GBP/USD
After 3 days of indecisive trading that showed a lack of clear direction, yesterday saw buying interest return to CABLE. This improvement took the market back to the top of the Keltner channel and to a test of last week's high point.
Intraday sentiment is now at overbought extremes and this is a concern, with Asian trading lacking signals. However, the underlying tone remains assessed as positive.
So, our call is Bullish but also to Buy a Dip to 1.6803. The risk is 1.6774 and the immediate target is last week's 1.6842 top. A move above that level then targets 1.6878 or even towards 1.6907.
The risk is below 1.6774 to test the 13 day moving average at 1.6750.
EUR/USD
Although the market failed to extend Monday’s decline through the 13 day moving average, the rally attempt was a limited one. Instead EUR/USD is consolidating around that avg and near the top of the daily Ichimoku Cloud.
With limited ranges, signals for sentiment cannot be strong. Nonetheless, buying in Asia has reinforced yesterday's rise and studies are assessed as mildly positive.
So, our call is Cautiously Bullish above 1.3783. The immediate objective is 1.3838 with a move beyond that point targeting 1.3865, last week's top, or even towards 1.3906, this month’s peak.
The risk is under yesterday's 1.3783 low targeting 1.3760 and 1.3737.
GBP/CHF
Bullish signals for GBP/CHF on the week and for yesterday have been confirmed. Investors buying the cross on Tuesday to post a 7th higher daily low & high in a row and a gain of just under ½ Big Fig on the day. There is no sign yet that demand is ending, but the market hasn’t recorded more than 7 higher lows in succession for 5 ½ years, since Nov 2008.
With this in mind, the outlook for Wednesday is to stay square on the open, but to sell at 1.4940 with a stop loss at 1.4978, February’s high, or to sell down through 1.4855, yesterday’s low with a stop loss at 1.4890.
Targets below 1.4855 are to 1.4823, this week’s base and then towards 1.4759, Thursday’s low trade.
FTSE
Bullish signals for FTSE 100 on the week are being confirmed. Investors bought futures on Tuesday for a 4th higher daily low & high in a row and a gain of 57 Pts on the day.
Improving sentiment since last week’s 6452.0 low has come from close to last month’s base and it has taken prices above their 50, 100 & 200 day average rates, which is positive.
However, although sellers returned to the market into the close for signals to weaken, pullbacks should be temporary.
The outlook for Wednesday is to stay square on the open, but to buy on the dip at 6609.0, this week’s opening trade with a stop loss at 6588.0, the 200 day average rate, or to buy up through 6662.0, with a stop loss at 6634.0. Targets above 6662.0 are to 6685.0 and 6700.0, the 5 week top.