Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY
EUR/USD: Neutral: Diminished odds for extension to 1.0450/55.
The downward pressure mentioned in recent updates is waning rapidly and the odds for an extension to 1.0450/55 have diminished. That said, only a move back above 1.0620 would indicate that the immediate downward pressure has eased. All in, EUR has to move and stay below 1.0540 by end of today or it is likely that it has moved into a 1.0530/1.0680 consolidation range (that could last for a while).
GBP/USD: Neutral: Immediate upward pressure but has to clear 1.2610/15 to turn bullish.
The sharp rise and strong daily closing yesterday came as a surprise.While the overnight high of 1.2561 is still within our expected 1.2400/1.2580 consolidation range, the undertone has improved considerably. The immediate pressure is on the upside but GBP has to clear the major 1.2610/15 resistance to indicate that it has started on a sustained upmove (with an immediate target of 1.2705). Only a move back below 1.2470 would indicate the positive undertone has eased.
AUD/USD: Bullish: To take half profit at 0.7775/80.
We indicated yesterday that the current bullish phase in AUD would shift to neutral unless NY closing is above 0.7710. AUD rallied to a high of 0.7741 before closing at 0.7715. The outlook is still bullish but while upward momentum has improved, it is lacking in ‘impulsiveness’. All in, the bullish phase that started about 3 weeks ago is still in place but those who are long should look to take half profit at 0.7775/80, and to adjust stop-loss higher to 0.7660 from 0.7640.
NZD/USD: Neutral: Positive undertone but expect solid resistance at 0.7690.
While the overnight NZD strength came as a surprise, the high of 0.7246 is within our expected 0.7100/0.7260 consolidation range. The undertone has improved and while a move above 0.7260 would not be surprising, 0.7290 is a major level and is expected to offer solid resistance. That said, unless there is a move back below 0.7170 within these few days, the undertone would likely improve further.
USD/JPY: Neutral: In a 112.30/114.50 range.
Despite the rather weak daily closing, USD is still holding within the expected 112.30/114.50 consolidation range. From here, a test of 112.30 is not ruled out but based on the current lackluster momentum, a sustained move below this level is not expected.