Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY
EUR/USD: Neutral: In a 1.0580/1.0750 range.
As noted yesterday, the short-term bias is tilted to the downside and a move below the expected 1.0580/1.0750 consolidation range would not be surprising. That said, based on the current momentum, any decline is expected to struggle to move below last week’s low at 1.0520. Only a ‘clear and clean’ break below 1.0520 would indicate that a move towards 1.0400 has started. Resistance is at 1.0640 but the key level to monitor for the next several days is at 1.0670 (stabilization only above this level).
GBP/USD: Neutral: Early and tentative signs of a break lower.
As highlighted yesterday, the immediate downward pressure is expected to increase unless GBP can reclaim the key short-term resistance at 1.2530 (overnight high has been 1.2482). To put it another way, we continue to see early and tentative signs that the recent prolonged consolidation could be resolved with a downside ‘break’. That said, GBP has to move clearly below 1.2350 to indicate that a sustained down move towards 1.2250 has started. Minor support is at 1.2405.
AUD/USD: Bullish: To take half profit at 0.7775/80.
AUD traded in a tight 30 pips range yesterday (between 0.7660 and 0.7690) and upward momentum has deteriorated further. However, only a break below 0.7640 would indicate that a short-term top is in place. Until then, another push higher toward 0.7775/80 (for profit-taking) could not be ruled out just yet even though this level is quickly slipping out of reach unless AUD can move and stay above 0.7710 within these 1 to 2 days.
NZD/USD: Neutral: In a 0.7150/0.7320 range.
We noted yesterday that “the immediate bias has shifted slightly to the downside” and were of the view that a move below the expected 0.7150/0.7320 consolidation range would not be surprising. The prospect of a deeper probe has improved further and the 0.7135 low seen last week is likely to be challenged within these few days. Only a move back above 0.7220 would indicate that the immediate downward pressure has eased.
USD/JPY: Neutral: In a 112.30/114.50 range.
After closing lower for 3 straight days, USD ended higher yesterday and registered a modest gain. From here, the price action is still viewed as part of a 112.30/114.50 consolidation range and based on the current indicators, this range is expected to be intact for a while yet.