The common currency is in defense mode, surprisingly holding well so far. After the Euro zone manufacturing and services sectors data showed unexpected contractions this month. The data are mainly watched as an indicator for the coming GDP figures, where another contraction in GDP would be the second in a row, thus the euro zone will be technically in recession.
The pair is struggling to hold gains currently even, trading around the daily open at 1.3233. trading within a short term consolidation period, while the trading range and volatility is getting thinner, hinting a price explosion could be seen soon. Accordingly, the current 100-pips trading range should be watched carefully, among the critical 1.3280 resistance and 1.3180 support. Above 1.3280 we may see an extension to 1.3320 high, followed by a continuation of the current rally towards 1.3500 areas. While below 1.3180 price could test 1.3's again.
The GBP/USD took a slap today, the Monetary policy committee decided to hold rates steady at 0.5%, however split was seen over the asset purchase facility increase, as two members saw an increase of 65 Billions pound is necessary at the time being. If we assess this information from different perspective, we could conclude the following: Either an APF increase is not very unlikely , or some members view the current stimulus is not enough to stimulate the ailing economy and the economic situation remains very weak, thus in both cases the weaker GBP today is justified.
The pair started the day at 1.5776 printed a high at 1.5813 before falling sharply to print a low at 1.5660 and currently pushing to the downside toward the main swing low and major support at 1.5645 and the 50-days Simple Moving Average at 1.5615. A push below 1.5615 could signal further weakness within the upcoming session.
The USD/JPY is refusing any downside calls, neglecting major resistance levels, currently testing one of those post-interventions swing highs at 80.25. The pair is extremely overbought at the currently level as seen on momentum indicators, I am calling for a pullback from areas around here, however stability above 80.25 could lead to further gains towards the next resistance at 81.60. The pair is up more than 50 pips , opened the day at 79.73.
Gold completed a breach above the resistance of the bullish flag pattern we mentioned previously at 1737.00, to test the major swing high near 1600.00 area. This high managed to halt further incline and the commodity is currently correcting some of the seen gains trading around 1750.00 following today's open at 1759.0. Look for a resumption of the rally from key support levels starting at 1745.00 and 1735.00. Beating 1762.00 will extend the rally initially to 1800.00.