The summer markets imply that exaggerating moves might be seen in forex, notes Steven Woodcock, Senior FX Analyst at Plutus FX, as he joins Tip TV to share the outlook for EUR/GBP, USD/JPY, USD/CAD, USD/CHF and Gold.
EUR/GBP seeing a relief rally
Woodcock maintains his positive outlook on the cross, expecting a continuation of the rally towards 0.7250-0.7260 area, with a possibility of gains towards the 0.75-0.76 levels. He says that the current move is not part of an uptrend but a relief rally, with the cross being purely event driven. He further expects sellers to push the cross lower from the 0.75-0.76 area.
USD/JPY starting to pullback
Woodcock looks at the charts for USD/JPY, and notes that the pair had reached the first target area above 125 a couple of times and is starting to pullback lower. On the downside target, Woodcock believes that a move towards 118.50 might be possible, but initial targets remain at 122 and then 120. Yen has taken over as a safe haven buy versus other currencies, and event risk is driving the USD/JPY cross lower.
USD/CAD consolidation ahead?
Woodcock takes a look at USD/CAD, noting that the cross remains reactive to move in oil prices. On the outlook, he believes that the pair remains in a range and consolidation might be expected. A pullback towards 128.20 area might be seen ahead, according to Woodcock.
USD/CHF: Looks heavy
On USD/CHF, Woodcock believes that the cross will remain data dependant (USD-wise) and currently looks heavy. He favours a pullback towards the 0.92 area, but warns that the summer markets will result in exaggerating moves.
Gold: More upside ahead?
Gold charts show that the price action is nearing two trend lines converging around the 1150 area, clearing this might see an upside push towards the 1165-1170 level. Rastani believes that he would be surprised if the previous low on Gold was a bottom, and a move towards $1000 might be seen ahead.
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