GBP/USD
Yesterday saw a reaction to last week's GBP/USD decline. A sequence of four down days ended as some buying interest was renewed.
Although Friday’s losses were reversed, the upside was not extensive and was unable to clearly breach the important 13 day average. This means that immediate signals for sentiment cannot be strong. Nonetheless, Asia has continued demand, modestly, and there is scope for the upside to extend.
So, our call is to buy modestly at the open but also on a dip to 1.6595. The risk is 1.6566, yesterday's low, with the upside focusing on 1.6637, 1.6661, last Thursday’s top, and 1.6684, last month’s peak. The risk is below yesterday's 1.6566 low targeting 1.6525.
EUR/USD
A sequence of three down days for EUR/USD ended yesterday as profit taking developed above the 100 day average and the daily Ichimoku Cloud. Although this upside was strong – it was not extensive enough to regain Thursday’s losses or test the 13 day moving average.
Nonetheless, the move leaves intra-day signals for sentiment more positive and so while it is assessed as temporary, our call is Bullish from the open but also to buy a dip to 1.3721.
The risk is 1.3694 and the immediate target is 1.3767, the 13 day average. A move above that level targets 1.3785 and 1.3805. The risk is a move below 1.3694, yesterday's low, targeting a move towards 1.3664, a 62% correction to this year’s rise.
GBP/CHF
A sequence of higher weekly lows & highs have been formed by GBP/CHF from close to 1.4455, a 62% pull-back to the entire Aug-Jan GBP/CHF gains, which has kept this week’s signals pointing higher.
However, with daily sentiment overstretched, an early pull-back has been expected and this occurred on Monday, sentiment deteriorating by just over ½ Big Fig. The pull-back has stalled with prices at their 100 day average rate, but in the absence of a buy signal, the outlook for Tuesday remains negative and the call is to sell on the open and at 1.4775, with a stop loss at 1.4799, yesterday’s high.
Targets are to 1.4733/38, yesterday’s low, 1.4684, Thursday’s base and then towards 1.4659, this month’s low trade.
FTSE
A daily Shooting Star on Friday, which has been formed from close to a previous Shooting Star at the 3 week top has changed this week’s FTSE 100 signals to bearish. These are being confirmed with Monday’s 68 ½ Pt sell-off, a pull-back which has left intra-day signals for sentiment oversold from close to last week’s 6523.0 base.
Bounces have to be expected, but with daily signals continuing to point lower, the outlook for Tuesday is to sell on the open and at 6565.0, with a stop loss at 6593.0, a 50% recovery to the losses posted since Friday’s high.
Targets are to 6530.5/35.5 yesterday’s low trade, 6498.5/02.0, the 26th & 27th lows and then towards 6445.5, last month’s base.