We like being long EUR/JPY after last week's slide. While it would seem like EUR/JPY has formed a head & shoulders topping out pattern, we believe bearish conclusions can easily be invalidated over the next 3-8 weeks. For now, keep tabs. Our sense is that won't print anything lower from hereon. We'll know for sure by September.
If you don't want to chase AUDNZD or you're uncomfortable being long AUDUSD, you may want to consider AUDCHF.
Expect brief sideways to down transition for now but as long as dips are shallow, our long term view is that it'll eventually break the midpoint of the range with significant upside risk.
Risk-off phases are often characterised by safe-haven flows running towards CHF and/or JPY. Over the past two years, CHF has provided better upside judging by the way JPY/CHF performed during the period. But having observed the the tight range transition in JPY/CHF this past year, I'm beginning to sense a shift with JPY being the preferred safe-haven of choice....
I'm bearish NZD and the best expression of this view is to go long EURNZD on dips.
I also like long AUDNZD but for now, and possibly for the rest of the year, EURNZD will likely continue to outperform.
Range levels are outlined in very clear terms in the chart. Short NZDs all year long.
$EURAUD has been transitioning into a range the past two years and my sense is that as long as it stays above 1.4609 this year, it can be a potential monster bullish trade in 2018. Right now, $EURNZD is stronger than $AUDNZD and I think this pattern will persist for the remainder of the year and next year. Again, range trade $EURAUD but keep in mind the potential...
Overshoot below 2.50 marked potential capitulation. Currently working on break firmly above the 50DMA. Must take out 2.764 to confirm bottom. Must stay above 2.576 moving forward. Can take back 3.02 by 2H15.