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EUR/USD, GBP/USD: Next Targets - SocGen After achieving the upper limit of an ascending channel earlier this month, EUR/USD has been showing a retracement. Weekly indicator is close to a resistance which suggests ongoing rebound since December seems to be running out of steam and upside is likely to remain capped.
Currently the pair is close to January highs of 1.10/1.0950 which also corresponds with the 61.8% retracement from mid-January lows and the lower limit of aforementioned channel within which the recovery has evolved. More importantly this is the 20 week EMA and the weekly descending trend. With daily RSI breaching a support line, continuation in correction can’t be ruled out.
A violation of 1.10/1.0950 will confirm a retest of late January lows at 1.08. 1.1150 will be an immediate resistance.
GBP/USD hit and rejected the multiyear channel limit near 1.46 and is now probing January lows. It is approaching towards projection for the c wave at 1.3950. It has confirmed a short term H&S which suggests possibility of further down move.
Weekly stochastic is still above a graphical floor however a move above 1.46 will be needed for sustainable rebound.
2009 lows at 1.36/1.35 is next significant support zone.
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Trade Ideas: EUR/USD, USD/JPY, GBP/USD, AUD/USD, NZD/USD, USD/CAD - UBS EUR/USD: The heavy tone from last week remains intact and the pair dipped below 1.10 yesterday. We don't see many reasons to play EURUSD from the long side, apart from the fact it is running into some very decent support. The pair tested 1.0950/80 seven or eight times after the beginning of the year before breaking higher, so this will now act as a support zone.
USD/JPY: Yen crosses remain under pressure, particularly GBPJPY and EURJPY, and with risk sentiment negative USDJPY has followed them lower. We have seen good two-way USDJPY interest, with buying on dips, but the market is nervous given that the pair is so close to the recent multi-year low of 110.98. Look to sell USDJPY and yen crosses on rallies.
GBP/USD: Brexit fears have dominated price action. Flows are mostly biased to sell and the market is very illiquid and transactional, so the pair could head even lower once more market participants start unloading. Wait for a catch-up to sell Cable at a better level, as the latest move seems overdone.
AUD/USD: didn't follow-through after breaking above 0.7245 yesterday. The pair has come under pressure today on the back of negative risk sentiment. Range trading has resumed with an underlying uptrend. Stick to buying on dips, ideally closer to 0.7100, with a stop at 0.7025.
NZD/USD: ran out of momentum around 0.6720 and has slipped down today. The pair is now testing the lower end of its recent trading range. We prefer buying into this dip between 0.6610 and 0.6650, with a stop below 0.6500.
USD/CAD: Stick to playing the pair from the short side, with a tight stop through 1.3860, in order to remain flexible in case there is a bigger correction following the recent selloff.
GBP/USD: Drivers & Targets - Morgan Stanley Currently, there are three types of flows at play for GBP that could extend the current decline, says Morgan Stanley.
"First, since last Sunday evening, the shock factor that there could be a strong "Leave" campaign, increasing the probabilities of Brexit, pushed the initial leg down for GBPUSD. This type of 'shock' flow will likely extend a few more days as investors globally reconsider their Brexit-elated trading strategies. Our positioning tracker suggests that markets we real ready short GBP going into the weekend.
The second flow is based on the asset holders in the UK, never really having considered putting on tail risk hedge trades as an overlay in their portfolio, may use the currency as an easier (dueto its liquidity) and potentially cheaper way to hedge the risk. We are not just talking about the foreign investors here; GBP-based funds that are worried about potential equity market declines may also overlay with short GBPUSD positions.
Third, as GBPUSD declines rapidly and markets expect further declines, long-term foreign investors may start to hedge their currency risk, adding to further downward pressure. Remember that foreign investors had piled into gilts last year (GBP60bn in 2015) and FDI remained strong (GBP84bn in the year to September 2015). In particular, sovereign wealth funds were large investors into the UK’s real estate market over recent years too," MS clarifies.
"We remain bearish on GBPUSD and see 1.3650 and 1.3500 as the next two areas of support," MS advises.
Setups: EUR/USD, USD/JPY,GBP/USD, USD/CHF, AUD/USD, NZD/USD - Barclays The following are the latest technical setups for EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, and NZD/USD as provided by the technical strategy team at Barclays Capital.
EUR/USD: No change. Nearby resistance in the 1.1050 area (200-dma) helps provide selling interest for a move lower. We are looking for a move towards initial targets near 1.0850 and then the 1.0710 range lows.
USD/JPY: Wednesday’s small basing candle signals profit taking on JPY longs. We would prefer to fade upticks within context of the broader bearish trend. Selling interest is expected in the 115.05 area. A move below 110.95 would endorse our bearish view towards our initial targets near 110.35/05.
GBP/USD: We look for a move below nearby support in the 1.3850 area to encourage our bearish view. Our targets are towards 1.3500, near the 2009 range lows.
USD/CHF: We are neutral for now. A close below 0.9875 would encourage us to venture bearish in the short-term for a move lower in range towards 0.9760, the 200-dma. A break above 1.0005 would however point to resumption of the February rally towards 1.0130 and then the 1.0260 highs.
AUD/USD: We look for resistance near 0.7270, the 200-dma to cap upticks and help keep our bearish view. A move below initial targets near 0.7070 would point lower towards 0.6970 and then the year-to-date lows near 0.6825.
NZD/USD:No change. We are bearish against the 0.6755 area and look for a move towards targets near 0.6415 and then the 0.6345 lows.
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Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB EUR/USD: Turn to Bearish: Outlook turned bearish for a modest target of 1.0810.
The neutral phase that has been in place for about 2 weeks ended last Friday. As highlighted in recent updates, a daily closing below the key 1.0990 would indicate the start of a sustained down-move in EUR.
That said, downward momentum is not very strong at this stage and we have a modest target of 1.0810. In order to maintain the current momentum, any rebound should not move above 1.1030.
GBP/USD: Bearish: Extension to 1.3800 not ruled out but odds are not high.
GBP eked out a fresh low of 1.3854 last Friday and as pointed out recently, severely oversold conditions coupled with slowing downward momentum suggest low of odds of extension lower to 1.3800 (partial profit taken at 1.3930).
However, confirmation of a short-term low is only upon a move back above 1.4040 (adjusted lower from 1.4075).
AUD/USD: Neutral; pull-back could extend to 0.7065, 0.7030.
The failure to break above the major 0.7260 resistance coupled with the move below the key 0.7130 support indicates that the bullish phase in AUD has ended without meeting the 0.7325/30 target. While the outlook is viewed as neutral now, the current movement is likely the early stages of a pull-back which has room to move lower to 0.7065 with a chance of extending to 0.7030.
From here, AUD has to move clearly below 0.7030 to indicate the start of a fresh bearish phase towards 0.6825/30. Resistance is at 0.7185 followed by the now very strong and key level of 0.7260.
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GBP/NZD is in a descending way. If it follows downwards an it can be an interesting but quite profitable trading opportunity:
Sell at: 2.0960
Target at: 2.0630
Stop at: 2.1120
What do you think? I am goin to widen the stop loss a bit more.
EUR/USD: Drivers & Targets - Deutsche Bank EUR/USD has been range-bound over the last few months but we continue to believe the range is likely to break to the downside.
The drivers behind euro weakness remain familiar themes: risks of additional large-scale easing from the ECB and huge portfolio outflows driven by reserve manager losses as well as European portfolio re-allocation abroad.
Two additional bearish EUR/USD factors have emerged since the start of the year: weakening growth momentum driven by rising external headwinds and European financials volatility; as well as rising geopolitical risk on the back of the refugee crisis and the Brexit debate.
We continue to forecast a move down to 1.05 by the end of Q1 followed by a move down to parity and beyond over the rest of the year. The most significant risk to our aggressive bearish view is an ECB or Fed disappointment. The former driven by unwillingness to deliver more easing (or its ineffectiveness), the latter driven by unexpected additional weakness in the US economy that prevents any Fed tightening this year.
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB EUR/USD: Bearish: Take partial profit at 1.0810.
While we remain bearish EUR, the price action is in line with our expectation wherein we expect limited downside potential. This pair is struggling to move lower and those who are shorts may want to take partial profit at 1.0810.
Downward momentum continues to wane with the rebound from the overnight low of 1.0832 but it is too early to expect a sustained recovery.
GBP/USD: Bearish: Extension to 1.3800 not ruled out but odds are not high.
The short-term rebound tested but failed to move clearly above the stop-loss for our bearish view at 1.4020 (high of 1.4020). As highlighted in recent updates, momentum has slowed and the odds for the current GBP weakness to extend lower have diminished considerably.
However, confirmation of a short-term low is only upon a move above 1.4020. Until this level is taken out, another leg lower to 1.3800 cannot be ruled out just yet.
AUD/USD: Neutral: Daily closing above 0.7260 would shift outlook to bullish again.
The strong rebound from the low of 0.7110 yesterday was unexpected and accompanied by strong momentum. However, only a clear break (daily closing) above the major 0.7260 resistance would shift the outlook for AUD to bullish again (we turned neutral only 2 days ago).
Overall, AUD is expected to remain supportive unless there is a move back below 0.7110 in the next 1 to 2 days.
NZD/USD: Neutral: short-term weakness likely limited to 0.6500.
There is no change to current neutral view despite the strong recovery yesterday. The undertone for NZD is still negative but at this stage, any further weakness is likely limited to 0.6500.
On the upside, only a move back above 0.6745 would indicate that the downward pressure has eased.
USD/JPY: Neutral: In a broad 111.00/114.50 range now.
USD continues to trade choppily by dropping initially to a low of 112.14 before rocketing higher to close near the day’s high at 114.00. While upward momentum is improving, it is too early to expect a sustained up-move unless there is clear break above the major 114.50 resistance.
In the meanwhile, this pair is expected to be underpinned with solid support at 112.60 ahead of the 112.14 low
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EUR/JPY: Risk-Reward Attractive For Longs - BNPP A notable feature of this year’s FX moves has been the difference in the performances of the EUR and the JPY, notes BNP Paribas.
"While a collapse in the global risk environment in the first six weeks of the year boosted both funding currencies significantly, the JPY gained more. This difference has persisted even since equity markets troughed on 11 February, with the EURJPY cross continuing to fall even as risk appetite improved," BNPP adds.
"We view the disparate performance of the two, structurally similar currencies difficult to justify and think options market pricing and market positioning for a further decline represent an opportunity to position for a recovery in EURJPY," BNPP advises.
Given this, BNPP suggests entering a 3-month zero cost risk reversal, selling a 120 put and buying a 127.55 call (EURJPY spot ref 124.15). The trade is exposed to unlimited downside below 120, but BNPP would look to unwind the recommendation if losses approach 1.5%,"
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB EUR/USD: Change to Neutral: Bearish phase ended quickly. Bullish only if daily close above 1.1005/10.
When we turned bearish on Monday (29 Feb), we had a ‘modest’ downside target of 1.0810. The low has been 1.0823 and the subsequent strong rebound from the low took out the stop-loss at 1.0965.
The outlook is neutral for now but upward momentum is building up and a daily closing above 1.1005/10 would be a strong indication that we are going to see a higher EUR in the coming weeks. In the meanwhile, this pair is expected to be underpinned with support 1.0900 followed by the solid level of 1.0810.
GBP/USD: Neutral: Corrective rebound has scope to extend higher to 1.4230.
The outlook for GBP just turned neutral yesterday and the current movement is viewed as a corrective rebound that has scope to extend higher to 1.4230. The high has been 1.4194 yesterday and strong short-term momentum continues to suggest a higher GBP in the next few days (though may not be sustained).
Support is at 1.4080 but only move back below 1.4000 would indicate that a short-term top is in place. On the upside, the next resistance above 1.4230 is at 1.4300.
NZD/USD: Neutral: 0.6600/0.6775 range for now.
While the undertone for this pair is positive, we prefer to wait for a clear break above the 0.6775 high seen last week before turning bullish.
This appears to be a likely scenario unless NZD moves back below 0.6630 in the next 1 to 2 days. 0.6675 is already a strong support.
AUD/USD: Bullish: Clear break above key 0.7385 resistance is expected to lead to acceleration higher.
AUD just entered a bullish phase yesterday and the rally is quickly approaching the very key level of 0.7385. A clear break above this level is expected to lead to acceleration higher towards 0.7440 and beyond in the days ahead.
Strong support is at 0.7290 but only a move back below 0.7220 would indicate that a short-term top is in place.
USD/JPY: Neutral: In a broad 112.50/114.55 range now.
There is not much to add as USD moved briefly above the top end of our expected 111.00/114.50 range yesterday (high of 114.55).
We remain neutral for now but from here, a clear break out of an expected 112.50/114.50 sideway trading range would indicate the start of a directional move.
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