It's undeniably getting more upbeat in markets nowadays, as the sentiment continues to improve and not only risk appetites; confidence readings are improving across the board and that is evidently driving equities and majors to receive more gains.
In European mid-trading today; sentiments continued to holdup, as equities trailed Asia into green territories, yet slight downside moves were seen, as the deeper than projected contraction in the United Kingdom, helped majors slide which is merely a momentum gathering correctional move.
Starting off with the royal currency,Sterling is still enjoying the general bullish trend, yet momentum indicators over a short-term basis are trading near overbought areas and the bullish direction is weakening, but remains positive. The deeper than anticipated contraction in the first quarter by 2.4% in the United Kingdom; set some fears in the market that recovery might be very muted and mild, despite the emerging signs that the slump is easing from confidence surveys from the housing and services sectors.
The downbeat readings added negative pressures upon Sterling, as it slid off its intraday highs versus the dollar; set early in the session at 1.6745 to trade now in strong support areas, nearly around 1.6600-20; where closing below those levels over 4-h basis, will open the path for further downside moves towards 1.6580-70 levels, as over intraday basis momentum indicators are starting to point south for the pair to gather momentum; since it still needs to unload some negative pressure to be able to continue the upside move.
As for the single European currency, the euro has headed to the downside after failing to trade solidly above the strong resistance areas, around 1.4140-50 areas where the currency set its intraday highs versus the dollar. Over the short-term, indicators are rather neutral which is not providing the pair with enough bullish momentum to consolidate strongly above the mentioned levels. The euro might move lower but still hold strong support, which is seen at 1.4080-70 and breaching those levels over intraday basis, might take the pair further to the downside to gather momentum towards 1.4050 levels.
Meanwhile, assessing the Japanese yen, where also managed to strengthen against the dollar as expectations where the outlook for the Japanese economy will prove to be getting better; according to the later due Tankan Survey, while adding to that the pair hit strong resistance levels around 96.30 levels, and with the lack of enough bullish momentum the pair head lower, as momentum indicators are neutral which is not supporting the strong breakout supporting the notion for a new downside wave to gather momentum and until a break out is seen for either, the mentioned 96.30 levels or 95.00 support levels, the sideways correctional move is likely valid.
Majors are on the correction and the dollar is still weak, where the dollar index that gauges its moves, versus six major currencies which the mentioned three and some of the majors, the dollar, has eased its morning losses and is expected to continue to move stronger; especially as the sentiment index today is expected with further improvement, powering the correction. Yet, generally the sentiment towards the dollar is bearish as investors unwind the strong wave of dollar, buying as if it was the best haven and now, as the outlook improves, the dollar's appeal is eroding across the board.