In a technical note to clients, Credit Suisse outlines the technical setups for targeting the bounces in GBP/USD and EUR/USD along with its current trading positions in the two pairs.
GBP/USD has found some stability on approach to trendline/55-day average and 50% retracement levels at 1.5065/32 and has bounced since then, notes Credit Suisse.
"Resistance shows at 1.5294/5304, but above 1.5398 is needed to aim at 1.5499. Above here would find our core recovery target at 1.5555/69 – the February high and 38.2% retracement of the entire 2014/2015 bear trend," CS projects.
"However, while capped below 1.5294/5304, attention can remain on support. Removal of 1.5032 is needed for a deeper fall to 1.4922 ahead of the 1.4856 pivot low. Only below here would see a retest of the 1.4565 April low," CS argues.
In line with this view, CS maintains a long GBP/USD position from 1.5125, with a stop at 1.5030, and a target at 1.5480.
Turning to EUR/USD, CS notes that it reversed early selling yesterday to bounce back to fresh recovery highs after breaking above 1.1292 – the 23.6% retracement of the 2014/15 fall.
"We would expect selling to show here, but above it can target 1.1389 next, then 1.1450, with a bigger barrier seen at 1.1534. Bigger picture, we would not rule out a move to 1.1808/11," CS projects.
"Support shows at 1.1109, followed by 1.1066/65 and then 1.1030. Below the latter is needed to see scope for 1.0972/60, through which can ease the topside risk, for 1.0916/06," CS adds.
In line with this view, CS maintains a long EUR/USD position from around 1.1105, with a stop below 1.0960, and a target at 1.1445.
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