Markets correct recent gains in a downbeat trading session that was driven mainly by concerns over Spain and downbeat durable goods orders from the U.S.

Durable goods orders expanded at 2.2% rate February jumping from the 3.6% contraction seen in January, however the number came below market consensus of 3.0% expansion. The core component which excludes transportation items came in line with expectations at 1.6% from 3.00% contraction in January.

width=100

The EUR/USD pair dropped from the recent high at 1.3385, trading now near the opening price. The recent breach of the neckline for an inverted head and shoulders pattern around 1.3280-1.3290 pushed the pair higher towards the ascending resistance of the rising wedge pattern. Currently the pair is approaching the breached neckline once more and we expect the support level to hold in the near term, as a breach below could put the pair under intraday downside pressure to the ascending support of the aforementioned rising wedge. Although the near term outlook has turned bullish after breaching the neckline; the wedge pattern could threaten the current rally, thus a breakout of the wedge to the downside shall signal the invalidation of the head and shoulders and reverse the near term bias into bearish.

width=100

GBP/USD fell sharply today, after completing a break below the neckline of a head and shoulders top pattern at 1.5940 as shown on chart. The selloff grabbed the pair lower after testing the major psychological level we mentioned yesterday at 1.6000. Now, a free fall towards the ascending trend-line that carried the recent short term bullish trend is seen. The trend line resides near 1.5850 area, where further downside action that dips below this trend line shall clear the way towards 1.5820 horizontal support. In general, the overall outlook for the pair remains neutral, as we are trading among a clear range ceiled from the upside by 1.6000 and supported by 1.5650 from the downside.

width=100

USD/JPYfailed to settle above the key resistance we mentioned yesterday among 83.00-83.20, where it retreated slightly from the level, however the downside move was mild, where the pair were supported by 82.60 level to resume the bullish bias. Now we anticipate a break above the aforementioned resistance at 83.20 to look for a retest of the highs around 84.00. On the other hand, a dip below the ascending support for the minor channel above shall resume the downside pressure once more.

width=100

Gold was rejected at the descending resistance, and from levels around the major 200-days simple moving average; currently attempting to retest the neckline for the double bottom at 1670.00. Stochastic has dipped within oversold area, thus the neckline may act supportive aided by the oversold stance on the pair. However, caution is required as a dip with few hours of trading below the neckline shall indicate further selloff towards 1655.00 and 1635.00.