AUDUSD Next Week Outlook - 0.7597 as nearest breakdown level

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Sergey Golubev, 2015.06.26 08:55

Australia and New Zealand Banking Group - 'We continue to advise selling rallies in EUR/USD' (based on efxnews article)

"A resolution to Greek debt negotiations may reduce downside risks, but a weak currency is needed to underpin the recovery...If anything, the risks to monetary policy are for additional QE as the current ECB forecasts are based on a full implementation of the existing program," ANZ argues.

"We therefore continue to see downside risks for the euro against the USD, especially as US growth is firming again and the FOMC seems closer to starting the interest rate normalisation process. We continue to advise selling rallies in EUR/USD," ANZ advises.

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Sergey Golubev, 2015.06.27 06:28

Tech Setups For EUR/USD, GBP/USD, AUD/USD, USD/CAD - Barclays (based on efxnews article)

EUR/USD: No change. We are bearish and prefer to fade upticks against resistance in the 1.1300 area. A move below 1.1135 would signal lower towards our targets near the 1.1050 area and then the 1.0815 May lows. Our greater downside targets are at the 1.0460 year-to-date lows. 

GBP/USD: Thursday’s bullish engulfing candle has encouraged us to re-instate our bullish view. We are looking for a move back towards the 1.5930 range highs. Above there would confirm upside towards our greater targets near 1.6000 and then 1.6200. 

AUD/USD: No change. We are bearish against the 0.7850 recent highs and look for a move lower towards targets near 0.7600 and then the 0.7530 year-to-date lows. Further out, we are targeting the 0.7100 area.

USD/CAD: Our bullish view would be encouraged by a break above 1.2425. Our initial targets are towards the 1.2565 June highs and then the 1.2835 year-to-date highs.

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Sergey Golubev, 2015.06.28 18:44

Morgan Stanley - EUR, JPY, GBP, AUD, CAD: Outlooks For The Coming Week (based on efxnews article)

"EUR: Markets Still Waiting for Greece. Bearish.

We remain bearish EUR over the medium term but believe that short term trading will be dominated by market risk appetite. Should European equities sell off as concerns about Greece rise, European investors would need to buy back their short EUR currency hedges, supporting the currency. That said, Greece remains a major risk and tensions are escalating, which could drive markets to increase the risk premia in the price of EUR, weighing on the currency.

JPY: Flows Keep JPY Supported. Bullish.

We believe JPY is likely to be one of the outperformers over the coming months and treat it like our quasi-dollar. Flow data suggests that Japanese investors continue to be net sellers of foreign bonds, driven by the higher volatility and thus this prevents the JPY weakening further. The key risk over the coming weeks is market’s risk appetite. A deterioration from negative news from Greece could be a further support for the JPY. We like medium term EURJPY short positions.

GBP: Strong Wages Keep GBP Supported. Neutral.

GBPUSD is being mainly driven by rate expectations and should the recent strong wage data be sustained then this should bring forward rate expectations. This week the BoE’s Weale suggested that he could vote for a rate hike as early as August. We believe there is potential for GBPUSD to reach 1.60 but prefer buying on the crosses, in particular against the NOK where an accommodative central bank highlights the divergences between the two currencies.

CAD: Trades with Oil. Bearish.  

We believe CAD is likely to weaken over the medium term in line with other commodity currencies and still observe a strong correlation with oil. The upcoming CPI print will be important, given prices have been on a down trend, and we believe the Bank of Canada could generally be too optimistic. Markets are pricing in little chance of a cut, and should this increase, it could weaken CAD in an environment of broader USD strength.

AUD: External and Domestic Pressures. Bearish.

We expect the AUDUSD uptrend to remain limited and would sell on rebounds. The outlook on the economy remains weak and now that iron ore prices are expected to weaken over the coming months from increased supply, there could be a renewed story to support the next leg lower in the AUD. Indeed, the RBA needs to remain dovish for our near term story to hold so it is a risk if the governor sounds less dovish than markets have come to rely on. 0.76 is a key support level."

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Sergey Golubev, 2015.06.28 21:25

COT report by Scotiabank: Takeaways On USD, EUR, AUD, & Other Majors (based on efxnews article)

EUR sentiment deteriorated for the first week in four, the net short widening $1.3bn to $13.9bn. Its w/w shift was the result of a paring back in both long and short positions, highlighting a broader trend of withdrawal in traders’ participation as a result of elevated uncertainty and the binary nature of Greek risk.

Investors pared back JPY risk in a manner similar to that observed in EUR, albeit to a greater degree with a $2.7bn decline in gross longs and $2.0bn decline in gross shorts. The pattern suggests that traders await a greater degree of certainty in the face of binary Greek risk.

CAD sentiment has deteriorated for the third week in four, the net short widening $0.4bn to $1.4bn on the back of a decline in gross longs—falling to their lowest levels since June 2013.

AUD sentiment is also bearish, albeit modestly so with a net short at $0.7bn. Investors in appear cautious in adding to risk in either CAD or AUD, waiting for a breakout of their relatively narrow ranges.