GBP/USD recovered back above $1.6200 after hitting Sep.16 low of $1.6160 on Tuesday. Break below the $1.6275 area was a strong bearish signal that confirmed a local peak at $1.6520. Fix below $1.6160 will open the way to $1.6060 (Sep.10 low). Don’t miss the UK manufacturing PMI on Wednesday at 8:30 GMT. The index is expected to have grown from 52.5 to 52.6 in August, but is still remains far below the yearly highs.
USD/JPY hit a new 6-year high of 109.85. Global demand remains elevated, so we expect our initial target of 110.60 to be hit on the current week. Short-term support lies at 109.10. Japan will release Q3 Tankan indices tonight – forecasts are downbeat, so USD/JPY could get more growth fuel.
AUD/USD recoiled down from the downtrend channel resistance in the $0.8770 area, but was getting support on the downside. The key support is at $0.8700. Watch whether Australian retail sales data and Chinese official PMI will surprise the market. Risk sentiment isn’t positive and we don’t recommend longs until the current downtrend is breached.
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