EUR/USD: Shift from neutral to bearish: target a move to monthly trendline support at 1.0190.

As noted yesterday, a breach of the major 1.0455/60 support (2015 low) would indicate that EUR has entered a bearish phase. The decline yesterday is accompanied by strong downward momentum as we witnessed a rapid drop to an overnight low of 1.0364. Overall, the outlook for EUR appears to be bleak in the coming weeks as the next significant support is much further down at 1.0190 (rising trend-line on the monthly chart). Any short-term rebound is expected to stay below 1.0570.

GBP/USD: Shift from neutral to bearish: Target 1.2300/05.

As highlighted yesterday, a breach of 1.2480 would shift the outlook for GBP to bearish. The immediate target is at 1.2300 followed 1.2250.

AUD/USD: Neutral: Bearish if clearly below 0.7310.

While the strong support at 0.7350 was breached, the downward momentum is not as strong as preferred and we are still reluctant to adopt a bearish stance for now. Last month’s low near 0.7310 is acting as a major support and only a clear break below this level would shift the outlook to bearish (with an immediate 0.7205). Overall, AUD is expected to stay under pressure in the near term unless it can reclaim 0.7450 within these few days.

NZD/USD: Neutral: Bearish if clearly below 0.6970.

Similar to AUD/USD, we prefer to wait for a clear break below last month’s 0.6970 low before adopting a bearish NZD stance. However, this pair is expected to stay under pressure unless it can move and stay above 0.7110.

USD/JPY: Bullish: Focus on 119.00, 120.00 next.

We just shifted to a bullish USD stance yesterday and there is no change to the view. Despite overbought conditions, USD continues to march higher and the immediate target at 118.30 was easily exceeded. From here, the focus is at 119.00 and 120.00.