GBP/USD
Tuesday’s gradual gains accelerated yesterday. The most positive levels since 2009 were posted and CABLE moved to the top of a bullishly trending Keltner channel.
Intraday sentiment is overbought, but without any signs of demand being exhausted. Studies remain positive and so our call is Bullish but to leave room to Buy a Dip to 1.6862.
The risk is 1.6829, yesterday's open, and the immediate target is 1.6901, yesterday's peak. A move above that level then targets 1.6933 or even 1.6955. The risk to this call is below 1.6829 targeting 1.6807, yesterday's low point.
GBP/JPY
Although bullish signals for GBP/JPY on the week have been confirmed, the end to a small sequence of higher daily lows turned Wednesday’s signal to bearish, the outlook also recommending selling the rally at 172.60.
Although this was the correct strategy, sentiment in Europe traded broadly sideways, though almost all the initial losses of ¾ Big Fig were recovered. This is positive and with signals continuing to point higher, but with investors likely to be cautious at 5 year highs, the outlook for Thursday is to buy on the open and at 172.30, with a stop loss at 171.94, yesterday’s low.
FTSE
Yesterday’s bullish signals for FTSE 100 were confirmed, sentiment posting a 3rd higher daily low & high in a row and an overall gain of over 50 Pts on the day. Futures are trading above their 50,100 & 200 day average rates which is positive, though a 300 Pt rally in April has left daily sentiment overstretched with prices trading towards multi-year highs.
Pullbacks have to be expected, but these should be temporary and the outlook for Thursday is to buy on the open and at 6730.0, with a stop loss at 6707.0, yesterday’s low. Targets are to 6765.5, yesterday’s high, 6804.5, March’s top and then towards 6858.0, February’s 2014 high trade.
Targets are to 172.93/16, last month’s highs, 173.59, March’s top and then to 174.86, January’s over 5 year peak.