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EUR/USD: Neutral: Increasing upside risk.
There is no change to view wherein we continue to see increasing upside risk but it is unclear if EUR can break convincingly above the 1.1375 resistance (the lower 1.1342 resistance was breached overnight with a high of 1.1364). In other words, while we recognize the immediate upward pressure, we are not ready to become a full-fledged EUR bull just yet.
All that said, the upside risk will continue to increase unless there is move back below 1.1220 in the next few days. On a shorter-term not, 1.1270 is already a strong support.
GBP/USD: Neutral: Increasing upside risk.
Despite moving above 1.4400, the rally was short-lived as GBP dropped quickly from a high of 1.4457 to close near the day’s low. Nevertheless, short-term upward momentum remains strong and the odds for further GBP strength in the days ahead have improved considerably. The key resistance is clearly at the month-to-day high of 1.4514 and this level has to break before a sustained up-move in GBP can be expected.
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Overall, this pair is expected to remain underpinned in the coming days as long as 1.4200 is not taken out.
AUD/USD: Change to Bullish: Upside potential limited to 0.7740.
While the break above the month’s high of 0.7680 suggests further AUD strength is likely in the days ahead, the internal momentum is not as impulsive as we would like and the upside potential appears to be limited to 0.7740.
In order to maintain the current momentum, any pull-back should be limited and a break below 0.7550 is enough to indicate that our bullish expectation for AUD is wrong.
USD/JPY: Neutral: In a broad 111.50/113.50 range now.
There is no change to the neutral view and we continue to expect USD to trade in a broad 111.50/113.50 range for now.
