Despite a fundamental free calendar the majors were able to appreciate in the markets once again versus the dollar and yen even after news from the US Treasury Secretary Timothy Geithner saying that the US financial rescue plan will be delayed. The US session now lacks any news and trading will most likely remain technical.
The euro is currently facing a strong resistance at 1.3070 which is the 76.4% correction for the short term ascending channel that started from 1.2558 where if breached will open the way for the pair to target the next short term upside target at 1.3170. We still see positive signs on technical indicators on the four hour and daily charts alongside the 14 MA that has limited the pair from extending its losses.
After breaching the key resistance for the descending channel, the Royal pound was able to continue its upside journey despite the bearish candlestick pattern that was stopped by the support level found at the 1.4690 – 1.4700 areas. The current bullish pattern is opening the way for the pair to target the next target at the 1.50 psychological and perhaps the extension at 1.5150. Trading remains of low volume and the RSI is currently on the verge of entering an overbought area on the four hour charts suggesting a slight possibility for a downside correction to 1.4860s before continuing to the upside.
Finally, the USD/JPY pair recovered some of the losses seen earlier in the session after the 14 MA on the four hour charts was able to send the pair to 91.73 where it is currently finding struggles in breaching this level. On the daily charts, we see the pair still declining yet the Span A line for the Ichimuko cloud is still holding the pair from declining further despite the intraday low seen at 90.88. The trend will depend on the daily close of the candle and so we need to watch this closely to find out whether the pair will continue to slide or not as a bearish candlestick pattern.