GBPUSD falls back
Sterling struggles as Britain’s growth outlook rattles the market. The pair sought to consolidate its gains after a break above the daily resistance at 1.2640. A fall below 1.2480 has put short-term bulls on the defensive. Though the RSI’s oversold condition attracted some bargain hunters, they will need to push past the latest high at 1.2660 before they could regain control of the direction. Then the recovery could extend towards 1.2800. A close below 1.2460, however, may trigger a deeper correction to 1.2330.
EURJPY breaks psychological level
The euro climbs as traders expect a hawkish ECB at this week’s policy meeting. A close above April’s peak and the psychological level of 140.00 further boosted an overwhelmingly upbeat mood. Trend followers may look to jump in at a discount. June 2015’s high at 141.00 is the next hurdle and its breach would extend the rally towards 142.00. The RSI has shot into the overbought area and may briefly limit the impetus. The former supply zone around 139.50 has turned into a support if the single currency takes a breather.
GER 40 breaks resistance
The Dax 40 consolidates gains over improved risk appetite. The rally previously came under pressure at 14600. Its breach at a second attempt indicates strong buying interest and prompted the bears to cover. This could be a major step towards a sustainable recovery. A bullish MA cross on the daily chart suggests that the rebound may have gained traction. The March high at 14900 would be the next target. On the downside, 14300 is the closest support and 14000 a critical floor to keep the current rally intact.