GBPUSD TECHS: Bear Trend Extension
- RES 4: 1.2877 High Apr 25
- RES 3: 1.2772 High Apr 26
- RES 2: 1.2638 High May 4 and a key resistance
- RES 1: 1.2406/2599 High May 9 / 20-day EMA
- PRICE: 1.2191 @ 17:06 BST May 12
- SUP 1: 1.2162 Low May 22 2020
- SUP 2: 1.2081 76.4% retracement of the Mar ‘20 - Jun ‘21 uptrend
- SUP 3: 1.2000 psychological round number
- SUP 4: 1.1903 1.00 proj of the Apr 14 - 28 - May 4 price swing
GBPUSD traded softer Thursday, prompting fresh cycle lows. This marks an extension of the sharp sell-off on May 5, that confirmed a resumption of the downtrend. The move lower maintains the bearish price sequence of lower lows and lower highs and note that moving average studies are in a bear mode condition. The focus is on 1.2162 next, the May 22 2020 low. Initial resistance is seen at 1.2406, high May 9.
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GBPUSD TECHS: Path Of Least Resistance Remains Down
- RES 4: 1.3439 High Feb 25
- RES 3: 1.3398 61.8% retracement of the Feb 10 - Mar 15 downleg
- RES 2: 1.3252/98 50-day EMA / High Mar 23
- RES 1: 1.3136/83 20-day EMA / High Mar 30
- PRICE: 1.3041 @ 16:04 BST Apr 12
- SUP 1: 1.2983 Low Apr 8
- SUP 2: 1.2954 1.764 proj of the Jan 13 - 27 - Feb 10 price swing
- SUP 3: 1.2933 Low Nov 5 2020
- SUP 4: 1.2855 Low Nov 2 2020 and a key support
GBPUSD remains vulnerable. The pair traded lower Friday, resulting in a print below key support at 1.3000, the Mar 15 low and a bear trigger. The move lower confirms a resumption of the primary downtrend and an extension of the recent pullback from 1.3298, the Mar 23 high. A continuation lower would open 1.2954, a Fibonacci projection level. Initial resistance is at 1.3125, the 20-day EMA ahead of the key 50-day EMA level at 1.3243.
US: Kirby: US Not Involved In Slovakia MiG-29 Fighter Plane Transfer
Pentagon Press Secretary John Kirby has delivered a press conference with updates on the war in Ukraine.
- Kirby says the US is continuing to provide military aid to Ukraine: 'As much as we can and as fast as we can.'
- Kirby says that the Pentagon is not involved in any deal to accelerate the transfer of Slovakian MiG-29 fighter planes to Ukraine.
- Kirby says the decision is one to be made by Bratislava, suggesting that any deal will be made unilaterally by Slovakia rather than through US as an intermediary.
- local wires reporting that the Slovakian Ministry of Defence has also appeared to roll back on the proposal in the last few minutes.
US OUTLOOK/OPINION: Wells Fargo: March Marks The Peak In Post-COVID Inflation
Wells Fargo expects March's inflation report to mark "the peak in post-COVID inflation" (though they still expect the Fed to "expedite tightening" with 50bp hikes in both May and June).
- They note that "energy was not the only source of pain for households" in the March CPI report, with food at home prices up 10% Y/Y (the highest increase in grocery prices in 41 years).
- But "underneath the surface there are signs that pandemic-related inflation is beginning to ease", including a sharp fall in core goods inflation.
- Although core services gathered steam, "this rotation away from goods and toward services inflation has been long anticipated, and although widening lockdowns in China are a risk to this transition, today's data are an encouraging sign that goods inflation is finally rolling over."
