GBPUSD rebounds from 1.2700 level; Dollar softens

Sterling staged a modest rebound against the Dollar today despite Brexit related uncertainty pushing investors away from the currency. The primary driving force behind the GBPUSD’s upside is likely based on a depreciating US Dollar. With the greenback seen extending losses ahead of the US jobs report on Friday, this has the potential to send the GBPUSD towards 1.2800 in the near term. Technical traders with an appetite for longer timeframes will continue observing how the GBPUSD trades within the 500-pip range on the weekly charts. There is a strong support at 1.2700 while resistance can be found at 1.3200. It will certainly take a significant risk event for this range to be broken.

With the current outlook in favour of bears, a solid weekly close below 1.2700 will pave a clear path towards levels not seen since June 2017 below 1.2590. For bulls to jump back into this losing game, prices need to break back above 1.2850.

AUDUSD tumbles towards 0.7200

The Australian Dollar has turned extremely bullish to bearish in a matter of days with prices crashing towards 0.7200 as of writing.

While fundamentals have played role in the brutal selloff, the technicals must not be overlooked. The bearish momentum created from the near 180 pip decline has the potential to inspire sellers to attack 0.7200 and below. If a solid daily close under this level is achieved, the next key point of interest will be at 0.7140 and 0.7090.

Dollar weakens ahead of NFP…

The Dollar is seen edging lower ahead of the US jobs reports scheduled for release on Friday. Appetite towards the currency sharply deteriorated in the week after an inversion of the U.S Treasury yield curve stimulated fears over the US economy decelerating. However, sentiment towards the Greenback could still swing in favour of the bulls this week if the US jobs report ticks all the boxes. A strong NFP figure coupled with signs of accelerating wage growth in November will reinforce expectations of higher US interest rates in 2019.

USDJPY sinks on risk aversion

Investor sentiment has been whacked by renewed trade tensions and fears over slowing global growth.

The Japanese Yen is set to appreciate further in the short term as investors scatter away from riskier assets to seek safe-haven investments. With the Dollar likely to remain depressed ahead of the US jobs report, the USDJPY has the ingredients to trade much lower. Technical traders will be closely observing how the USDJPY behaves around the 112.40 support level. A solid breakdown below this point is seen opening a path towards 111.77.