GBP/USD
Demand for GBP/USD saw our forecast for this week turn positive with prices reaching the most bullish levels since 2009. However, those highs, like Asian lows, were not held.
For a 2nd day in succession, there was limited net movement. Prices remain above the key 13 day average but in the immediate term it is the upside failure that is deemed relevant.
Therefore, this morning’s call is Temporarily and Cautiously Bearish below 1.6858. Targets are to 1.6793, 1.6776 or even 1.6763, last week's low. The risk is that demand is stronger than assessed- signalled above 1.6858, yesterday's top, to 1.6879 then 1.6901.
EUR/GBP
Price action for EUR/GBP remains lacking in clear signals for sentiment. Yesterday was the 3rd day in a row with little net movement and with the market caught within a Marabuzo line on the downside and the 13 day moving average on the upside.
This reflects investor indecision but while signals have to be assessed with a great deal of caution, yesterday's downside rejection and minor gains in Asia keep the focus on the topside.
So, our call is Very Cautiously Bullish above 0.8217 targeting 0.8258, 0.8268 and 0.8283, the base of the daily Ichimoku Cloud. The risk is that demand is overrated – signalled below yesterday's 0.8217 low and focusing on 0.8204 and 0.8191.
FTSE
This week’s signals for FTSE 100 are bearish, but investors remain cautious with Futures trading near their 50,100 & 200 day average rates. Monday’s trading closed little changed on the day, the 4th little changed daily close in a row.
However, a late rally into last night’s close leaves a cautiously bullish bias to signals going into Tuesday. The call is to buy on the open and on a dip to 6641.5, yesterday’s open, with a stop loss at 6613.0, Friday’s low.
Targets are to 6678.0/82.0, this and last week’s high trades, 6695.0/6700.0, the 6 week top and then towards 6750.0.