EUR/USD
Yesterday’s trading saw EUR/USD sentiment deteriorate modestly following Tuesday’s strong gains. Investors are cautious with prices trading close to March’s 2 ½ year high at 1.3967 and daily signals are overstretched. Although the pullback hasn’t provided a sell signal, it has weakened sentiment and the Dollar Index is holding at the neckline to a Head & Shoulders pattern.
Dips should be temporary though and the outlook for Thursday is to sell on the open and at 1.3934, with a stop loss at 1.3967, this year’s top.
Targets are to 1.3900, 1.3864, this week’s low and then 1.3812, Friday’s base.
USD/CHF
Yesterday’s trading saw USD/CHF sentiment improve modestly following Tuesday’s strong losses. Investors are cautious with prices trading close to 2 ½ year lows and daily signals are oversold. Although the recovery hasn’t provided a buy signal, it has improved sentiment and the Dollar Index is holding at the neckline to a Head & Shoulders pattern.
Rallies should be temporary though and the outlook for Thursday is to buy on the open and at .8743, yesterday’s open, with a stop loss at .8721, this week’s low.
Targets are to .8777, .8805, the 13 day average and .8843, Friday’s top.
AUD/USD
While bullish signals for Tuesday and on the week have been confirmed, yesterday’s signals for the AUD/USD highlighted the potential for sentiment to consolidate ahead of the 2 week high at 0.9380. This is exactly what occurred, as a relatively small 38 pip range saw sentiment trade inside Tuesday’s range for a modest down-day.
However, renewed buying in Asia this morning has returned signals to pointing higher, but with intraday sentiment overstretched, the outlook for Thursday is to buy on the open and at .9340, with a stop loss at .9318, yesterday’s low.
Targets are to .9375, .9400 and .9427, the 3 week top.