Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY
EUR/USD: Neutral: In a 1.0700/1.0840 range.
The recent short-term upward pressure has eased and EUR has likely moved into a 1.0700/1.0830 consolidation phase. Looking further ahead, the upside appears to be more vulnerable even though this pair has to ‘punch above’ 1.0840 or the recent lackluster price action would likely persist.
GBP/USD: Neutral: In a 1.2400/1.2730 range.
GBP traded in a relatively narrow range of 1.2457/1.2538 last Friday. While the weak daily closing suggests a negative undertone, any down-move is expected to encounter solid support at 1.2400. In other words, there is no change to the current neutral outlook for GBP and this pair is expected to continue to trade in a broad 1.2400/1.2730 range for now.
AUD/USD: Bullish: Anticipating a break above 0.7700.*
We turned bullish AUD last Friday and there is no change to the view. The ‘buying level’ indicated at 0.7620/25 was met as AUD dipped to a low of 0.7619 during NY hours. From here, as long as 0.7595 is intact (stop-loss adjusted from 0.7560), we continue to anticipate a break of the strong 0.7700 resistance. A clear break of this level is expected to lead to acceleration higher towards last November’s top near 0.7775/80.
NZD/USD: Bullish: Diminished odds for further NZD strength.
The current bullish phase is entering its third week (see annotated chart below). The choppy trading over the past several days has resulted in a loss in upward momentum and NZD has to break above the recent peak near 0.7350 or the risk of deeper pull-back would continue to increase. A clear break above 0.7350 would indicate that a move towards last November’s 0.7400/05 high has started.
USD/JPY: Neutral: Immediate downward pressure towards 111.30.
While USD continues to hold above the key 112.00/05 support, downward momentum has continue to improve (albeit ‘grudgingly’) and the immediate bias from here is a move below 112.00/05 for a move towards 111.30. Only a move above 113.50 would indicate that the immediate downward pressure has eased (minor resistance at 113.10).