Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY
EUR/USD: Neutral: No signs of stabilization, expect extension to 1.0530.
In line with expectation, EUR continues to grind lower and touched a ‘fresh low’ of 1.0559 yesterday. The undertone is still negative and we continue to expect further weakness towards the major 1.0530 support (the next significant support is much lower at 1.0450/55). The short-term key resistance is pegged at 1.0640, slightly lower than 1.0660 previously.
GBP/USD: Neutral: Still in a range, likely within 1.2350/1.2600.
GBP continues to trade in a choppy manner and the current neutral phase is still clearly intact. Indicators are mostly ‘flat’ which suggest further range trading for now, likely between 1.2350 and 1.2600.
AUD/USD: Bullish: Time running out for AUD bulls.
We turned bullish about 2 weeks ago when AUD broke above 0.760. Since then AUD has been caught in a 0.7605/0.7696 range and has been unable to much headway despite overall bullish indications. While the price action appears to be forming a ‘bullish flag’, the rapidly deteriorating upward momentum suggests that time is running out for AUD bulls. Unless there is a clear break above 0.7695/00 soon, the risk of short-term top would grow quickly but confirmation is only upon a break below the current stop-loss at 0.7615 (the overnight low of 0.7618 came very close to this level). After the prolonged consolidation, a clear break above 0.7695/00 could unleash a rapid acceleration higher towards 0.7775/80 (high in November last year).
NZD/USD: Neutral: Stabilization only if above 0.7220.
As indicated yesterday, only a move back above 0.7220 would indicate that the current negative undertone for NZD has stabilized. NZD hit a ‘fresh low’ of 0.7135 yesterday and as long as 0.7220 is intact, this pair is expected to edge lower and test the rather strong support at 0.7115/20. Further down, the next support is markedly lower at 0.7060.
USD/JPY: Neutral: Positive undertone intact as long as above 113.20.
In line with expectation, USD extended its rebound and hit 114.50 at the time of writing. The current positive undertone is still intact as long as 113.20 is not taken out and there appears to be scope for extension to 115.35/40. At this stage, a sustained break above this level appears unlikely. Minor support is at 113.90.