US dollar weakness remains the key here, as speculation about US interest rates abates for a time. 

Euro and US dollar notes
Source: Bloomberg

GBP/USD eyes $1.59

Despite the Bank of England dropping increasingly large hints about a rate hike in coming months, the pound has found it difficult to push beyond $1.5650 in recent sessions. While stochastics are still bullish on the daily chart, GBP/USD still needs to push through the highs we saw last week to confirm that bullish momentum is still in evidence. If we can clear those recent highs then the mid-June target around $1.59 comes back into play, while a turn lower as momentum fades would push the pair in the direction of $1.5460, and then on to $1.52. 

EUR/USD outlook remains bullish

This pair remains constrained by the $1.0950 area, although the outlook still looks reasonably bullish, with the bounce from near to $1.08 still intact. Yesterday’s intraday dip was furiously bought, lending credence to the idea that this is a buy on weakness market, reinforced by continued bullishness in daily stochastics. A daily close above $1.0950 would give us the scope to move towards $1.10 and thence on to the month’s high around $1.1220. 

AUD/USD still rangebound

Tight rangebound trading continues here, although $0.7350 continues to stem any major downside moves. Bulls may just about have the edge, but I would remain sceptical until we see any move above $0.7450. Daily stochastics continue to give some advantage to buyers, but it is important to remember that any bounce will be part of a longer-term downtrend and thus relatively short in duration.

USD/JPY continues to battle

The tussle for ¥124 goes on, with little end in sight so far, but the longer the dollar bulls fail to sustain their hold on this level, the more it seems that we will see a fresh push lower. Certainly daily stochastics are rolling over, and a push through yesterday’s lows just above ¥123.50 could ignite a significant move to the downside, with first support coming in around the 50-DMA at ¥123.12. 

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