USD/JPY is still the most bullish USD pair and doesn't offer any significant resistance up to the 2007 high at 124.16, notes JPMorgan Chase & Co (NYSE:JPM).
"That said we can only recommend to stick to USD longs as long as the market hasn’t displayed two consecutive lower hourly closes with the lagging line below the Ichimoku-cloud (currently at 114.56)," JPM advises.
"Only such a break would open the door for a deeper setback to 111.93 (minor 38.2 %) if not to 108.35 (38.2 % on higher scale) in case the former fails to provide support," JPM adds.
In EUR/USD, JPM holds the same view warning of a near-term rebound that still would need be validated vai a break above 1.2516.
"...We definitely see an increased risk of having at least launched a broader 4th wave rebound to 1.2871. But as long as 1.2516 (minor 38.2 %) has not been broken decisively on hourly close (i.e. above 1.2535), the odds remain in favor of a straight extension to 1.2318, 1.2260 and possibly 1.2221 (Fib.-projections/weekly trend)," JPM clarifies.
"Only above 1.2535 and 1.2614 (pivot) we'd see 1.2871 (38.2 % on higher scale) in focus," JPM argues.
In its technical portfolio, JPM holds a long USD/JPY position from 113.99 targeting 120 with a stop at 110.65.