EUR/USD: Bearish: Diminished odds for further EUR weakness.
The bearish phase that started last week is struggling to maintain its momentum. The major support at 1.0538 (low in 2015) is still intact as EUR consolidates after touching a low of 1.0567 last Friday. Indicators are clearly oversold and further consolidation above 1.0535/40 would lead to a rapid loss in downward momentum and diminish the odds for further EUR weakness. However, as long as 1.0700 is intact, the outlook for this pair is still deemed as bearish but we really need to see a break lower soon or the risk of a short-term low would increase quickly.
GBP/USD: Neutral: Back in a 1.2300/1.2600 range.
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: Bearish: Increasing risk of a short-term low.
The bearish phase that started last Monday appears to be close to ending. The rebound from the low of 0.7311 has been more resilient than expected and from here, a move above 0.7430 would indicate that AUD has entered a neutral consolidation phase (likely within a broad 0.7320/0.7510 range).
NZD/USD: Bearish: Increasing risk of a short-term low. [No change in view]
NZD registered a bullish reversal bar yesterday and this clearly indicates that the risk of a short-term low has increased. A move above 0.7100 would indicate that the bearish phase that started early last week has ended. This appears to be a likely scenario unless NZD can move below the very strong 0.6980/85 support within these 1 to 2 days. Note that we have advocated taking partial profit at 0.7035 previously.
USD/JPY: Bullish: 111.45 next target.
While the bullish outlook for USD is still intact, the recent strong rally appears to be struggling to move above the strong 111.45 resistance. In order to maintain its bullish momentum, USD has to break clearly above this level within these 1 to 2 days. A prolonged consolidation below this level would lead to a rapid loss in momentum which would increase the odds for a short-term top.