EUR/USD: Bearish: Downside potential limited to 1.1215. We turned bearish EUR yesterday but highlighted that the downside potential is likely limited to 1.1215. The rather calm overnight trading has resulted in a quick loss in downward momentum but further weakness is still expected after the current short-term consolidation is over. Stop-loss remains unchanged at 1.1400.
GBP/USD: Neutral: In a 1.4300/1.4550 range. As mentioned yesterday, momentum indicators are not strong and we prefer to wait for a daily closing below 1.4300 before turning bearish. However, the strong and rather aggressive rally from the low of 1.4333 was unexpected. The recent downward pressure has eased and we continue to hold a neutral view for GBP and expect broad sideway trading between 1.4300 and 1.4550 for the next one week or so.
AUD/USD: We pointed out yesterday that AUD is trying to form a shortterm base for a recovery. However, confirmation of a shortterm low is only upon a move back above 0.7355. Until then, another leg lower to 0.7200 cannot be ruled out but the odds for such a move appears to be rather slim. A break above 0.7355 would indicate the start of a recovery phase that could extend to 0.7410 followed by 0.7470.
USD/JPY: Bullish: Rebound to extend higher to 109.70. USD/JPY traded quietly the past few days and this has led to a quick loss in momentum. However, the undertone is still clearly positive and we continue to anticipate a move to 109.70. This resistance has added significance now that it coincides with the falling trend-line. A break above this level could lead to a rapid rise to the next major resistance at 110.60.
For latest trades & forecasts from major banks, sign-up to eFXplus
Copyright © 2016 UOB, eFXnews™Original Article
