It seems like we are heading towards another postive weekened,with the lack of major news on the economic and political fronts, markets continue yesterday's upbeat tone. Trading has been mainly influenced by technical demand and supply levels.
The EUR/USD successfully broke above the latest swing high at 1.3320, where it printed a daily closing above the level yesterday, confirming the continuation scenario we were looking for, towards 1.3500 areas. Price is currently testing this ascending resistance of short term bearish rising wedge formation around 1.3425. as we are approaching the weekend we may see some profit taking within the upcoming hours, any downside pullback should be faced with support at 1.3380, followed by 1.3350 today.
The U.K. quarterly GDP was unrevised and incline with expectations, thus had no major effect on the risk-driven risky mode of markets today, even the huge drop in business investments from 1.0% to -5.6% couldn't overshadows the overall appetite for markets.
GBP/USD rallied sharply today as well, after bottoming yesterday at the major directional support we mentioned at 1.5645 and the 50-days Simple Moving Average. The rally is approaching the recent highs around 1.5925 areas, as price is currently trading at 1.5830 after opening today's session at 1.5743, momentum indicators over intraday and short term basis have reversed directions heading upwards.
USD/JPY completed a wishy-washy correction yesterday after hesitating around 80.25 post-intervention high, to end the trading session lower at 79.85 after opening at 80.28. However the pair reversed course today to continue the northern rally, confirming a breach of this level. The next obvious serious resistance level looks pretty far from here around 81.65, however 81.00 should be taken seriously as well. The pair is up more than 60 pips so far, trading around 80.61 after opening the session at 79.98.
The ongoing pull and push between West nations and Iran has been a major catalyst for oil prices lately. Tensions over supply interruption pushed the black gold to hit 108.70 yesterday. We discussed earlier that the latest breach above 103.40-104.40 was a major signal that suggested further gains ahead. In general, oil is trading within a very narrow range today among 108.76-108.02.
From a technical perspective, price is extensively overbought as seen on momentum indicators, thus we may see a correction however the corrections are expected to be narrow and short-lived under the current fundamental conditions, where the main seen upside target is the 2011 high near 115.00.
Support and resistance level to watch are, 106.65, 105.30, 104.45 and to the upside 109.00 110.65, 112.00 and 113.50.