Steven Woodcock, Senior FX Analyst for PlutusFX, offers the outlook GBP/USD, EUR/GBP and USD/JPY.
GBP/USD: No clear price direction
Woodcock sees no clear price direction in the GBP/USD, but maintains a downside bias on the cross. He further explains how the cross has been reacting to moves in EUR/GBP, and expects a break from its 1.56 – 1.55 range, to decide the next leg for the pair.
GBP/CAD, GBP/JPY: Trapped
Woodcock sees the GBP crosses rapped on the top-end of their rallies. He further expects GBP/JPY to trend higher after seeing some pullback.
EUR/GBP seeing a small bid
Long-term forecast for EUR/GBP is to resume downtrend, but some near-term bid might be seen in the cross as EUR trades firm. Woodcock says that the cross saw a bounce as it held the support area around 0.6940. A lot of cross play is seen due to the EUR, and EUR/GBP might be in for some upside. A move towards 0.7650 might also be on the cards. The pair currently remains in a consolidative phase.
USD/JPY: Buy any pullbacks
Woodcock sees USD/JPY turning over, and sees probability of a pullback towards 122-122.50 area, and even 118 level. USD/JPY bulls needs a move above 124.50, with sellers just above the 124.00 level. Fundamentally, Yen will remain weak, hence Woodcock looks to buy any pullbacks on the cross. The long-term target for the cross stands at 140.
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