The main topic on Monday was British pound. GBP/USD opened the week with a gap down (from 1.4390 to 1.4273) and fell to 1.4060. Sterling was hit by the worries that Britain will leave the European Union. London Mayor Boris Johnson, who has big influence in the UK, spoke in favor of ‘Brexit’ as the agreement between Prime Minister David Cameron and other EU leaders doesn’t contain necessary reforms. It was also in the news that 6 people from Cameron’s business advisory group are refusing to sign a letter endorsing the weekend deal. On Tuesday the Bank of England’s Governor Carney and other policymakers will testify on inflation and the economic outlook before Parliament’s Treasury Committee. Resistance is at 1.4228 and 1.4350. On the downside important support is at 1.4000. Pound is oversold in the short term, but the uncertainty makes longs risky.
EUR/USD fell below 1.1050 (200-day MA) that will now act as resistance. The single currency was affected by the euro area’s weaker-than-expected manufacturing and services PMIs. Support is at 1.0960/50 (trend line, 38.2% Fibo of the advance since December) ahead of 1.0900 and even 1.0800. Further resistance is at 1.1120, 1.1200 and 1.1250. German Ifo business climate is due at 09:00 GMT on Tuesday.
USD/JPY will likely keep trading sideways in the coming sessions. The pair found support in the 112.00 area. Next support is at 112.00 and 111.00. Resistance is at 113.45, 114.50 and 115.00. The picture will turn bearish in case of the daily close below 112.00.
Commodity currencies were pushed up by oil. AUD/USD rose above 0.7200. All in all, risk sentiment is expected to be better this week. Technical picture also improved and the levels to target on the upside include 0.7285 (200-day MA).
Origin: FX BAZOOKA
