Limited upside potential for the EUR/USD pair

EUR/USD

With the move above 1.4440, the hourly trend is now considered on the upside. Right now the market is overbought and some kind of a pullback towards 1.4425/20 can be seen later today but as long as the prices hold above 1.4340, the hourly trend remains higher and gains towards 1.4570 are seen. However, the upside potential is likely to be limited to there as the triangle on the daily chart from the May top does not look complete yet.

EUR/USDhourly chart

Very Short-Term Trend: uptrend
Strategy: Stand aside.

GBP/USD

Outlook: GBP broke above 1.6045 level and rallied to 1.6117 earlier this morning (in Asia trading). Now, with this breakout the trend on the hourly chart is considered up. However, we still believe that the daily chart is bearish (although it is not as bearish as it was yesterday) and a move below 1.6045 will signal that the ST decline has resumed. Such a break below 1.6045 will negate the hourly uptrend as well. Thus, we favor a short position on such break. On the upside, a move above 1.6140 will be a clear sign of strength and will signal gains towards 1.6200 and higher.

GBP/USD hourly chart

Very Short-Term Trend: uptrend
Strategy: Shorts favorable on break of 1.6046. Stop=50 pts. Target=1.5845.

USD/JPY

Outlook: Once again USD/JPY failed to make a sustainable move. After it broke above 81.05, we thought there was a chance for a more significant move higher, but such a move did not occured. With the current retreat we are now back in the 80.00 - 81.00 range. The key level on the downside however is a bit lower, at 79.70 and only a move below there will be a bearish sign.

USD/JPY hourly chart

Very Short-Term Trend: sideways consolidation
Strategy: The hypothetical long position from 81.10 was stopped out at 80.70 with 40 pts loss. Stand aside.