GBP/USD
Continuing the decline from this month’s top, GBP/USD was sold at lower levels for a 7th day in succession yesterday. This move took prices near to the bottom of a declining Keltner channel but the market was unable to hold those levels.
Instead all initial downside was regained and the currency pair tested Wed’s Marabuzo line. The failure to break that point is a concern but the bounce from the lows does leave intraday signals for sentiment positive.
Allowing for volatility, our call is Bullish but to leave room to Buy a Dip to 1.6767, yesterday's open. The risk is 1.6743 with a move above 1.6806, yesterday's top, acting as confirmation and targeting 1.6826, Wed’s open and towards 1.36875, that day’s peak.
The risk to this call is a move below 1.6743 targeting 1.6728, the open from 4 weeks ago.
EUR/USD
Initial trading yesterday further confirmed this week’s negative outlook with a move that took EUR/USD to the lowest levels traded for 11 weeks. However, levels outside the declining Keltner channel, and at oversold extremes, attracted profit taking/fresh buying interest and the subsequent bounce regained all of the initial losses.
This leaves signals for sentiment positive going into today although the proximity of the 100 day avg and the bottom of the Cloud does concern. Nonetheless our call is Bullish but to leave room to Buy a Dip to 1.3696.
The risk is 1.3672 and the immediate target is 1.3738 followed by 1.3772, Tuesday’s peak, and 1.3800, last Fri’s Marabuzo line. The risk to this call is below 1.3672 to yesterday's 1.3648 bottom.
FTSE
Thursday’s bearish signals for FTSE 100 were confirmed, as investors sold into early strength, for sentiment to deteriorate by 77 Pts from the day’s new 14 year high at 6880.0. Although this is negative, pullbacks are signalled as being temporary and a sequence of higher weekly lows remains intact.
However, with no sign yet that the deterioration is ending, but with intraday sentiment oversold, the outlook for Friday is to sell on the open and at 6860.0, with a stop loss at 6880.0, yesterday’s high trade.
Targets are to 6808.0, 6787.0, this week’s low and then towards 6766.0, the 8th May base.