A series of factors overnight have added up to a correction in the major pairs. A slight hawkish leaning in the Fed meeting minutes, in addition to a higher than expected trade deficit for Japan, disappointing China HSBC flash manufacturing PMI, and weaker French flash PMIs have resulted in a shift away from the Euro and Sterling towards the Dollar. Subsequently, EUR/USD and GBP/USD are both under pressure today.
EUR/USD is now back towards the support around $1.3680 which is a key near term pivot level. A confirmed breach would open support around $1.3620 and $1.3560. The momentum looks negative and I will be looking for a chance to sell today as I am increasingly noticing bearish influences on this chart.
GBP/USD continues to drift back towards the 38.2% Fibonacci retracement level of the big bull run that comes in at $1.6603. Rallies are being sold into, so with any jump into the resistance band $1.6662/$1.6695 I am looking to use this as a chance to sell.
USD/JPY is a difficult shout near term. The rate continues to trade around the 102 pivot level. I may look to play the range at the extremes of the trading band 101.37/102.83, but calling the direction very near term is tough with momentum and moving averages so neutral.
Finally, I was stopped out of my EUR/GBP long at flat overnight on a dip below £0.8220. The outlook is becoming increasingly neutral, but I am looking at the price development at the pivot level around £0.8220 and if it continues to hold then I may begin to think about another position.