FX Outlook – FXWW Chatroom

USD advanced against 7 G10s after overturning an early setback on soft 
Empire manufacturing data. The Dollar Index slipped into the red before 
bouncing higher to close at 96.80, highest level in a week. 
We remain bullish on USD in anticipation of extended upsides from firm 
market outlook on imminent Fed rate hike. The Dollar Index could still climb 
towards 97.13-97.16, where we expect firm resistance to decrease the 
pace of gains, or possibly trigger a rejection. 
EUR 
EUR fell 0.28% to 1.1078 against USD and fell against 6 G10s as it pulled 
back further from recent gains. 
EUR remains bearish in line with our expectations of continued USD 
firmness. We maintain the view that EURUSD has scope to drop to 1.1049; 
breaking this will leave 1.0996 exposed. 
GBP 
GBP tumbled against all G10s and weakened 0.36% to 1.5586 against 
USD. 
We stay bearish on GBP in anticipation of extended USD firmness and we 
caution stronger downside bias if UK price reports disappoint. GBPUSD 
saw rejection yesterday as we have cautioned and while below 1.5608 
could see further losses towards 1.5538. 
JPY 
JPY was supported in early trade by soft risk appetite as it advanced 
against 6 G10s, but weakened 0.06% to 124.39 against a rising USD. 
We remain bearish on JPY against a firm USD as well as slight recovery 
in risk appetite. USDJPY has some space for climbs towards 124.62, but 
we caution that it remains prone to rejection approaching that level. 
AUD 
AUD ended mixed against the G10s, overturning early losses as it tracked 
rising US equities higher but its recovery fell short against a firmer USD, 
closing 0.09% lower at 0.7372. 
AUD remains slightly bullish against USD as we anticipate continued 
rebound in risk appetite. Technical viewpoint suggests AUDUSD could still 
extend its rebound while above 0.7337, with scope to test 0.7440. 

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