The situation in this market is developing according to our expectations. Level 1.1300 again proved its strength and stability. On Wednesday, at this mark, the market found support and reversed, rebounding to the median level of 1.1360. There was a slight chance that the market would turn from this mark and decline in order to retest 1.1300, but this chance didn’t materialize. Now if the market can consolidate above 1.1360, this mark would again become a local support zone. The nearest resistance is located around 1.1380, this is a strong resistance zone, however, in order for the market to be able to believe in the current upward move, the market must overcome 1.1402 level and display the daily close above this mark.
Trading recommendations – careful longs around 1.1360
For the second trading session, the market is trading in a narrow range $ 1245- $ 1244. The market is consolidating and accumulating volume for a repeated assault on the recent high in area $ 1,249. The nearest local support is located in the $ 1241 zone, but really strong support is located in $ 1238 area, and we believe that the market has a chance to move down to this area for a short time before moving on to the actual test of this area.
Trading recommendations – careful longs around 1241 and lower in the area of 1238
The pound continues to be under influence of political and economic uncertainty in the UK. Yesterday, the ruling conservative party voted on a vote of no confidence in Teresa May however with no result. She remains at her post and now for one year the party members will not be able to raise this issue anymore. But already today, the news broke that the head of the opposition Labor Party, Jeremy Corbin, is actively negotiating the vote of non-confidence to Teresa May before the entire parliament. In general, GB political situation is not easy, although traders have responded positively to yesterday's news, as the deterioration of the political situation has been avoided. GBP rebounded from two year lows and was able to return to the former support level around 1.2660. Further perspectives remain uncertain.
Trading recommendations - out of the market
On Wednesday, Australian dollar was able to return above the level of 0.7200, a significant level of support then resistance now again support. It is interesting enough that on the daily chart there was not breaking of this level as quotes remained above 0.7200, despite the fact that the market closed below 0.7200 for more than two days. Now the nearest resistance and the target of the current pulse is located in the area of 0.7260.
Trading recommendations - longs in 0.7230-0.7200 area