EUR/USD: Bullish Reversal Week; AUD/USD: Next Target - Credit Suisse

After forming a bullish reversal day last Thursday, EUR/USD ended the week forming a bullish reversal week reinforcing the case that a base is firmly in place, notes Credit Suisse.

"We look for further strength towards gap and 78.6% retracement resistance spanning from 1.1230 to 1.1256/59.

Above here can then target the February high at 1.1376 where we would expect fresh selling to show. Immediate support moves towards 1.1136, with the top of the base at 1.1068/58 ideally holding," CS projects.

In line with this view, CS maintains a long EUR/USD from 1.1140 targeting a move to 1.1370, with a stop at 1.1058.

Turning to AUD/USD, CS notes that with a base still firmly in place here, the risk can stay higher after the clear break above .7490/.7533 – the 50% retracement of the May 2015/January 2016 fall and interim price resistance.

This, according to CS, should reinforce the base for a further move towards .7739, with the recovery potentially extending towards .7832/50 – the June 2015 high and 38.2% retracement of the entire 2014/2016 bear trend.

Near-term support shows at .7441, followed by .7410. Below can target .7393/86, with .7322 ideally holding to maintain the base.

CS booked profit on its last AUD/USD position at 0.7380 and entered long again on the break above .7400, targeting a move to .7730 with a stop at .7280.

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