Forex Institutional Research: Credit Suisse FX Daily
Key quotes from the Credit Suisse FX report:
The immediate risk stays lower for 1.1144, followed by a stronger support at 1.1100/1058. EURUSD remains in a consolidation range, leaving the immediate outlook unchanged. Whilst still capped beneath trendline resistance and a cluster of moving average now at 1.1284/301, the immediate risk can stay lower for a retest of 1.1180/79 initially, through which can target 1.1144. Beneath the latter is needed to then challenge what should prove to be more solid support at 1.1102/1058 – the 200- day average, 50% retracement level and price support. Resistance shows initially at 1.1244/56, then 1.1297/301. Above the latter is needed to see a recover for 1.1349/59 which we look to cap. Strategy: Short at 1.1199, stop above 1.1256 for 1.1100
The focus turns to 1.4403/4396 which we look to ideally hold to maintain the topside bias. GBPUSD has extended its decline, leaving the immediate focus onto price support at 1.4403/4396. Whilst this holds, the immediate risk can stay higher for now towards 1.4549/51 initially, followed by 1.4615/38. Above is needed to target the recent high and 78.6% retracement barrier at 1.4664/77 next. An extension through the latter can then aim at major resistance at 1.4771/80 – the trendline from the 2008 low, the May 2016 high and 200-day average – where we would look for this area to try and cap initially. Below 1.4403/4396 is needed to retest the 55-day average at 1.4359, below which can target key support at 1.4303/4299. Strategy: Long at 1.4480, stop below 1.4403 for 1.4745
The focus turns towards price support at 108.72/64. USDJPY has extended its rejection from price resistance and falling 55-day average now at 110.24/67. This keeps the focus lower for a test of 108.72/64 at fitst, beneath which is needed to turn the risk lower for a more important support at 108.22 where fresh buying is expected to show. A direct capitulation here though can warn of further downside for 107.50/40, followed by 106.43. Immediate resistance moves to 109.68, followed by 109.95. Above 110.24/67 is needed to turn the trend higher for 111.03 initially, ahead of the late April high and 38.2% retracement at 111.71/92. We would look for this zone to ideally cap to maintain the broader downside bias. Strategy: Short at 109.90, stop above 110.70 for 105.90.
Below .7176 can reinforce the downside risk for a challenge of the late February lows at .7109. AUDUSD was unable to sustain its early strength and has turned back lower in its range. This keeps the immediate risk lower for a retest of the recent low at .7176 initially, then the late February lows at .7109. We would expect fresh buying to emerge for a bounce here but a direct break lower can suggest more weakness for .7069/64, then .6973. Resistance moves to .7261 at first, above which is needed to see scope for .7299/311 and then .7334. Strategy: Short at .7330, stop above .7405 for .7120.
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