The Pound Sterling, like all other major currencies, rallied against the greenback yesterday. Yesterday’s move took rates up through previous resistance at 1.5670, which also marked the target on our long trade from Monday. Looking ahead, the pair is currently stalling below the round 1.5700 handle; if this barrier is eclipsed, the unit may target the Monthly R1 pivot at 1.5758. From a longer-term perspective, the bias will remain bullish above the Monthly Pivot at 1.5560.

After stalling out at critical previous resistance at 78.25, the U.S. Dollar fell sharply against the Japanese Yen yesterday. As of writing, the pair is consolidating in the mid-77.00s. Any further drops may find a floor off previous-resistance-turned-support at 77.32 (which also represents the central Monthly Pivot Point), whereas rallies may be capped near minor resistance at 77.68.

The USD/CHF also dropped yesterday failing to break above monthly pivot point resistance mentioned in yesterday’s Candlestick Daily report. With rates currently testing key previous support at .9180, a bounce today would not be surprising. However, the longer-term downtrend will remain intact as long as rates remain below the monthly pivot at .9300. Stay tuned to FX360 and our daily Live Market Analysis webinars for any updates or developing trade opportunities over the course of the day.

USD/CAD finally broke below critical longer-term support at 1.0070, leading to a quick drop down to psychological support at parity (1.00). Thus far this morning, rates have found a modicum of support off this area, but the break below the longer-term descending triangle suggests a higher probability of further drops down toward .9900 over the next few days (see last week’s outlook report for more). Meanwhile to the topside, the strong previous-support-turned-resistance level at 1.0070 is likely to limit any near-term rallies that do emerge, and potentially present selling opportunities later on today.

The Aussie also strengthened against the greenback yesterday after rates were unable to drop below key support at the Monthly R1 Pivot (1.0439). The pair is now trading over 200 pips above this level, with the current rally testing Monthly R2 pivot resistance at 1.0668. Note that the pair also formed a Bullish Marubozu Candle overnight, foreshadowing the early European session rally up to current levels. As with many other currency pairs, the Australian dollar could pull back today off resistance, but the longer-term uptrend remains intact.

The Kiwi was perhaps the strongest currency yesterday as rates surged after finding support in the mid-.8000s. As we outlined yesterday, the buy trade from Monday was triggered at .8053, just before yesterday’s massive rally. Just this morning, the pair reached the profit target at .8225, resulting in an efficient trade with a favorable risk/reward ratio featuring nearly 3 pips of reward for each pip of risk. Looking ahead, the Kiwi is also testing key resistance, in this case from the previous highs set in late October, meaning that there is potential for a near-term pullback today. However, if the bulls are able to push the pair above .8250, further continuation to the topside will be favored.