Current short term Forecast - page 8

EUR/USD: Neutral: Bullish only if daily closing above 1.1300.

While EUR moved above 1.1300 yesterday and touched a high of 1.1326, the up-move was short-lived. As highlighted in recent updates, only a daily closing above 1.1300 would indicate that EUR has entered a bullish phase. That said, the undertone for this pair is still positive and as long as 1.1190 is not taken out in the next few days, the upward pressure would likely continue to increase

GBP/USD: Shift from bullish to neutral: In a 1.3150/1.3450 range.

The bullish phase that started last Friday has ended with the move back below 1.3300 yesterday (low of 1.3282). The current movement is viewed as a consolidation phase and GBP is expected to trade sideways, likely within a broad 1.3150/1.3450 range. From a shorter-term perspective, the immediate bias is tilted to the downside but any decline is expected to slow and a clear break below 1.3150 is not expected at this stage. 1.3400 is a strong resistance ahead of the recent high near 1.3450.

AUD/USD: Bullish: Immediate target of 0.7740.

AUD staged a strong rally yesterday but was unable to move beyond the strong 0.7740 resistance (high was 0.7637). This level is also our immediate target but as highlighted in the Chart of the Day update yesterday, 0.7740/0.7760 is a strong resistance zone and the failure to move above these levels is not exactly surprising. Overall, the outlook for AUD is still deemed as bullish unless the current stop-loss at 0.7585 is taken out

NZD/USD: Bullish: Increasing risk of a short-term top.

The sharp decline in NZD yesterday was unexpected and the overnight low of 0.7384 came very close to our stop-loss at 0.7370. Unless NZD can move and stay above 0.7480 within these 1 to 2 days, a break below 0.7370 would not be surprising. In other words, it is increasingly likely that a shortterm top is in place.

USD/JPY: Neutral: In a 100.80/103.20 range.

The recent short-term downward pressure has eased with the strong and rapid rebound yesterday. While the outlook for USD is still deemed as neutral, it is more likely to trade sideways within a broad 100.80/103.20 range instead of extending lower to 100.05 as expected previously

EUR/USD: Neutral: In a 1.1150/1.1330 range.

The recent build-up in momentum fizzled out quickly as EUR pulled back after failing to stay above the 1.1300 resistance. The neutral phase that started early last week is still intact and we expect this pair to continue to trade listlessly, likely between 1.1150 and 1.1330.

GBP/USD: Neutral: In a 1.3200/1.3450 range.

GBP dipped to a low of 1.3235 yesterday but rebounded quickly. The neutral outlook that started last Friday is still intact and further sideway trading is expected, likely within a 1.3200/1.3450 range instead of the 1.3150/1.3450 expected previously.

AUD/USD: Neutral: Pull-back has scope to extend lower to 0.7460.

The unexpected sharp drop in AUD touched a low of 0.7494 yesterday. Despite the strong bounce from the low, the undertone is still weak and the pull-back has scope to extend further to 0.7460. At this stage, a clear break below this level is not expected. Overall, AUD is expected to stay under pressure unless it can reclaim 0.7630 within the next few days.

NZD/USD: Neutral: Pull-back could extend lower to 0.7250.

The unexpected sharp pull-back from the high of 0.7485 last week appears incomplete. Further down-move seems likely but at this stage, any decline is not expected to move significantly below 0.7250. Resistance is at 0.7380 but only a move above 0.7415 would indicate that the current downward pressure has eased.

USD/JPY: Neutral: In a 100.80/103.20 range.

USD rose strongly to a high of 103.05 last Friday before dropping rapidly to current level. The choppy swings have resulted in a mixed outlook and for now, we continue to hold a neutral stance for USD and expect further choppy trading, likely within a broad 100.80/103.20 range.

EUR/USD: Neutral: In a 1.1150/1.1330 range.

Despite the generally strong USD performance elsewhere, EUR traded within a relatively narrow range of 1.1200/1.1259 yesterday. At this stage, there is no reason to change our neutral view even though the bias is for EUR to move lower to test 1.1150 first (the low end of our expected 1.1150/1.1330 sideway trading range)

GBP/USD: Shift from neutral to bearish: Target a move to 1.3060.

The sudden break below 1.3200 (minor trend-line support) coupled with the weak daily closing suggests the start of a sustained down-move in GBP. The immediate target is for a move to the late August low of 1.3060. On the upside, 1.3260 is likely strong enough to hold any short-term rebound but only a break above 1.3340 would indicate that our bearish expectation is wrong

AUD/USD: Shift from neutral to bearish: Decline over-extended but room for further extension to 0.7420.

The anticipated weakness in AUD expected our expectation by easily taking out the 0.7460 support (overnight low of 0.7443). While the outlook has shifted to bearish, the rapid decline that started late last week appears to be overextended. That said, further extension to 0.7420 would not be surprising. In order to maintain the current momentum, short-term rebound should not move back above 0.7560 even though 0.7510 is already a strong short-term resistance.

NZD/USD: Shift from neutral to bearish: Downside likely limited to 0.7200.

While we anticipated a deeper pull-back to 0.7250, the rapid pace of the decline was unexpected (overnight low of 0.7235). The neutral outlook has shifted to bearish but in view of the sharp drop over the past few trading days, any further down-move is expected to encounter solid support at 0.7200/05, the low in late August. Overall, only a move above 0.7340 would indicate that the current bearish phase in NZD has ended.

USD/JPY: Neutral: Bullish if daily closing above 103.30.

While the undertone for USD has improved considerably, we prefer to see a daily closing above 103.30 (trend-line resistance) before turning bullish. This appears to be a likely scenario unless there is a move back below 102.00 in the next few days.

EUR/USD: Neutral: In a 1.1150/1.1330 range.

EUR continues to trade listlessly and the neutral phase that started early last week is still intact. We continue to expect EUR to trade sideways from here, likely within a 1.1150/1.1330 range.

GBP/USD: Bearish: Target a move to 1.3060.

While the recent strong downward momentum is dented with the strong rebound from a low of 1.3139 yesterday, the outlook for GBP for the next couple of weeks is still deemed as bearish (we just turned bearish yesterday). The immediate target and stop-loss are unchanged at 1.3060 and 1.3340 for now.

AUD/USD: Bearish: Decline over-extended but room for further extension to 0.7420.

As highlighted yesterday, despite the over-extended downmove, the current weakness in AUD has room to extend further to 0.7420 (the next support is close-by at 0.7390). 

NZD/USD: Bearish: Downside likely limited to 0.7200.

While we turned bearish NZD yesterday, we were of the view that the downside potential is likely limited to 0.7200 (low in late August). On the upside, 0.7305 is a strong resistance ahead of the stops at 0.7340.

USD/JPY:  Neutral: In a 101.20/103.30 range.

As highlighted yesterday, despite the positive undertone, USD has to close above the 103.30 resistance before further up-move can be expected. The build-up in momentum fizzled out quickly with the sharp drop from the high of 103.34. The outlook from here is still viewed as neutral but USD has likely moved back into a broad sideway trading range of 101.20/103.30.

EUR/USD: Neutral: In a 1.1150/1.1330 range.

EUR continues to trade listlessly and the neutral phase that started early last week is still intact. We continue to expect EUR to trade sideways from here, likely within a 1.1150/1.1330 range.

GBP/USD: Bearish: Target a move to 1.3060.

While the recent strong downward momentum is dented with the strong rebound from a low of 1.3139 yesterday, the outlook for GBP for the next couple of weeks is still deemed as bearish (we just turned bearish yesterday). The immediate target and stop-loss are unchanged at 1.3060 and 1.3340 for now.

AUD/USD: Bearish: Decline over-extended but room for further extension to 0.7420.

As highlighted yesterday, despite the over-extended downmove, the current weakness in AUD has room to extend further to 0.7420 (the next support is close-by at 0.7390). 

NZD/USD: Bearish: Downside likely limited to 0.7200.

While we turned bearish NZD yesterday, we were of the view that the downside potential is likely limited to 0.7200 (low in late August). On the upside, 0.7305 is a strong resistance ahead of the stops at 0.7340.

USD/JPY:  Neutral: In a 101.20/103.30 range.

As highlighted yesterday, despite the positive undertone, USD has to close above the 103.30 resistance before further up-move can be expected. The build-up in momentum fizzled out quickly with the sharp drop from the high of 103.34. The outlook from here is still viewed as neutral but USD has likely moved back into a broad sideway trading range of 101.20/103.30.

EUR/USD: Shift from neutral to bearish: Expect solid support at 1.1100.

The unexpected sharp drop last Friday coupled the weak daily and weekly closing has shifted the outlook for EUR to bearish. That said, the price action seems to be similar to that in late August where the sharp decline in a single day extended lower but the down-move was quickly reversed a few days later. From here, we expect any weakness in EUR to encounter solid support at 1.1100. In order to maintain the current bearish momentum, any short-term rebound should not move above 1.1240 (1.1200 is already a strong shortterm resistance).

GBP/USD: Bearish: Oversold but room for extension to 1.2930.

The 1.3060 target that was first highlighted last Wednesday (14/9/16) was exceeded as GBP plunged to a low of 1.2996 on Friday. The down-move is clearly oversold but impulsive downward momentum suggests that the current decline could extend further to 1.2930. Strong resistance is at 1.3100 but only a break of 1.3170 would indicate that the bearish phase has ended.

AUD/USD: Bearish: Diminished odds for extension to lower.

After dropping to a low of 0.7443 last Tuesday (13/9/16), AUD has rebounded and traded mostly sideways. Downward momentum has eased and unless AUD can move clearly below 0.7460 within these 1 to 2 days, the odds for the current bearish phase to extend lower to 0.7420 would diminish quickly.

USD/JPY: Neutral: In a 101.20/103.30 range. [No change in view]

The neutral phase that started last Wednesday (7/9//16) is still intact as USD continues to choppily within a broad range. We prefer to stay neutral for now and expect further choppy sideway trading in the coming days, likely within a broad 101.20/103.30 range.

EUR/USD: Bearish: Expect solid support at 1.1100.

We turned bearish EUR yesterday but indicated that any decline is expected to encounter solid support at 1.1100. In other words, the downside potential appears to be limited. That said, the outlook for EUR is deemed as bearish until there is a break above 1.1240.

GBP/USD: Bearish: Oversold but room for extension to 1.2930. [No change in view]

The 1.3060 target that was first highlighted last Wednesday (14/9/16) was exceeded as GBP plunged to a low of 1.2996 on Friday. The down-move is clearly oversold but impulsive downward momentum suggests that the current decline could extend further to 1.2930. Strong resistance is at 1.3100 but only a break of 1.3170 would indicate that the bearish phase has ended.

AUD/USD: Shift from bearish to neutral: In a 0.7440/0.7630 range.

The breach of 0.7560 indicates that the bearish phase has ended. The outlook for AUD in the next few weeks is deemed as neutral and we expect this pair to trade sideways within a 0.7440/0.7630 range.

USD/JPY: Neutral: In a 101.20/103.30 range.

After dipping to a low of 101.18 about 2 weeks ago, USD has been trading mostly sideways since then. There is no change to our current neutral view and we continue to expect this pair to trade within a broad 101.20/103.30 range.

EUR/USD: Bearish: Expect solid support at 1.1100.

There is not much to add as EUR spiked to a high of 1.1213 yesterday but eased off quickly to end near the day’s low. The outlook is still bearish but as highlighted in recent updates, any decline is expected to encounter solid support at 1.1100. 

GBP/USD: Bearish: To take partial profit at 1.2930.

GBP extended its decline to touch a low of 1.2947 yesterday. As highlighted in recent updates, while the recent drop is clearly oversold, the down-move appears to have scope to extend lower to 1.2930. This is a strong support level and those who are short may likely to take partial profit here. 

AUD/USD: Neutral: In a 0.7440/0.7630 range.

We shifted from a bearish to neutral stance on AUD yesterday and there is no change to the view. The current movement is viewed as part of a consolidation phase and AUD is expected to trade within a broad 0.7440/0.7630 range for now.

NZD/USD: Shift from bearish to neutral: In a 0.7240/0.7380 range.

The breach of 0.7340 indicates that the recent bearish phase has ended. The outlook for NZD from here is unclear and we prefer to hold a neutral view and expect this pair to trade listlessly between 0.7240 and 0.7380. Looking further ahead, the downside appears to be more vulnerable but a sustained weakness is likely only if there is a break below the very strong 0.7220/40 support zone.

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

EUR dipped to a low of 1.1119 yesterday but rebounded quickly. While the outlook is still deemed as bearish, the odds for further EUR weakness have diminished. From here, unless EUR can move and stay below 1.1120 within these 1 to 2 days, a break above the current stop-loss at 1.1240 would not be surprising.*

GBP/USD: Bearish: Risk of a short-term low, to take partial level at current level.

Shorter-term momentum is waning rapidly and this coupled with oversold conditions has increased the risk of a shortterm low. Those who are short from last week should consider taking partial profit at current level. 

AUD/USD; Neutral: Bullish if daily closing above 0.7675.

The continuing AUD strength is unexpected and upward momentum has picked up considerably. However, we prefer to wait for a daily closing above 0.7675 before turning bullish (targeting a break above the early-September high of 0.7730/35). Overall, the current upward pressure would continue to grow unless there is a move back below 0.7535

NZD/USD: Neutral: Rebound could extend towards 0.7485.

The rebound from last week’s 0.7235 low has been more robust and resilient than expected. While the near-term outlook is deemed as neutral, the current recovery could extend higher to test the 0.7485 high seen earlier this month (0.7410 is acting as a strong intervening resistance). At this stage, a sustained move above this level appears unlikely. Overall, the current positive undertone for NZD is intact unless there is a move back below 0.7280 within the next few days.

EUR/USD: Shift from bearish to neutral: In a 1.1120/1.1290 range.

The breach of 1.1240 yesterday has shifted the outlook for EUR to neutral. The lack of a sustained down-move was not surprising as we have indicated previously that any weakness is likely limited to 1.1100 (low was 1.1119 on Wednesday). We are neutral now and expect EUR to trade in a broad 1.1120/1.1290 range for the next couple of weeks

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

We highlighted the rapidly waning momentum yesterday and advocated shorts to book some profit at 1.3035. Subsequently, GBP rallied strongly and edged 1 pip above our stop-loss at 1.3120 (overnight high of 1.3121). From here, the risk of a short-term low would continue to increase and a clear break above 1.3120 would not be surprising (unless GBP can move and stay below 1.3035 within the next 1 to 2 days)

AUD/USD: Neutral: Bullish if daily closing above 0.7675

While the rebound from last week’s 0.7443 low has been more robust and resilient than expected, we prefer to wait for a daily closing above 0.7675 before turning bullish. A clear break above this level would indicate that AUD has started on a move towards the major 0.7740/60 resistance zone. Based on the strong shorter-term momentum indicators, a move above 0.7675 would not be surprising. Only a move back below 0.7560 would indicate that the immediate upward pressure has eased.

NZD/USD: Neutral: In a 0.7240/0.7380 range.

The build-up in upward momentum fizzled out quickly as NZD dropped sharply after touching a high of 0.7374 yesterday. The expectation for the recent rebound to extend further to 0.7485 is premature and NZD has likely slipped back into a sideway trading range, likely between 0.7240 and 0.7380.

 USD/JPY Bearish: Extremely oversold but room for extension to 99.50/55.

While the outlook for USD turned bearish yesterday, the down-move is extremely oversold. However, further extension to 99.50/55 cannot be ruled out. Only a move back above 101.50 would indicate that a short-term low is in place.