Euro reversed earlier loss after a string of strong data and more buying is seen in early US session after disappointment from ADP job report. Markets expected 40k expansion in the private job market in March but the data showed -23k contraction instead. Dollar is sharply lower against European majors and was even lower against yen but remains steady against Aussie. There is also additional pressure to the dollar from Crude oil which broke recent high of 83.16 to resume the up trend.

Euro staged a strong rebound against dollar earlier today as data showed CPI rose much more than expected by 1.5% yoy in March, highest level since December 2008 and compares with expectation of 1.1% yoy. Also, Germany unemployment expectedly dropped by -31k in March while unemployment rate dropped to 8.0%. Eurozone unemployment rate rose slightly to 10.0% as expected.

Other data released today saw Canadian GDP rose more than expected by 0.6% mom in January. Swiss KOF leading indicator rose to 1.93 in March. Australia retail sales unexpectedly posted -1.4% mom decline in February. Japan housing starts dropped -9.3% yoy in February. UK Gfk consumer confidence dropped to -15 in March.

Looking the sharp fall in dollar index today suggests that correction 82.24 is still in progress and further decline should be seen towards 79.51 support. As discussed before the five wave sequence from 74.19 should have completed at 82.24 already and some more consolidations would now be seen. But after all, another rise would be expected after completing the correction from 82.24, which resumes the whole rally from 74.19.

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GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.4985; (P) 1.5055; (R1) 1.5138; More

GBP/USD's rise extends further to as high as 1.5184 so far today and intraday bias remains on the upside for 1.5381 resistance. Note that rise from 1.4798 is treated as the third leg of consolidation pattern that started at 1.4783 and hence, upside should be limited by 38.2% retracement of 1.6456 to 1.4783 at 1.5422 to conclude the consolidation and bring down trend resumption. On the downside, below 1.5042 minor support will flip intraday bias back to the downside. Decisive break of 1.4783 low will confirm that whole decline from 1.6456 has resumed and should target 200% projection of 1.6875 to 1.5829 from 1.6456 at 1.4364.

In the bigger picture, there is no change in our bearish view. That is, medium term rebound from 1.3503, which is treated as a correction to down trend from 2.1161, has completed at 1.7043 already. Fall from there is tentatively treated as resumption of the down trend from 2.1161 and should target a new low below 1.3503. On the upside, break of 1.5814 resistance is needed to invalidate this view. Otherwise, outlook will remain bearish.

GBP/USD