Tech targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY
EUR/USD: Neutral: Immediate downward pressure towards 1.0615, possibly 1.0575.
EUR took a peek above 1.0700 yesterday (high of 1.0709) before easing off quickly. The down-move is lacking in momentum but as mentioned previously, the current short term weakness appears to have scope to extend lower to 1.0615 (with lower odds for extension to 1.0575). Only a move back above 1.0730 would indicate that the immediate downward pressure has eased (1.0710 is already a strong resistance).
GBP/USD: Neutral: In a 1.2350/1.2670 range.
There is not much to add as GBP traded in a relatively narrow 1.2475/1.2550 range yesterday. The recent choppy swings have resulted in a mixed outlook and the near-term direction is unclear. We turned neutral about one week ago and at this stage, there are no early indications that GBP is about to embark on a sustained directional move. In other words, we continue to hold a neutral view and expect choppy consolidation within a 1.2350/1.2670 range.
AUD/USD: Bullish: Diminished odds for further AUD strength.
As highlighted yesterday, in order to maintain the current bullish momentum, AUD has to ‘punch above’ the key 0.7700 resistance within these couple of days or the risk of a short-term would increase quickly. However, confirmation of a short-term top is only upon a move below the trailing stop-loss at 0.7595.
NZD/USD: Neutral: Immediate downward pressure towards 0.7155.
As highlighted yesterday, a clear move below 0.7220 would indicate that a deeper pull-back towards 0.7155/60 has started. The overnight low has been 0.7172 and from here, the immediate pressure is still on the downside (unless NZD can quickly reclaim 0.7270). A clear break below 0.7155 would suggest that NZD has entered a bearish phase (with an immediate target of 0.7050).
USD/JPY: Neutral: Rebound to extend further to 114.50.
The recent short-term downward pressure shifted quickly to the upside as USD surged above the strong 112.90 resistance. The price action is constructive for USD but at this stage, we are not convinced that the present strength could be sustained. That said, for the next few days, the current rebound from the 111.55/60 low seen earlier this week appears to have ample momentum to extend further to 114.50 (where a clear break would greatly increase the odds for a move towards the 115.35/40 high seen in late January). The current positive outlook would remain intact as long as 112.60 is not taken out.