EUR/USD: Bullish (since 19 Jul 17, 1.1550): 1.1615 target exceeded, focus on 1.1710 next.
When we shifted to a bullish stance on Wednesday, we were of the view that the rally in EUR is ‘over-extended’ and expected the 2016 peak of 1.1615 to offer solid resistance. With the help of ECB, EUR surmounted this level without much difficulty and the focus has shifted to the Aug 2015 high of 1.1710.
GBP/USD: Shift from bearish to NEUTRAL: In a 1.2870/1.3050 range.
Our recent bullish expectation was proven wrong as GBP cracked the 1.3000 stop-loss to hit a low of 1.2933. The outlook has shifted to neutral and this pair has likely moved into a consolidation phase. That said, the immediate bias for the next few days is tilted to the downside but at this stage, a sustained break below the expected 1.2870/1.3060 consolidation range is not expected.
NZD/USD: Neutral (since 13 Jul 17, 0.7250): Bullish only if NY closing is above 0.7405.
We have been holding the same view for the past few days wherein only a NY closing above 0.7405 would indicate that NZD has moved into a bullish phase. The close yesterday was just a few pips lower at 0.7398 and the condition is not met. That said, upward momentum is picking up strongly and a shift to a bullish phase would not be surprising as long as the key short-term support at 0.7330 is intact. On a shorter-term note, 0.7365 is already a strong support.
USD/JPY: Neutral (since 13 Jul 17, 113.25): Immediate downward pressure to 111.00. No change in view, see update from yesterday below.
There is not much to add as USD hit a low of 111.53 yesterday before recovering quickly. As indicated yesterday, the immediate pressure is on the downside but at this stage, we do not envisage a sustained move below 111.00. Overall, this pair is expected to stay under pressure unless it can move and stay above 112.50.
Source: United Overseas Bank Global Economics & Markets Research
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