Current short term Forecast - page 13
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EUR/USD: Bearish: 1.0455/60 is the next target.
After several days of lethargic trading, we noted in the Chart of the Day update yesterday that EUR has to see a ‘break lower soon’ or the risk of a short-term low would increase quickly. The timing of the breach of the December 2015 low of 1.0540 bodes well for our bearish view and from here, the next most obvious level to aim for is at the 2015 low of 1.0455/60 (seen in March). All in, the bearish view that started early last week is intact until 1.0650 is taken out (adjusted from 1.0700).
GBP/USD: Neutral: Back in a 1.2300/1.2600 range. [No change in view]
As highlighted yesterday, despite the strong rebound from the Monday’s low of 1.2313, it is too early to expect to a sustained up-move. The strong pull-back yesterday reinforces our current neutral view and we continue to expect GBP to trade choppily, likely within a broad 1.2300/1.2600 range
AUD/USD: Shift from bearish to neutral: In a 0.7300/0.7510 range.
The bearish phase that started last Monday ended when AUD moved above the stop-loss at 0.7430 yesterday (high of 0.7446). The current movement is viewed as the early stages of a consolidation phase and we expect this pair to trade sideways for now, likely within a 0.7300/0.7510 range. Looking further ahead, only a clear break below 0.7300 would indicate that the bearish phase has resumed.
NZD/USD: Bearish: Focus shifts back to 0.6950.
NZD continues to hold below the 0.7100 stop-loss and the sharp drop yesterday indicates that the risk of a short-term low has decreased. The focus has shifted back to the 0.6950 level, the low in July last year (next support is at 0.6900).
USD/JPY: Bullish: 113.80 next target.
We noted in yesterday’s update that in order for USD to maintain its bullish momentum, it has to break above the strong 111.45 resistance within a couple of days. While the breach of this level was not surprising, the subsequent surge higher that easily took out several major resistances was not exactly expected. Nevertheless, the bullish phase that started 2 weeks ago is clearly intact and the next level to focus on is at 103.80, the minor high seen in late March this year.
EUR/USD: Shift from bearish to neutral: In a 1.0550/1.0750 range.
The bearish phase that started two weeks has ended. The current movement is viewed as the start of a consolidation phase, likely within a broad 1.0550/1.0750 range.
GBP/USD: Neutral: Back in a 1.2300/1.2600 range. [No change in view]
There is not much to add as GBP traded in a choppy manner over the last few days. We maintain our neutral view for this pair and expect further range trading, likely within a 1.2300/1.2600 range.
NZD/USD: Bearish: Increasing risk of a short-term low.
The strong daily closing last Friday has clearly dented the recent strong downward momentum. The risk of a short-term low has increased considerably and from here, a move above 0.7070 is enough to indicate that we have seen a short-term base at 0.6970 last Thursday.
USD/JPY: Bullish: Diminished odds for further USD strength.
While USD registered a fresh high of 113.89 last Friday, the weak daily closing coupled with the softness seen so far this morning suggests that the odds for further USD strength have diminished. That said, USD has to reclaim and stay above 113.00 or the risk of a short-term top would increase quickly.
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EUR/USD: Neutral: In a 1.0550/1.0750 range.
We just turned neutral on EUR yesterday and there is no change to the view. The current movement is viewed as part of a consolidation phase, likely within a 1.0550/1.0750 range.
GBP/USD: Neutral: Back in a 1.2300/1.2600 range.
GBP has been trading in a choppy manner over the last several days and at this stage, there is no early indication that the current neutral phase is about to end soon. In other words, we continue to expect a 1.2300/1.2600 range for now
AUD/USD: Neutral: Bullish if daily closing above 0.7555.
Upward momentum continues to improve and AUD is currently approaching the strong 0.7510 resistance. A break of this level would not be surprising but AUD has to close above 0.7555 before a sustained up-move can be expected. The odds for such a move appear to be quite high as long as 0.7430 is intact.
NZD/USD: Shift from bearish to neutral: In a 0.7000/0.7150 range.
The breach of 0.7070 yesterday indicates that the recent bearish phase in NZD has ended. The current recovery appears to have scope to extend higher but at this stage, a clear break above the expected sideway consolidation range of 0.7000/0.7150 is not expected.
USD/JPY: Shift from bullish to neutral: In a 110.25/113.10 range.
The sudden and sharp drop in USD yesterday took out the key support near 111.45 and indicates that the bullish phase that started earlier this month has ended. The high of 113.89 seen last Friday is viewed a short-term top and the current movement is likely the early stages of a correction/consolidation phase. The downside appears to be more vulnerable at this stage but any decline is expected to find solid support near 110.80, 110.25. The high of 113.10 seen yesterday is acting as a very strong resistance followed by 113.89.
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EUR/USD: Neutral: In a 1.0550/1.0750 range.
The choppy price yesterday reinforces our current neutral view on EUR. While the positive daily closing yesterday appears to be supportive for EUR, only a clear break above 1.0750 would indicate the start of a more significant recovery. In the meanwhile, this pair is expected to continue to trade in a broad 1.0550/1.0750 range.
GBP/USD: Neutral: Back in a 1.2300/1.2600 range.
We have held a neutral view on GBP for close to 2 weeks now. The price action has been choppy but the range for the past two weeks is well within our expected consolidation range of 1.2300/1.2600. While shorter-term indicators are mildly supportive, only a clear break above 1.2600 would indicate that GBP has moved into a bullish phase. In the meanwhile, expect further choppy trading between 1.2300 and 1.2600.
AUD/USD: Neutral: Bullish if daily closing above 0.7555. [No change in view]
Upward momentum continues to improve and AUD is currently approaching the strong 0.7510 resistance. A break of this level would not be surprising but AUD has to close above 0.7555 before a sustained up-move can be expected. The odds for such a move appear to be quite high as long as 0.7430 is intact.
NZD/USD: Neutral: Bullish if daily closing above 0.7150.
We turned neutral on NZD yesterday and were of the view that the current recovery has room to extend towards 0.7150. The pace of the rebound has been more rapid than expected and from here; a daily closing above 0.7150 would indicate that the current NZD strength could extend further towards 0.7230. This appears to be a likely scenario unless NZD were to move and stay below 0.7090 within these 1 to 2 days.
USD/JPY: Neutral: In a 110.25/113.10 range.
The recent bullish phase in USD is deemed to have ended and the current movement is likely the early stages of a broad consolidation phase. The downside appears to be vulnerable but any decline is expected to find solid support near 110.80, 110.25. Strong resistance is at 113.10 which was briefly exceeded yesterday with a high of 113.33.
EUR/USD: Neutral: In a 1.0550/1.0750 range.
While downward momentum has improved with the rather sharp drop yesterday, the outlook for EUR is still viewed as neutral. That said, a move below the low end of the expected sideway consolidation range of 1.0550/1.0750 would not be surprising but EUR has to close below the recent 1.0515 low before a sustained down-move can be expected. In the meanwhile, this pair is expected to stay under pressure unless it can reclaim 1.0665/70 soon.
GBP/USD: Neutral: Back in a 1.2300/1.2600 range. [No change in view]
We have held a neutral view on GBP for close to 2 weeks now. The price action has been choppy but the range for the past two weeks is well within our expected consolidation range of 1.2300/1.2600. While shorter-term indicators are mildly supportive, only a clear break above 1.2600 would indicate that GBP has moved into a bullish phase. In the meanwhile, expect further choppy trading between 1.2300 and 1.2600.
AUD/USD: Neutral: Back in a 0.7300/0.7500 range.
While the failure to move clearly above 0.7510 was not unexpected, the sharp drop from the 0.7497 high yesterday came as a surprise. The bias has shifted to the downside but any further down-move is expected to encounter solid support near 0.7300/10 (close to last month’s low). Looking further ahead, only a clear break below this level would indicate that AUD has entered a fresh bearish phase. In the meanwhile, we expect this pair to trade in a 0.7300/0.7500 range.
NZD/USD: Neutral: Back in a 0.7000/0.7150 range.
While NZD rallied strongly yesterday and touched a high of 0.7170, it surrendered most of its gains by end of the day. As noted, only a daily closing above 0.7150 would shift the outlook for NZD to bullish and this has clearly not happened. To put it another way, the outlook for NZD remains neutral for now and we are back into a 0.7000/0.7150 sideways trading range.
USD/JPY: Shift from neutral to bullish: Over-extended but room for further gains to 115.60.
The sudden surge in USD yesterday that took out the recent high of 113.89 was unexpected. The very strong daily closing suggests that the current movement is the start of a fresh bullish phase. From a shorter-term perspective, the up-move is severely over-extended but there appears to be room for further gains towards 115.60 (61.8% retracement of the 1- year decline from 125.85, June 2015 to 99.08, June 2016). In order to maintain the current overbought momentum, any pull-back should not move back below 113.20.
EUR/USD: Neutral: In a 1.0550/1.0750 range.
The short-term downward pressure has eased as EUR rebounded strongly and the major 1.0550 support was unthreatened. The bias is tilted to the upside from here but any up-move is unlikely to have enough momentum to move beyond the major 1.0750 resistance. In other words, the neutral phase that started on Monday (28/11) is still intact and we continue to expect trading to be confined to a 1.0550/1.0750 range for now.
GBP/USD: Shift from neutral to bullish: Expect 1.2770 to offer major resistance.
The sudden break above the recent 1.2300/1.2600 consolidation range resulted in a strong surge to a high of 1.2696 yesterday. While the strong rally has shifted the outlook for GBP to bullish, we see strong resistance at 1.2770 and this level may not be easy to crack. Overall, only a move back below 1.2470 would indicate that our bullish expectation is wrong (1.2500 is already a strong short-term support).
AUD/USD: Neutral: Back in a 0.7300/0.7500 range.
There is no change to the current view wherein we expect AUD to continue to trade within a 0.7300/0.7500 range. Only a clear break out of this range would indicate the start of a sustained directional move.
NZD/USD: Neutral: Back in a 0.7000/0.7150 range.
There is not much to add as NZD recovered quickly after dropping to a low 0.7044 yesterday. The outlook for this pair is still deemed as neutral and we continue to expect range trading between 0.7000 and 0.7150.
USD/JPY: Bullish: Over-extended but room for further gains to 115.60.
As noted yesterday, despite the over-extended rally, USD appears to have enough momentum to extend higher towards the major level of 115.60. In order to maintain the current overbought momentum, any pull-back should not move back below 113.20.
EUR/USD: Neutral: Room for extension higher to 1.0850.
We indicated yesterday that despite the strong downward pressure, we were reluctant to adopt a bearish stance as we view 1.0455/60 (low in 2015) as a very strong support and do not envisage a clear break below this level. Within a span of less than 24 hours, EUR surged higher by about 300 pips and the pressure has reversed quickly to the upside. That said, we see 1.0850 as a very strong resistance and at this stage, do not expect a sustained move above this level. In other words, we continue to hold a neutral view even though there is room for the current strong rebound to extend further towards 1.0850.
GBP/USD: Bullish: To take partial profit at 1.2770.
Upward momentum is showing signs of slowing as GBP continues to grind higher and the partial profit taking level indicated previously at 1.2770 appears to be within reach. A clear break above this level would open up the way for a move to 1.2865 but the odds for such a move do not appears to be very high at this stage.
AUD/USD: Neutral: In a higher range of 0.7350/0.7550.
While shorter-term momentum has improved with up-move over the past few days, it is too early to expect a sustained rally. The current movement is still viewed as part of a neutral consolidation range albeit at a higher 0.7350/0.0.7550 range instead of the 0.7300/0.7500 expected previously
NZD/USD: Neutral: In a higher 0.7050/0.7200 range.
Similar to AUD/USD, while short-term momentum has improved, the current NZD strength does not appear to be the start of sustained rally. Overall, the neutral consolidation phase is still intact even though this pair is expected to trade at a higher 0.7050/0.7200 range instead of the 0.7000/0.7050 expected previously.
USD/JPY: Bullish: In a 111.50/115.00 range.
We shifted from a bullish to neutral USD stance yesterday and there is no change to the view. The current movement is deemed as the early stages of a consolidation phase, likely within a very broad 111.50/115.00 range.
EUR/USD: Neutral: Room for extension higher to 1.0850.
Despite the rather rapid pull-back from a high of 1.0785 yesterday, the undertone for EUR is still positive. The post-Italian referendum rally appears to have scope to extend higher but at this stage, we do not envisage a move above the major 1.0850 resistance. Overall, EUR is expected to stay supportive unless there is a move back below 1.0640.
GBP/USD: Bullish: Took partial profit at 1.2770, low odds for further GBP strength.
The partial profit taking level of 1.2770 that was indicated two days ago was met as GBP touched a high of 1.2775 yesterday. As noted, this is a major resistance and while technically the next resistance is at 1.2865, the odds for further GBP strength are not high. That said, confirmation of a short-term top is only upon a move below 1.2630 (a breach of this level would indicate the start of a consolidation phase).
AUD/USD: Neutral: In a higher range of 0.7350/0.7550.
There is not much to add as AUD continues to trade in a relatively muted manner. The neutral phase that started about 2 weeks ago is still in place and we continue to expect range trading, likely within a 0.7350/0.7550 range.
NZD/USD: Neutral: In a higher 0.7050/0.7200 range. [No change in view]
Similar to AUD/USD, while short-term momentum has improved, the current NZD strength does not appear to be the start of sustained rally. Overall, the neutral consolidation phase is still intact even though this pair is expected to trade at a higher 0.7050/0.7200 range instead of the 0.7000/0.7050 expected previously.
USD/JPY: Neutral. A deeper pull-back appears imminent but within an overall 111.50/115.00 range.
EUR/USD: Neutral: Room for extension higher to 1.0850.
EUR traded in a relatively narrow range yesterday and there is no change to the view wherein we expect the ‘post-Italian referendum’ up-move to extend higher towards 1.0850. At this stage, a sustained move above 1.0850 seems unlikely. Only a move below 1.0640 would indicate that the short-term upward pressure has eased.
GBP/USD: Shift from bullish to neutral: In a 1.2480/1.2750 range.
The bullish phase that started last Friday ended with the breach of 1.2630 yesterday (we advocated taking partial profit at 1.2770). The current movement is viewed as the start of a neutral consolidation phase, likely within a broad 1.2480/1.2750 range.
AUD/USD: Neutral: In a higher range of 0.7350/0.7550. [No change in view].
There is not much to add as AUD continues to trade in a relatively muted manner. The neutral phase that started about 2 weeks ago is still in place and we continue to expect range trading, likely within a 0.7350/0.7550 range.
NZD/USD: Neutral: Bullish if daily closing above 0.7200.
While we noted the improved short-term momentum in recent updates, the rapid gain in NZD is unexpected. The current up-move is hovering around the major 0.7200 resistance and a daily closing above this level would indicate the start of a sustained up-move in NZD. This appears to be a likely scenario unless there is a move back below 0.7140 within these 1 to 2 days.
USD/JPY: Neutral: In a 111.50/115.00 range.
As highlighted in the update yesterday, while the outlook for USD is deemed as neutral, the nearterm bias is tilted to the downside. That said, any weakness is expected to find solid support near last week’s low at 111.50. Strong resistance is at 114.40 followed by the key level of 115.00.
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EUR/USD: Neutral: Downward pressure but expects strong support at 1.0505.
EUR registered a huge range of 277 pips yesterday but ended the day near the day’s low. The weak daily closing suggests that the near-term bias is tilted the downside but based on the current momentum, any further weakness is expected to encounter solid support at the ‘Italian referendum low’ of 1.0505. This level is followed closely by another major support which is the 2015 low of 1.0455/60. Overall, EUR is expected to stay under pressure in the coming days unless it can move and stay above 1.0760 (1.0700 is already a strong short-term resistance)
GBP/USD: Neutral: In a 1.2480/1.2750 range.
We just shifted to a neutral stance yesterday and there is no change to the view. The current movement is viewed as part of a consolidation phase, likely within a broad 1.2480/1.2750 range.
AUD/USD: Neutral: In a higher range of 0.7350/0.7550.
AUD edged above 0.7500 yesterday but the up-move was short-lived. Indicators are mostly flat which suggest further sideways trading within a 0.7350/0.7550 range.
NZD/USD: Neutral: Bullish if daily closing above 0.7200.
We were of the view that only a daily closing above 0.7200 would shift the current neutral outlook to bullish. NZD touched a high of 0.7223 yesterday but ended the day at 0.7150. From here, as long as 0.7140 is intact, another attempt to move clearly above 0.7200 is not ruled out even though the odds for such a move have diminished.
USD/JPY: Neutral: In a 111.50/115.00 range.
There is no change to the current neutral view and we continue to expect this pair to trade sideways within a very broad range of 111.50/115.00 for now.