UPDATE - 07.05am - has opened with the immediate outlook more unclear than originally expected. Trading for the remainder of this morning is now likely to have a neutral bias until 1.3693 - 1.3754 breaks.
Although, in line with yesterday's negative outlook for sentiment, prices initially declined again yesterday the market was unable to build upon Wednesday’s strong downside. In fact, buying interest, albeit mild, was seen at a trend of higher daily lows that goes back to the middle of June. The rebound from the lows was only minor but does leave intraday signals mildly supportive going into Friday. With this in mind, expect prices to trade sideways to higher while above 1.3693 with an immediate target of 1.3773, a recovery of half of Wednesday’s net losses (1.3823 – 1.3722). A move back above that point would add to positive momentum but gains are still likely to be capped by 1.3823, Wednesday’s open. The risk to this mildly bullish forecast is that selling pressure has been under-estimated, taking EURUSD below 1.3693, yesterday's low, confirming a break of the daily bull trend. A further corrective move then targets 1.3628, a 38% pullback of the June to July rise (1.3264 – 1.3853), or a broader 50% correction of 1.3558.