Currencies - Short-Term Outlook

1.3269

Short-Term Trend

Sideways

Outlook
 
EUR has held firm last week as the 1.3000 level has provided strong support. Now, the daily oscillators are trying to turn up. That's a good thing, so I can say that finally the trending conditions support the wave count I have been following for months here. So, the long side is now favored. A move above 1.3520 will likely bring gains toward 1.3720 before another decline takes place. On the downside, below 1.3050 negates, risks decline toward 1.2870 before another rally attempt is seen.

Strategy

Longs favored here against 1.3050. Target=1.3700.

GBP/USD

1.5866

Short-Term Trend

Sideways

Outlook

A week ago I favored longs in the 1.5800/1.5750 zone against 1.5600. My reasoning was that wave (E) was already under way and gains toward the 1.63/1.64 area were quite possible. Well, the first part of this forecast was correct as GBP declined right into the middle of expected support area (the low last week was near 1.5770). Now, it remains to be seen if the second part of my forecast will be correct. A move above 1.5945 is required to confirm the presented analysis. If that happens, a rally toward 1.63 will become a real possibility.  On the downside, the key support remains near the 1.5600 level.

Strategy

Holding long from 1.5800 is favored. Stop=1.5600. Target=1.6300.

USD/JPY

82.32

Short-Term Trend

Uptrend

Outlook

USD pulled back more than expected but has remained above the 81.80/81.65 key support level. So, the wave count presented on the chart above is still valid. What's more, the prices remain above the rising 21-day moving average which indicates the underlying trend is strong. But firm and sustained break above 83.80 is needed to signal the next leg higher is under way and even in that case, the upside is likely to be limited to the 84.50/85.00 area. On the downside, below 81.65 negates, risks deeper pullback but the 79.50 support is expected to remain intact from here.