Forex Flash: Stay long EUR/AUD - JPMorgan

AUD/NZD is approaching key support at 1.2100/1.1933 (July‘10/Oct’09 lows), level where, according to Niall O'Connor, currency strategist at JPMorgan, "some retracement to the one-way decline over the past several weeks can develop", adding that the setup "is also in line with the oversold and diverging momentum setup on a daily and weekly basis."

Nial adds: "While a retracement is also consistent with the recovery in AUD/USD from the key support (1.0225/55 area), note that AUD remains quite mixed on the crosses. In this regard, we highlight the potential for a continuation of the base breakout in EUR/AUD. Note that we added to our long trade recommendation given this week’s pullback into key support near 1.2900/1.2875."