EUR/USD: Neutral: Pull-back has room to extend lower to 1.1300.
We just shifted to a neutral stance last Friday and there is no change to the view. The current movement is viewed as corrective pull-back which has scope to extend lower to 1.1300 but at this stage, a sustained move below this level is not expected. Overall, this pair is expected to remain under pressure unless it can reclaim 1.1495.
GBP/USD: Neutral: Daily close below 1.4400 could lead to a sustained down-move to 1.4300.
As highlighted yesterday, a daily closing below 1.4400 would indicate the start of a sustained down-move with an immediate target of 1.4300. This appears to be a likely scenario unless GBP can reclaim 1.4500/05 within this couple of days.
AUD/USD: Bearish: Expect slow grind lower, below 0.7300 targets 0.7240.
While a move below 0.7300 would not be surprising, we are still of the view that the current AUD weakness is overextended and a sharp drop from here is unlikely. In other words, this pair could continue to grind lower and a breach of 0.7300 would target 0.7240 next. Stop-loss is adjusted lower to 0.7440 from 0.7480.
USD/JPY: Shift from neutral to bullish: Rebound to extend higher to 109.70.
The unexpected break above 108.00 is a good indication that the current rebound has scope to extend higher to 109.70. Support is at 107.60 but only a move below 107.20 would indicate that our bullish expectation is wrong.
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