inflation has indeed peaked and will continue decelerating, in turn allowing the Fed to ease off from its ultra-hawkish stance. Until then, markets remain at the mercy of policymakers’ battle against the hottest inflation in 40 years, with risk assets living on a prayer as long as the Fed has yet to reach peak hawkishness.

Daily Pivots: (S1) 159.98; (P) 160.75; (R1) 161.45; More...

Outlook in GBP/JPY is unchanged as corrective pattern from 168.40 is extending. Break of 159.59 will extend the correction from 168.40 lower. But downside should be contained by 61.8% retracement of 150.95 to 168.40 at 157.61 to bring rebound. On the upside, firm break of 168.40 will resume larger up trend.

In the bigger picture, up trend from 123.94 (2020 low) is still in progress. Sustained break of 61.8% retracement of 195.86 (2015 high) to 122.75 (2016 low) at 167.93 will be a long term bullish signal, and could pave the way back to 195.86 high. This will now remain the favored case as long as 150.95 support holds, even in case of deep pull back.

Daily Pivots: (S1) 136.89; (P) 137.49; (R1) 137.93; More....

Intraday bias in EUR/JPY remains neutral as consolidation from 139.99 is extending. In case of another decline, downside should be contained by 38.2% retracement of 124.37 to 139.99 at 134.02 to bring rebound. On the upside, firm break of 139.99 will resume larger up trend for 144.06 medium term projection level.

In the bigger picture, up trend from 114.42 (2020 low) is in progress. Such rise is seen as the third leg of the pattern from 109.30 (2016 low). Next target will be 100% projection of 114.42 to 134.11 from 124.37 at 144.06. In any case, outlook will now remain bullish as long as 124.37 support holds, in case of deep pull back.

Daily Pivots: (S1) 0.8529; (P) 0.8554; (R1) 0.8573; More...

Intraday bias in EUR/GBP remains neutral for consolidation below 0.8590 temporary top. Outlook will stay bullish as long as 0.8465 resistance turned support holds. On the upside, break of 0.8590 will resume the rise from 0.8210 medium term bottom to 0.8697 medium term fibonacci level next.

In the bigger picture, a medium term bottom could be in place at 0.8201, on bullish convergence condition in daily and weekly MACD. Rise from there could either be a correction to the down trend from 0.9499 (2020 high), or a medium term up trend itself. In either case, further rise should be seen to 38.2% retracement of 0.9499 to 0.8201 at 0.8697. Sustained break there will target 61.8% retracement at 0.9003.

Daily Pivots: (S1) 1.5098; (P) 1.5189; (R1) 1.5264; More...

Intraday bias in EUR/AUD remains mildly on the upside for 1.5354 cluster resistance (100% projection of 1.4318 to 1.5053 from 1.4597 at 1.5332. Rejection by this level will maintain medium term bearishness for another fall through 1.4138 low at a later stage. But firm break of 1.5332/54 will argue that the larger trend is reversing. Next target is 161.8% projection at 1.5786 first.

In the bigger picture, as long as 1.5354 support turned resistance holds, larger down trend form 1.9799 (2020 high) is still expected to continue. On resumption, next target is 61.8% projection of 1.9799 to 1.5250 from 1.6434 at 1.3623, which is close to 1.3624 long term support (2017 low). However, firm break of 1.5354 will indicate medium term bottoming and bring stronger rally back to 1.6434 key resistance.

Daily Pivots: (S1) 1.0457; (P) 1.0487; (R1) 1.0516; More....

Intraday bias in EUR/CHF stays mildly on the upside at this point. Sustained break of 100% projection of 0.9970 to 1.0086 from 1.0400 at 1.0516 and 1.0505 will carry larger bullish implications. Next near term target will be 161.8% projection at 1.0782. On the downside, below 1.0400 minor support will turn intraday bias neutral first.

In the bigger picture, as long as 1.0505 support turned resistance (2020 low) holds, long term down trend from 1.2004 (2018 high) is expected to continue. Next target is 100% projection of 1.2004 to 1.0505 to 1.1149 at 0.9650. However, firm break of 1.0505 will suggest medium term bottoming, and bring stronger rebound towards 1.1149 structural resistance.

Daily Pivots: (S1) 1.0509; (P) 1.0547 (R1) 1.0569; More...

Intraday bias in EUR/USD remains neutral as consolidation from 1.0470 continues. Further decline is in favor as long as 1.0641 minor resistance holds. Break of 1.0470 will resume larger down trend to 161.8% projection of 1.1494 to 1.0805 from 1.1184 at 1.0069. On the upside, break of 1.0641 will turn bias to bring stronger rebound instead.

In the bigger picture, the decline from 1.2348 (2021 high) is expected to continue as long as 1.1185 support turned resistance holds. The break of 1.0635 (2020 low) now raises the chance that it's resuming long term down trend from 1.6039 (2008 high). Retest of 1.0339 (2017 low) low should be seen next. Decisive break there will confirm this bearish case.