As we highlighted in our last report, the US currency continues to rally against the Dollar bloc (Australian, New Zealand and Canadian Dollars), but a more positive tone has begun to emerge elsewhere as we approach mid-July.
USDJPY gains and a EURUSD setback after a supposed positive outcome for the Greek Debt Crisis leave a bullish tone for the US Currency against most major currencies within G10.
Only a corrective Cable rebound from last week (GBPUSD higher), sees the US Dollar on the defensive.
Overall, this activity points to a more positive tone now for the US currency through mid-July.
- A strong rebound rally leaves risks higher into mid-July, back to test a key peak at 123.72
- Above here would neutralise bearish pressures and set a broader range theme, but with a constructive tone.
- Below 121.95 is needed to re-energize a more bearish tone.
Daily USDJPY Chart
- Still very much defined by a range theme between 1.1436 and 1.0819 into mid-July.
- However, the more recent failure back from 1.1278 and push down to 1.0914 leaves risk skewed to the downside.
- Below 1.0819 sets a more bearish tone to challenge 1.0658, 1.0520 and the cycle low at 1.0459.
Daily EURUSD Chart
- A solid rebound from last week, from ahead of key trend line and chart support, 1.5169.
- This leaves a rebound bias back into the setback range into mid-July.
- However, the underlying base and bull them remain intact for a July challenge back to 1.5930 and 1.6000.