GBP/USD
Against a bearish background for this week, yesterday saw CABLE attempt to correct last week's upside rejection. Gains were posted but the highs not maintained and although Asian trading has also attracted buyers, Friday’s Marabuzo line has yet to be effectively breached. It is that lack of follow through and the 13 day avg holding on a closing basis that keeps the focus on the downside.
So our call is Cautiously Bearish but to leave room to Sell a Rally to 1.6903, yesterday's top. The risk is 1.6932, last Friday’s open, with an immediate target of 1.6857 then Friday’s 1.6832 base and 1.6793.
The risk is that selling pressure is weaker than currently assessed – signalled above 1.6932 focusing on 1.6953.
USD/CAD
Against a background of bearish signals for sentiment for this week, the market failed to build upon Friday’s gains. But although USD/CAD saw minor losses that reflect the underlying negative tone over the last 2 weeks significantly, the lows were not maintained. It is this downside rejection that, despite the proximity of the 13 day moving average, means intraday sentiment is assessed as mildly positive.
So our call is Cautiously Bullish above 1.0861. The immediate objective is 1.0922 with a move beyond that point targeting 1.0939 then 1.0955, May 6th open.
The risk to this call is a move under 1.0861 indicating that the downside is likely to extend targeting 1.0831 and 1.0814, last week's bottom.
FTSE
This week’s signals are pointing to a temporary FTSE 100 pullback, but contrary to these investors bought futures on Monday, sentiment improving to post a 3rd higher daily low in a row and a gain of just over 40 Pts since last week’s close. While prices are trading clearly above their 50,100 & 200 day average rates, it has taken futures towards this and last year’s 14 year high trades at 6858.0/61.5.
However, although intraday sentiment is overstretched, with no sign yet that demand is ending, the outlook for Tuesday is to buy on the open and at 6810.0, with a stop loss at 6787.0, yesterday’s low.
Targets are to 6856.5/61.5, last year’s 14 year peak, 6880.0 and then towards 6900.0.