13 July 2016, 15:13
Vasilii Apostolidi

EUR/USD: Bearish: Time running out for EUR bears, need to break below 1.0995/00 in these two days.

While the outlook for EUR is still viewed as bearish with a stop-loss at 1.1185, time is running out for bears as the current prolonged consolidation has resulted in a rapid loss in downward momentum. This pair has to move and stay below 1.0995/00 in these two days or the outlook for EUR would shift to neutral. Support below 1.0995/00 is at 1.0909 and the ideal target at 1.0820 seems to be slipping away

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GBP/USD: *Shift from bearish to neutral: Recovery could extend higher to 1.3535.

We highlighted the increasing risk of an interim low yesterday and suggested profit-taking for those who are short. However, the rebound was much stronger and faster than expected. The current movement is viewed as a correction for now even though the recovery could extend higher to 1.3535 in the coming days. Overall, this pair is expected to remain supported unless there is a move back below 1.3050 with 1.3150 acting as a strong shorter-term support.

AUD/USD: Bullish: To take partial profit at 0.7700.

The bullish phase that started last Tuesday has exceeded not only the immediate 0.7600 target but also the post-Brexit high of 0.7650 (overnight high of 0.7658). The rally appears to have enough momentum to extend further and the next significant resistance is at the early May high of 0.7720 (prior to RBA’s rate cut). This is a major level and is expected to attract strong selling interest and as such, those who are long from last week may like to square at least half of their long on any approach to 0.7700. 

NZD/USD: Bullish: Target 0.7360.

After dropping precariously close to the stop-loss at 0.7200 (low of 0.7207), NZD rallied strongly to make a fresh high of 0.7325. The outlook remains bullish and we continue to target a move to 0.7360. Stop-loss remains unchanged at 0.7200 for now even though 0.7230 should be strong enough to hold any short-term pull-back.

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