After pulling back yesterday, the GBP/USD found support at the bullish trend line and extended its rally further overnight. The stop buy trade from yesterday’s report was triggered just ahead of the North American close, and rates quickly rallied up to the profit target at 1.5758 overnight. As the pair hit the profit target, prices formed a Bullish Marubozu Candle on the 4hr chart, indicating strong bullish momentum as the strong resistance at 1.5775 was taken out. For the rest of the day, the bias will remain bullish for further rallies as long as the unit can hold above the key 1.5775 level.

USD/JPY dropped to new 3-month lows below 76.60 support yesterday as traders sold the Greenback against all comers. This leaves rates in the “Intervention Red Zone” where the BOJ is more likely to intervene and cause a rapid spike higher in the pair. Though trade in the pair has essentially stagnated near 76.30 over the past 20 hours, we will continue to closely watch for comments and actions out of Japan. For more on the intervention, and potential impact on all XXX/JPY pairs, see yesterday’s feature article “Rising Intervention Risk Prompts Two Stop Adjustments.”

Yesterday’s USD/CHF bounce stalled out at 4hr bearish trend line resistance, and the pair has now turned lower to test 2-month lows near .9116. As mentioned in yesterday’s report, the .9116 level also represents the monthly S1 pivot, a leading area of support for the pair that will serve as a key area to watch for the remainder of the week. If the bears are able to push the pair to close under this level, a further continuation down to .9000 becomes likely.

The USD/CAD reversed during yesterday’s North American session as the oversold bounce was unable to break above key previous-support-turned-resistance at 1.0070. During today’s early European session, the pair finally broke conclusively below parity (1.00), a key psychological support and looks like it may have room for further drops toward previous lows at .9900. Looking to sell the USD/CAD at market may make sense for some traders, but the risk/reward ratio would be greatly improved by waiting for a quick bounce and retest of 1.00.

In order to take advantage if such a bounce occurs, traders could set a limit sell order at .9990 (just under anticipated resistance at parity) with a stop at 1.0078 (above the key 1.0070 level) and a target at .9905 (prior to the previous lows at .9900).

The Aussie rallied against the U.S. Dollar yesterday after rates formed a Bullish Pin Candle off trend line support. As of right now, the pair is testing resistance near the Monthly R2 pivot at 1.0668, though a break above this ceiling would turn the bias bullish for a test of 6-month highs near 1.0750. Meanwhile, any pullbacks that emerge from this barrier are likely to find support at the bullish trend line; stay tuned to FX360 and our daily Live Market Analysis webinars for buying opportunities if we do see the AUD/USD pull back.

The Kiwi also traded rallied during today’s European session, confirming the break above key previous resistance at .8240 and leaving the pair at fresh 4-month highs. Rates have paused under the round .8300 handle thus far this morning, but the strong break of .8240 suggests that the bulls remain in control of trade. The bias will remain bullish, and buying opportunities will be favored, as long as the pair remains above .8240.