EUR/USD: Bearish: Diminished odds for further down-move.
EUR touched a high of 1.1386 yesterday, holding just below the stop-loss for our bearish view at 1.1395.
Despite the sharp drop from 1.1386, this pair has to crack the major 1.1230 support before a move towards our 1.1145 target can be expected. In the meanwhile, stop-loss remains unchanged at 1.1395 (to be adjusted only upon a breach of 1.1230).
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GBP/USD: Neutral: Daily close above 1.4455/60 would shift outlook to bullish.
As indicated yesterday, despite the rapidly improving momentum, GBP has to close above 1.4455/60 before further sustained up-move can be expected. The sharp overnight pull-back has clearly dented the upward momentum but another attempt to move above 1.4455/60 cannot be ruled out just yet.
Only a move back below 1.4240 would indicate that the short-term upward pressure has eased.
AUD/USD: Bullish: Target a move to 0.7850.
There is no change to our bullish as we continue to expect the current AUD strength to move to 0.7850 (break above this level would shift the focus to 0.7935).
Stop-loss remains unchanged at 0.7660 even though 0.7700 is likely strong enough to hold any short-term pull-back.
USD/JPY: Neutral: In a broad 107.65/110.00 range.
The sharp and rapid drop in USD that started from 113.80 (29 March) is showing signs of slowing down. Attempts to move below 108.00 were thwarted by the strong 107.60/65 support and the downward pressure has eased with the recovery from the low. Daily MACD is showing bullish divergence and has crossed into positive territory as of yesterday.
All these point to USD is trying to form a base for a move higher. However, USD has to break above the major and key 110.65 resistance (low in midMarch & falling trend-line) to indicate that a short-term low is in place (110.00 is already a strong resistance).
Overall, this pair is expected to remain underpinned unless there is a move back below 108.50 within the next several days.