The daily close above .7450 in the AUD/USD will have many perma-bears extremely worried and I expect to see the macro players starting to cover their shorts. The AUD is also looking very perky on the crosses, AUD/NZD in particular looks set for a big move higher, and all signs point towards 80 cents for the Aussie. The only question in my mind is how quickly this might happen.
Similarly with Cable, the market got way ahead of itself and started getting overly bearish at the wrong levels. I expect to see 1.48 in coming weeks and then we may see some equilibrium return to the market.
Like I’ve said previously, I expect the move lower in USD/JPY to lag as GBP/JPY and AUD/JPY make up oversold tendencies. Similarly EUR/USD and NZD/USD may also lag the lead pairs as the crosses get more attention (EUR/GBP and AUD/NZD).