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FX Snapshot

While today’s session is relatively calmer, and the euro is holding on to much of the ground gained yesterday, the atmosphere in forex markets still remains febrile, as the clock ticks down to the expiry of Greece’s bailout. 

GBP/USD
Source: Bloomberg

GBP/USD continues to bounce
Cable has spent the past five days bouncing around $1.57, showing no real desire to move below this key level. This has stalled the pullback that begun when the pair failed to take out $1.59; the longer we continue to hold above $1.57, the more I am inclined to the view we will see a continuation of the upward trend that has prevailed since mid-April.

So far, cable has shown little inclination to move above $1.58 either, so this is the upside level to watch for the time being. Once we break this upside level (if we do), the targets to watch will be $1.59 and then $1.6050. A dip below $1.57 would still mean we are on course to retest the rising trendline off the previously-mentioned April lows, around $1.5550.

The hourly-chart has seen another bounce off $1.57, so the intraday target lies around the 200-hour simple moving average ($1.5780), which also coincides nicely with yesterday’s highs.

GBP/USD

EUR/USD looking to continue strongly
Although down this morning, EUR/USD has held up well in the wake of yesterday’s impressive bounce. Indeed, the move has been so strong that there is reason to believe that bullish momentum will continue if we can close above $1.12 in coming sessions. For now the 50-day SMA at $1.1168 is providing good support, so if the euro can muster the strength to rally, the upside looks good – with a run at $1.14 on the cards.

A more extended downward move would test the lows seen on Monday, around $1.10, with further declines heading towards support in the region of $1.08.

EUR/USD

AUD/USD looks strong in the short-term
Having lifted itself from the session lows yesterday, AUD/USD has continued the upward move. Admittedly, it still looks like a short-term bounce as part of a downtrend, with another test of $0.76 on the cards if the dollar finds new strength, but a close above $0.77 would incline me to believe that the downward move has run its course.

Hourly stochastics are on the verge of giving a bullish crossover, and with $0.7660 having provided support we could see an attempt to break yesterday’s highs around $0.7710 and move on to test the 200-hour SMA at $0.7727.

AUD/USD

USD/JPY appears to favour the bears
This pair has failed to move higher following yesterday’s session, and now it is testing Y122. Daily stochastics have turned bearish, so intraday rallies towards Y122.50 are there to be sold. The 50-day SMA at Y121.88 may provide some support to stem the downside, but otherwise we are looking at a move towards the 100-day SMA at Y120.84. 

USD/JPY

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