With the European session at an end, the US session holds out until the baton is passed into the Asian session later this evening. Today was a very interesting day with a couple of releases that moved the markets. Earlier there were Retail sales for the GBP which printed lower than expected thus causing the GBP to weaken across the board. In the US session the unemployment claims were positive, the USD surged and the effects could be seen in the likes of most USD denominated pairs.
A weak GBP and strong USD was the perfect combination to unlock the bearish move we can see in the GBPUSD. Earlier today it was discussed that resistance was found at 1.5650 with support around the 1.5500 regions. A breakdown does look to be in the wood works if we attain a solid daily close below the 1.5500 level.
Candlestick wise one can also see a bearish engulfment on the daily timeframe. This is a strong signal of an impending down move. When accessing both leading and lagging indicators, everything points down. Prices reside below the 20 SMA and we are currently below the weekly pivot. The MACD has been flat, but this is understandable as for the past 9 trading days, the pair has been in a wide range. Tomorrow may offer a potential intraday bearish opportunity, but the daily close today may paint a clearer picture.
The EURUSD today went in line with our discussions earlier. The daily timeframe remained bearish as long as prices could keep below not only the 1.104 level but also the 20 SMA. The correction period may be nearing an end with the rekindling of the bears taking the front seat once more. Today’s positive unemployment claims may have a lingering effect till the end of this week.
AUDUSD bulls have tried on many occasions to take prices back above 0.7450 but have been thrashed each time. This is a losing battle and as soon as prices attain a daily close below 0.7350, this may simply open gates to the next relevant support at 0.7000.
USDJPY has been passive. The current daily candle looks like a spinning top. Indecisive with prices closing where it opened. Earlier it was discussed that a strong daily close above the 124.50 would be needed for us to see a further incline to 125.50.
Tomorrow may be a price action driven day as the only major release will be the Manufacturing PMI for the EUR.
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