All eyes were turned on the U.K figures earlier this morning on the back of a light economic calendar today.

Therefore, traders were expecting an increase in volatility, especially in the British pound.

Effectively, we have seen strong numbers from the U.K, which pushed the Sterling strongly higher during the European trading session.

Beginning with employment change, surprisingly the U.K economy added 176K fresh jobs in May compared to estimates of 73K. In the meantime, the jobless claims retreated to 0.4K only down from a revised number of 12.2K previously.

Moreover, the Unemployment rate fell below 5% for the first time in eleven years, and registered 4.9% during the month of May, while both the claimant count rate and the average weekly earnings came out as expected at 2.2% and 2.3% respectively.

In Germany, the PPI MoM jumped to 0.6% in June up from -0.2% previously while in the Eurozone, we have seen a decrease in ECB current account surplus as the figures showed a total of 30.8B against 36.4B previously.

In the other side, the only news from the U.S were the mortgage applications, which registered a big decline by -1.3% down from 7.2%.

Technically, the U.S Dollar continue to edge higher as the index is on track for its third weekly positive close.

Dollar index

After several attempts to break above 96.70 weekly resistance, the U.S Dollar finally managed to overtake this level, which cleared the way for another rally in the direction of 97.20 resistance zone.

Therefore, the index has confirmed a bullish reversal in the daily chart and by now, any decline towards 96.70 zone (former resistance) is likely to find new buyers for another wave to the upside that can reach as high as 98.50 peak in the coming days.

In the flipside, only a daily close below 95.90 low should weaken this positive outlook.

GBP/USD

The pair declined towards 1.3050 support zone earlier today before to find strong demand following the publication of steady U.K figures.

As of now, the current rally is likely to extend in the direction of 1.3220/50 zone before to see a downside reaction in the Sterling.

From a wider angle, the trend remain bearish in the daily chart as far as prices keep trading below 1.3530 peak, while in the hourly chart, the outlook is neutral and traders should wait either for a clear breakout above 1.3310 or below 1.3050 support to confirm the next directional move in the Sterling.

USD/JPY

The Japanese Yen continue to lose ground as risk appetite continue to dominate investor’s sentiment.

Technically, prices have succeeded to break above all the near-term resistances and currently, traders should focus on 106.80 resistance level, which represents 50% retracement of the entire drop seen from 114.80 peak and from where we expect sellers to appear in the coming hours.

Consequently, a corrective wave may begin anytime soon; however, the pair is likely to stabilize above 104.60 low as it represents the near-term support in this pair.

In extension, a break below this support may push prices further down towards 104.35-103.90 zone before the bullish trend resume.

EUR/USD

The Euro managed to break below 4-week consolidation pattern as prices fell below the psychological support of 1.1000.

Currently, prices are likely to test the support zone of 1.0970/50, which represents a strong demand area for bulls ahead of the ECB press conference tomorrow.

If the pair manage to protect this level, then the sentiment is likely to remain neutral until we see a clear breakdown in the coming days.

While a break below 1.0970 support, should confirm today’s negative signal and should push prices towards 1.0900 support area in the coming hours.

Conversely, a daily close above 1.1085 resistance may send prices into a larger correction to the upside and a re-test of 1.1190 peak can be seen.

To summarize, the pair remain under pressure in the near-term and the upside potential is likely to be limited below 1.1085 short-term resistance.