Current short term Forecast - page 6

EUR/USD: Neutral: In a 1.1020/1.1250 range.

As highlighted yesterday, despite the improved shorter-term indicators, it is not enough to suggest the start of a sustained up-move in EUR. From here, as long as 1.1100 can hold, another attempt to move higher towards 1.1250 is not ruled out even though the prospect for such a move has dimmed after the quick pull-back yesterday. Overall, the neutral phase remains intact and only a clear break out of the expected 1.1020/1.1250 sideway trading range would indicate the start of a sustained directional move.

GBP/USD: Bearish: To take partial profit at 1.2850.

The slow drift lower in GBP is in line with our bearish expectation. The target is still at 1.2850 but as highlighted yesterday, the internal momentum is not strong and this level is unlikely to yield so easily. Those who are short may likely to take partial profit at this level. 

AUD/USD: Bullish: To take partial profit at 0.7805.

There is no change to the current bullish AUD view. However, as highlighted yesterday, in view of the rapid and extended rise, those who are long may like to book partial profit on any approach to 0.7805/10 (0.7760 is already a strong short-term resistance). 

NZD/USD: Bullish: Diminished odds for further NZD strength.

The rapid reversal after making a high of 0.7351 yesterday certainly does not bode well for NZD (especially with the weak daily closing). A break of 0.7170 would indicate that NZD has staged another ‘fake-out’ and would shift bullish outlook to neutral again. In order to maintain the current bullish momentum, NZD has to move above 0.7280 within these 1 to 2 days. At this stage, the odds for such a move are not high.

USD/JPY: Neutral: In a 100.50/102.80 range.

There is no change to the current neutral view and we continue to expect USD to trade sideways, likely within a broad 100.50/102.80 range.

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EUR/USD: Neutral: Positive undertone; bullish only if above 1.1250.

While the key short-term support at 1.1100 is still intact, last Friday’s EUR strength was fleeting and the 1.1221 high did not threaten the top end of the expected sideway trading range of 1.1020/1.1250. From here, the undertone for EUR is viewed as positive but only a clear break above 1.1250 would indicate the start of a sustained up-move. 1.1100 continues to act as a strong near-term support.

GBP/USD: Bearish: To take partial profit at 1.2850. [No change in view]

The slow drift lower in GBP is in line with our bearish expectation. The target is still at 1.2850 but as highlighted yesterday, the internal momentum is not strong and this level is unlikely to yield so easily. Those who are short may likely to take partial profit at this level. In the meanwhile, the stop-loss for the bearish is view is adjusted lower to 1.3075 from 1.3130 previously.

AUD/USD: Shift from bullish to neutral: In a 0.7595/0.7725 range.

AUD/USD trades down to  0.7640 at the time of writing and this indicates that the bullish phase that started more than a week ago has ended. The current outlook is deemed as neutral within a broad 0.7595/0.7725 range even though the near-term bias is for a probe lower to 0.7595 first

USD/JPY: Neutral: In a 100.50/102.80 range.

USD has been trading mostly sideways in the past 2 weeks. Flat indicators continue to suggest a neutral outlook for this pair and only a clear break out of the expected sideway trading range of 100.50/102.80 would indicate the start of a directional move. That said, the odds for a break below 100.50 are markedly higher compared to a move above 102.80.

EUR/USD: Neutral: Positive undertone; bullish only if above 1.1250.

EUR traded in a tight range yesterday and there is not much to add. The undertone for this pair is still viewed as positive and we continue to anticipate a stronger EUR in the next few days but only a clear break above 1.1250 would indicate that the start of a sustained up-move. On the downside, 1.1100 is acting as a major support and a breach of this level would suggest that the short-term upward pressure has eased.

GBP/USD: Bearish: To take partial profit at 1.2850.

GBP continues to drift lower accompanied by lackluster downward momentum. Those who are shorts should continue to look to take partial profit at 1.2850. A break below this level would shift the focus to the early July low of 1.2795/00. At this stage, this pair does not appear to be in a hurry to move towards this level. 

AUD/USD: Neutral: In a 0.7595/0.7725 range.

We shifted to a neutral stance yesterday and there is no change to the view. The current movement is likely the early stages of a sideway consolidation phase, likely within a 0.7595/0.7725 range.

NZD/USD: Shift from bullish to neutral: In a 0.7120/0.7270 range.

The breach of the 0.7170 stop-loss (low of 0.7165 yesterday) was not surprising. The recent bullish expectation was wrong and from here, NZD is deemed to have enter a sideway consolidation phase even though the bias is for a probe lower first. Overall, we expect NZD to trade in a broad range from here, likely between 0.7120 and 0.7270.

EUR/USD: Shift from neutral to bullish: Immediate target of 1.1350 followed by 1.1430/35.

We highlighted the increasing risk of a higher EUR in recent updates and the clear break above 1.1250 yesterday finally indicates the start of a bullish phase. The immediate target is for a move to 1.1350 and based on the current impulsive momentum, further extension to the 1.1430/35 high seen on the day of Brexit would not be surprising. Strong support is at 1.1220 but only a move below 1.1170 would indicate that our bullish expectation is wrong.

GBP/USD: Shift from bearish to neutral: Rebound has scope to extend higher to 1.3170.

While we highlighted the lackluster downward momentum in recent updates and suggested taking some profit at 1.2850, we did not expect the sudden and strong rally yesterday. The outlook for GBP has shifted to neutral and we view the current movement as a corrective recovery. Based on the rather strong momentum, the current rebound appears to have scope to extend higher to 1.3170. At this stage, a sustained move above this level is not expected. Overall, this pair is expected to stay supported in the next several days and any short-term pull-back is expected to encounter solid support at 1.2920.

AUD/USD: Neutral: In a 0.7595/0.7760 range.

AUD moved above the strong 0.7725 resistance yesterday with a high of 0.7750. However, the up-move was shortlived and the rapid and sharp pull-back from the top reinforces our current neutral view on this pair. That said, the increased volatility suggests a wider consolidation range of 0.7595/0.7760 instead of the 0.7595/0.7725 expected previously.

NZD/USD: Neutral: In a 0.7120/0.7350 range.

We turned neutral on NZD yesterday and did not expect the strong and sudden bounce. While momentum has improved, we are not convinced that the current NZD strength can move significantly above last week’s 0.7350 high. From here, we prefer to continue to hold a neutral view but expect a higher 0.7170/0.7350 consolidation range.

EUR/USD: Bullish: Immediate target of 1.1350 followed by 1.1430/35.

We turned bullish EUR yesterday and there is no change to the view. From here, we continue to expect to see a move to 1.1350 where a break would shift the focus to the 1.1430/35 high seen on the day of Brexit. Stop-loss remains at 1.1170 for now but 1.1220 is likely strong enough to hold any shortterm pull-back.

GBP/USD: Neutral: Rebound has scope to extend higher to 1.3170.

The outlook for GBP shifted from bearish to neutral yesterday and there is no change to the view. The current movement is viewed as a corrective rebound which has scope to extend higher to 1.3170. At this stage, a sustained move above this level is not expected. The current positive undertone looks likely to persist for the next several days unless there is a move back below 1.2920.

AUD/USD:Neutral: In a 0.7595/0.7760 range.

AUD dipped to a low of 0.7608 yesterday, holding just above the 0.7595 support. Despite the sharp drop, the current movement is still considered as part of a broader neutral consolidation phase. In other words, we expect further broad range trading for now, likely within a 0.7595/0.7760 range.

NZD/USD: Neutral: In a 0.7170/0.7350 range. [No change in view]

We turned neutral on NZD yesterday and did not expect the strong and sudden bounce. While momentum has improved, we are not convinced that the current NZD strength can move significantly above last week’s 0.7350 high. From here, we prefer to continue to hold a neutral view but expect a higher 0.7170/0.7350 consolidation range.

USD/JPY: Bearish: Overextended drop but room to extend further to 99.05/10.

Despite the overextended drop, USD has scope to extend further towards the 99.05/10 low seen on the day of Brexit.

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EUR/USD: Bullish: To take partial profit at 1.1430/35.

The immediate bullish target that was indicated on Wednesday was quickly met as EUR surged to an overnight high of 1.1365. While the outlook is still clearly bullish and the next level to focus on is at 1.1430/35 (high on the day of Brexit), the pace of the current rally appears to be unsustainable and those who are long should look to take some profit on any approach to 1.1430/35. 

GBP/USD: Neutral: Room for further extension to 1.3270 but odds are not high.

While we anticipated a corrective rebound to 1.3170 (see update on Wednesday), the pace of the up-move was unexpected. The high has been 1.3186 so far and with no signs of weakness just yet, the current GBP strength appears to have room to extend further to 1.3270 even though the odds for such a move are clearly lower (an unlikely clear break above 1.3270 would indicate that GBP has entered a bullish phase). All said, this pair is expected to stay underpinned in the next few days unless there is a move back below 1.3020.

AUD/USD: Neutral: In a 0.7595/0.7760 range.

There is no change to our current neutral view as AUD traded choppily over the last few days. The outlook from here is still mixed and we continue to expect to see broad sideway trading between 0.7595 and 0.7760. That said, the short-term bias is tilted to the downside and it is likely that we would see a move to 0.7595 first even though a sustained move below this level is not expected.

NZD/USD: Neutral: In a 0.7170/0.7350 range.

NZD traded in a choppy manner over the last few days and we continue to hold a neutral view for this pair. Further choppy trading is expected, likely within a 0.7170/0.7350 range.

USD/JPY: Bearish: Overextended drop but room to extend further to 99.05/10.

As highlighted in recent updates, the drop in USD is overextended but there is room for further weakness to 99.05/10. However, the odds for such a move would diminish quickly unless USD can break below the recent low of 99.50/55 soon. On the upside, stop-loss for the bearish view remains unchanged at 101.20 even though 100.70 should ideally cap any short-term rebound.

EUR/USD: Bullish: To take partial profit at current level.

The weak closing last Friday indicates that the odds for a move to 1.1430 have diminished. Those who are long should look to book partial profit around current levels. A move below 1.1240 would indicate that a short-term top is in place (and the start of deeper pull-back to 1.1190).

GBP/USD: Neutral: Short-term top in place, weakness could extend lower to 1.2980.

GBP dropped sharply after making a ‘fresh high’ of 1.3186 last Friday. While the outlook for this pair is still viewed as neutral, the weak daily closing indicates that a short-term top is in place and the current weakness could extend lower to 1.2940. At this stage, a sustained move below this level is not expected. Overall, GBP is expected to remain under pressure in the next several days unless it can move and stay above the 1.3186 high.

AUD/USD: Neutral: Room for pull-back to extend lower to 0.7545/50.

The anticipated pull-back in AUD has been more rapid than expected and further extension to 0.7545/50 would not be surprising. A clear break of this level would indicate that the current neutral outlook has shifted to bearish. The downward pressure would continue to increase unless AUD can move and stay above 0.7660 within these 1 to 2 days

NZD/USD: Neutral: In a 0.7170/0.7350 range.

NZD traded quietly last Friday and at this stage, there is no reason to expect the current neutral phase to end. In other words, further range trading between 0.7170 and 0.7350 is still expected.

USD/JPY: Bearish: Diminished odds for further USD weakness.

While the stop-loss for the current bearish USD view is still intact at 101.20, the strong rebound last Friday and the strongly opening this morning clearly indicates a lower odds for further USD weakness. Unless USD can move and stay below 100.00 within these couple of days, a break above 101.20 would not be surprising.

EUR/USD: Bullish: Lower odds for a further extension to 1.1430.

While the outlook for EUR is still deemed as bullish, the prolonged consolidation below last Thursday’s peak of 1.1365 has resulted in further loss of upward momentum. Unless there is a ‘clear and clean’ break above 1.1365 within these few days, the prospect for a move to the revised target of 1.1430 would continue to dim. Stop-loss on longs should remain at 1.1240 for now even though a break below 1.1265/70 would be an early indication that a short-term top is in place.

GBP/USD: Neutral: Bullish only if above 1.3250.

The recent short-term weakness has not only stabilized but the strong rally over the past 2 days has shifted the nearterm risk to the upside. The key level to watch is at 1.3250 (trend-line connecting the peak in July and early August) as a break above this level would strongly indicate the start of a sustained up-move towards 1.3370. Strong support is at 1.3100 but only a move back below 1.3040 would indicate that the short-term upward pressure has eased.

AUD/USD: Neutral: Room for pull-back to extend lower to 0.7545/50.

There is no change to the view wherein we expect the current pull-back in AUD to extend lower to test the strong 0.7545/50 support. This is a rather critical level and a clear break could lead to sustained down-move in the coming days. Overall, AUD is expected to stay under increasing downward pressure unless it can move and stay above 0.7660 (high has been 0.7655 yesterday).

NZD/USD: Neutral: In a 0.7170/0.7350 range.

NZD touched a high of 0.7345 yesterday, holding just below the high end of the expected sideway trading range of 0.7170/0.7350. The rapid pull-back from the top is in line with our current neutral expectation for NZD and from here; we continue to expect to see broad sideway consolidation between 0.7170 and 0.7350.

USD/JPY: Bearish: Increasing risk of a short-term low.

After dropping to a low of 99.50/55 early last week, USD has been struggling to extend its down-move. The consolidation over the last several days has resulted in a rapid loss of momentum and this coupled with the still oversold conditions has increased the risk of a short-term low. However, only a break above 100.80 (adjusted from 101.20 previously) would indicate that the current bearish phase has ended.

EUR/USD: Bullish: Lower odds for a further extension to 1.1430.

The bullish phase in EUR that started last Wednesday appears to be close to ending. The overnight low of 1.1242 was just a couple of pips above stops at 1.1240. The price action is not surprising as we have highlighted the decreasing odds for further EUR strength in the past few updates. From here, unless EUR can move and stay above 1.1310/15 by end of today, the outlook for the next few weeks is expected to shift to neutral (for a period of sideway consolidation).

GBP/USD: Shift from neutral to bullish: Target 1.3370/75.

The break of the key 1.3250 resistance indicates the start of a sustained up-move in GBP towards the 1.3340/45 high seen earlier this month. The upward momentum is not as impulsive as we would prefer and from here, a move back below 1.3100 is enough to indicate that our bullish expectation is wrong.

AUD/USD: Neutral: Room for pull-back to extend lower to 0.7545/50. [No change in view]

There is no change to the view wherein we expect the current pull-back in AUD to extend lower to test the strong 0.7545/50 support. This is a rather critical level and a clear break could lead to sustained down-move in the coming days. Overall, AUD is expected to stay under increasing downward pressure unless it can move and stay above 0.7660 (high has been 0.7655 yesterday).

NZD/USD: Neutral: In a 0.7170/0.7350 range.

NZD continues to trade choppily and there is no change to our neutral view. Further broad sideway consolidation still seems likely and only a clear break out of the expected 0.7170/0.7350 range would indicate the start of a directional move.

USD/JPY: Bearish: Increasing risk of a short-term low.

The current price action has resulted in further loss in downward momentum and unless USD can move and stay below 99.90 by end of today, the bearish outlook will shift to neutral (a break above 100.80 would have the same result). In other words, the bearish phase that started middle of last week appears to be ending and this would likely lead to a period of consolidation at these lower levels.