Cable cracked 1.40, but consolidation is expected before next upleg

Early in the day Cable broke the 1.40 handle and even succeeded to mark daily high at 1.4026. A pullback followed but currently the price is not far from the psychological level at 1.40.

On the four hour time frame the price continues to develop above its bullish SMAs and today’s lowest level found support at the 20-day SMA. Indicators on the same chart are yet located within positive territory, but are losing upward strength. Today’s rally is impressive as GBP/USD reached June 23 in 2016, the time of Brexit decision, but more important for the continuation of the bullish trend is a close above 1.40. I think that the bulls will take a breath before tackling higher challenges, so in the short term the Cable will be seen in consolidation mode. 

USD/JPY Close to critical support after dovish BoJ

The Bank of Japan's monetary policy meeting held earlier today delivered relatively dovish massage, as central bankers left unchanged the interest rates and its QQE purchase. Following the speech of Governor Kuroda the USD/JPY spiked the 111.00 level but found resistance at 111.20. On the four hour time frame the price is developing below its bearish SMAs, while RSI and stochastic turned sharply to south and are showing strong bearish momentum. The pair failed to hold gains are is close to the key support at 110.50. The only interesting about this pair today will be whether will test the next support level at 110.19 (the 4-month low marked last week). 

 

USD/CHF Fresh montly low with RSI divergence

The notable US dollar’s weakness drove the USD/CHF pair under huge selling pressure today and the pair pinned a fresh four month low at 0.9535. Earlier in the day the pair tested the support at 0.9550 that was last visited in September 2017 and bears were seduced by lower levels from late 2016.

What comes to be more interesting is that while the bears entertained around the daily low, the RSI was marking higher lows. The RSI divergence is clearly seen on the four hour time frame at the time the price was marking lower lows. The pair retreated later to higher levels with current market price 0.9622, but we should be cautious with this quick bullish reversal as the 0.9665 resistance (double top earlier this week) comes into play. 

Gold Back above $1335

Gold jumped above $1335 today following the weakened US dollar amid growing woes on possible US government shutdown. During last three sessions the XAU/USD was trading lower but the downside movement was limited by the support line at $1325. Bulls quited this correction area to resume the up-move towards the 4-month high, that was marked at the beginning of the week. But to get back there, first should conquer the resistance at $1344, then the doors are opened for the $1350 area. On the flip side $1333-32 region supports the immediate downside (flat 20da- SMA), which if broken might drag the XAU/USD pair back around $1325. In the short term this scenario is not favored given the indicators on the four hour time frame supporting the uptrend.

AUD/USD Bulls on pause mode under 0.80 barrier

Since the beginning of the week the AUD/USD pair has been trading in narrow range, close to the recently marked high and suggesting continuation of the the bullish trend.Today the Aussie received a goodish boost by better than expected figures from Australian macro data while the greenback is losing strength. 
The AUD/USD topped at 0.7998 during the early trading hours but failed to crack once again the psychological barrier at 0.8000. The pair retreated to reach daily low at 0.7940 but found support at the 20-day SMA and bounced from this level to currently is trading at 0.7968.
On the four hour time frame the price is developing above its bullish moving averages. Stochastic retreated from its overbought readings and is showing bearish momentum, while RSI is located at 60 and is acting quite undecided, which suggests that bulls prefer to consolidate before next attempt to conquer the 0.8000 level.  

USD/CAD Looking for direction ahead of BoC

USD/CAD pair has lost directional strength and is seen in narrow trading range today slighty above the 1.24 mark. It seems that market participants are not likely to take part ahead of Wednesday's BoC monetary policy decision. The 85% probability per Bloomberg for rates hike will boost the CAD’s strength but in case BoC postpone hikes for the next meeting the USD/CAD would be poised to test the resistance provided by the 38.2% Fibo retracement of latest bullish run at 1.2585. Lookind to the downside first support is seen at the psychological barrier at  1.24, below which the pair might extend its downward slope towards the 61.8% Fibo of same retracement at 1.2385.  

 

GBP/USD is gaining momentum

GBP/USD is moving steeply upwards and today marked fresh new high, that has not been seen since June 2016 and even reached the Brexit referendum levels. However the pair retreated from the 1.3822 to currently trade at 1.3795. 

Technically speaking the short term outlook for GBP/USD remains neutral to bullish. On the four hour time frame the price is developing well above its moving averages, all keeping bullish slopes. RSI is located within extreme overbought territory, but has eased around 82 level. The Momentum retreated modestly from its north areas, but when the pair is challenged to test again the daily high, a correction is out of the question at this stage. 

First resistance is provided by 1.3835 (February 2016 low) and in case bulls conquer it, doors are opened for testing the psychological 1.4000 handle.