Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY
EUR/USD: Neutral: Upside risk is greater but in a 1.0725/1.0935 range for now.
We continue to hold the view that EUR is consolidating its gains (after spiking to a high of 1.0935 early yesterday) and is expected to trade sideways for now, likely holding between 1.0725 and 1.0935. Near-term bias is tilted to the upside but EUR has to move clearly above 1.0935 to indicate that a move towards 1.1000 has started.
GBP/USD: Bullish: Overbought but room for extension to 1.2950.
GBP eased off quickly after spiking to a high of 1.2910 early yesterday.Upward momentum is showing signs of waning and this pair has to quickly reclaim 1.2860 or the risk of a short-term top would continue to grow. In other words, while we continue to expect the “UK election” rally to extend to 1.2950, this has to happen quickly as further consolidation at these higher levels would lead to a rapid loss in momentum.
AUD/USD: Neutral: In a 0.7475/0.7615 range.
As highlighted yesterday, AUD has likely moved into a consolidation phase. Indicators are mostly flat and we expect this pair to trade sideways in the coming days, likely holding within a 0.7475/0.7615 range.
NZD/USD: Neutral: In a 0.6940/0.7060 range. [No change in view]
NZD moved towards the top of the expected 0.6940/0.7060 consolidation range this morning with a high of 0.7054. Upward momentum has improved but only a clear break above 0.7060 would indicate that a move towards 0.7130 has started. At this stage the odds for such a move are not high and it is more likely that NZD is still trapped within a range.
USD/JPY Neutral: In a higher range of 109.30/110.60.
As noted yesterday, despite the strong surge early yesterday, we are not convinced that USD has moved into a bullish phase. This pair has more likely moved into a higher 109.30/110.60 consolidation phase and only a daily closing above 110.60 would indicate that a move towards 111.55/60 has started. At this stage, the odds for a shift to a bullish phase appear to be roughly ‘even’.