Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY
EUR/USD: Neutral: Recovery to extend to 1.0825/30.
EUR closed higher for the second straight day and we continue to hold the view that the current strength has room to extend higher towards the year-to-date high at 1.0825/30. This is a rather strong resistance and is unlikely to yield so easily (next resistance is at last December’s high near 1.0870. All in, this pair is expected to stay underpinned from here as long as 1.0670 is not taken out. On a shorter-term note, 1.0700 is already a strong support.
GBP/USD: Neutral: Bullish if daily closing above 1.2370.
The overnight high of 1.2377 edged above the expected consolidation range of 1.2150/1.2370. This coupled with the strong daily closing suggest further upwards pressure and a daily closing above 1.2370 would indicate that GBP has moved into a bullish phase (with an immediate target of 1.2500). This scenario would not be surprising unless GBP ends below 1.2270 by end of today’s NY session.
AUD/USD: Neutral: Bullish only if above 0.7740
While the undertone is clearly positive, AUD has to move clearly above last month’s peak near 0.7740 to indicate that it has moved into a bullish phase. While such a move seems likely, the pace of the rally two days ago has been rather rapid and it may take more than a few days before a clear break above 0.7740 can be expected. In the meanwhile, AUD is expected to stay supported with solid support at 0.7600.
NZD/USD: Neutral: Scope for extension to 0.7085.
The deep pull-back that hit an overnight low of 0.6968 came as surprise. That said, as highlighted yesterday, only move back below 0.6920 would indicate that the immediate upward pressure has eased. In the meanwhile, this pair could spend a few days consolidating before making another push higher even though any up-move is expected to face stiff resistance near 0.7045/50 (high seen two days ago)
USD/JPY: Neutral: Extension lower unlikely to have enough momentum to reach 111.65/70.
USD edged lower to touch 112.89 before rebounding quickly. As indicated yesterday, while the immediate pressure is clearly on the downside, the 111.65/70 low seen in late February appears to be out of reach (minor support at 112.70). All in, only a move back 114.30 would indicate that the current weakness has stabilized (113.90 is already a stronger shorter-term resistance).