With the recent rally witnessed in major currencies as the global economy picks up, majors may be losing the bullish momentum they have acquired as they could engage in a slight downside correction before resuming the general uptrend.

During the Asian session, the Euro failed to breach the 1.50 mark as it recorded a high of 1.4994 before reversing back to the downside to currently trade at 1.4970 forming a bearish candlestick formation on the four hour charts suggesting the pair is to decline. Momentum indicators are currently supporting our outlook on the intraday basis as the stochastic indicator has entered an overbought area showing possible signs of a negative crossover whereas the RSI is trading around the value of 64. Any declines today are to be considered a correction as the pair may head towards 1.4920 and 1.4875 before rebounding back to the upside to resume the uptrend targeting levels near 1.5330.

The Cable is currently facing the 38.2% correction (at 1.6395) for the entire decline from 2.1143 to 1.3515 where it seems to be currently forming a negative divergence on the four hour charts as momentum indicators attempt to exit an overbought area. The stochastic indicator is showing signs of a bearish crossover which may take the pair first 1.6340 and perhaps extend towards 1.6260 before rebounding back to the upside.

With regards to the USD/JPY pair, the yen continues to batter the dollar for the third consecutive day as it took the pair towards the 23.6% correction at 90.25 where it also represents the neckline for a head and shoulders bottom. The pair may extend the decline towards 89.80 yet we still believe the pair has technical targets to reach near 92.50 as the general trend remains to the upside as far as 87.10 is intact.