Current short term Forecast - page 16

[thenews]

EUR/USD: Neutral: Expect further upward grind towards 1.0765, possibly 1.0820.

The undertone for EUR has improved considerably and from here, further upward grind towards 1.0765 seems likely. A move above this level would shift the focus towards 1.0820. Overall, only a move below 1.0640 would indicate that the immediate upward pressure has eased.

GBP/USD: Neutral: Rebound to extend further towards 1.2480.

We noted last Friday that GBP is expected to stay underpinned as long as 1.2250 is intact. GBP touched a low of 1.2262 but recovered strongly and we continue to expect the current short-term GBP strength to extend higher towards 1.2480. In order to maintain the current positive momentum, any pull-back should not move back below 1.2260/65. Looking further ahead, a clear break above 1.2480 would indicate that GBP could move much higher in the coming weeks (next resistance at 1.2570).

AUD/USD: Bullish: Focus is at 0.7630 now.

AUD traded mostly sideways last Friday and there is nothing much to add. The bullish phase that started about 2 weeks ago is still intact until 0.7490 is taken out. On the upside, the level to focus on is at 0.7630 (where a break could lead to a quick move towards 0.7680).

NZD/USD: Bullish: 0.7250 is back in sight. [No change in view].

NZD dipped to a low of 0.7116 yesterday, coming close to the stop for our bullish view at 0.7095. The subsequent sharp rebound is a welcomed surprise and from here, 0.7250 appears to be back in sight. In other words, the bullish phase that started last Friday (13 Jan) is still intact and a move above last month’s 0.7250 high would shift the focus towards 0.7300 next. 

USD/JPY: Neutral: Below 113.50 indicates a move towards 112.55/60 has started.

USD opened lower this morning and is currently approaching 113.50. A clear break below this level would indicate a move towards 112.55/60 has started. In the next few days, USD is expected to stay under pressure unless it can move back above 115.00.

[thenews]

EUR/USD: Neutral: Expect further upward grind towards 1.0765, possibly 1.0820.

As noted yesterday, the undertone for EUR has improved considerably and EUR is expected to grind higher towards 1.0765, possibly 1.0820. The high has been 1.0774 during Sydney hours and while further upward extension is not ruled out, 1.0820 is a rather strong resistance and is unlikely to yield so easily. Overall, the current positive undertone would remain intact as long as the major support at 1.0670 is not taken out (1.0700/05 is already a strong shorter-term support). Looking further ahead, a break above 1.0820 would shift the focus towards last month’s high near 1.0870.

GBP/USD: Shift from neutral to bullish: Immediate target of 1.2650.*

We have been positive GBP since the middle of last week (post UK PM May’s speech) and were of the view that the strong rebound at that time has room to extend higher to 1.2480. However, the ease of which this strong declining trend-line resistance was taken out yesterday came as a surprise. Upward momentum has improved significantly and from here, GBP appears to have entered a bullish phase with an immediate target of 1.2650. That said, shorter-term indicators are looking overbought and those looking to turn long may likely to wait for a dip closer to 1.2460/70. Support is at 1.2430 but only a move below 1.2355 would indicate that our bullish expectation is wrong.

AUD/USD: Bullish: Focus is at 0.7630 now.

While AUD appears to be struggling to move clearly above 0.7600, the bullish phase that started two weeks ago is still intact. Only a move below 0.7520 would indicate that an interim top is in place. A clear break above 0.7630 could lead to acceleration higher towards 0.7700.

NZD/USD: Bullish: Room for extension to 0.7300.

NZD burst above the strong 0.7250 resistance (high of 0.7265 at the time of writing) and the 2-week bullish phase appears to have room to extend further to 0.7300. Overall, the outlook for NZD is deemed as bullish until 0.7150 is taken out.

USD/JPY: Neutral: Bearish if daily closing below 112.50.

While we highlighted yesterday that a break below 113.50 would open up the way for a move to 112.55/60, the rapid pace of the decline was unexpected. The immediate risk is still clearly on the downside but we prefer to wait for a daily closing below 112.50 before turning bearish. This appears to be a likely scenario unless USD can move and stay above 113.55 within these 1 to 2 days.

[thenews]

EUR/USD: Neutral: Diminished odds for towards 1.0820.

EUR tried but failed to maintain a toehold above 1.0770 (high of 1.0774). The recent positive undertone has eased somewhat with the pull-back from the high but as long as 1.0670 is intact, another attempt to move towards 1.0820 is not ruled out just yet, even though the odds for such a move have diminished.

GBP/USD: Bullish: Immediate target of 1.2650.*

We just adopted a bullish GBP stance yesterday and there is no change to the view. The immediate target is still at 1.2650; a clear break above this level would shift the focus towards 1.2730. Stop loss remains unchanged at 1.2355 for now but the 1.2415/20 low seen yesterday is likely strong enough to hold any short-term pull-back (stop-loss to shift higher only upon a move above 1.2570).

AUD/USD: Bullish: Focus is at 0.7630 now. [No change in view]

While AUD appears to be struggling to move clearly above 0.7600, the bullish phase that started two weeks ago is still intact. Only a move below 0.7520  would indicate that an interim top is in place. A clear break above 0.7630 could lead to acceleration higher towards 0.7700.

NZD/USD: Bullish: To take partial profit at 0.7295/00.

While the bullish phase in NZD that started more than a week ago is still intact, the current NZD strength appears to be overstretched and those who are long should look to book some partial profit especially when 0.7295/00 is a rather strong resistance. Overall, only a move below 0.7180 would indicate that that a short-term top is in place.

USD/JPY: Neutral: Early signs of stabilization but not out of the woods yet. 

Despite the generally negative undertone, USD tried but failed to move clearly below the major 112.50 support. The rapid and sharp bounce from a low of 112.49 yesterday suggests that the recent weakness is stabilizing. However, it is too early to expect a sustained up-move especially when there is a major resistance at 114.80 (declining trend-line). At the least, USD has to move and stay above 114.20 or the risk of a drop below 112.50 is still intact even though the odds for such a move have diminished somewhat. A clear break below 112.50 could lead to acceleration lower towards 111.50.