Further selling expected for GBP/USD
GBP/USD has been gradually moving higher overnight, in a countertrend retracement. Given the downtrend in play, further downside is expected and with resistance being found upon the $1.4951 January low, alongside the wedge bottom.
As such, we would need to see a close back into the wedge and above $1.5009 to provide a more bullish outlook. Until then, the bearish view remains in play, with the signal of another leg lower being provided by a closed hourly candle below $1.4885. Support levels of note are $1.4885, $1.4865 and $1.4831.
USD/JPY rally short lived
The USD/JPY recovery seen this week has seemingly hit the buffers after the Bank of Japan left its monetary stimulus target unchanged overnight. This weakening of USD/JPY has brought price back below the key ¥122.30 support level, following a brief move back to the top of the November range.
The move below ¥122.30 is a bearish one, yet until we see a sell through ¥121.38, there is still an uptrend in play. A closed candle below ¥121.38 would point towards a return to the selling pressure of last week.
Conversely, watch out for bullish intraday reversal signals should selling stall ahead of ¥121.38 support. Key support levels of note are ¥121.38, ¥121.07 and ¥120.41. Resistance levels of note are at ¥122.02, ¥122.30, ¥123.00 and ¥123.60.
AUD/USD rally to be short lived
Yesterday saw AUD/USD sell off through key $0.7159 support for the first time in December. The pair is seeing a subsequent bounce overnight, with price pushing back towards that crucial $0.7159 level.
Given yesterday’s bearish selloff and the importance of this $0.7159-$0.7170 zone, another leg lower seems highly likely. Thus a bearish view holds, with the $0.7159-$0.7170 resistance zone representing the likeliest area for it to occur.
Price would need to move back above $0.7215 for a bullish outlook to come back into play. Support levels of note are at $0.7097, $0.7069, $0.7044 and $0.7016. Resistance levels are at $0.7159, $0.7170 and $0.7215.