Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY
EUR/USD: Neutral: Immediate weakness towards 1.0450/55.
EUR tested last week’s 1.0492 low yesterday but failed to break lower. However, the lack of a significant rebound coupled with improving downward momentum suggests that the immediate pressure is still on the downside. From here, a move to 1.0450/55 would not be surprising. Resistance is at 1.0560 but only a move back above 1.0590 would indicate that a short-term low is in place
GBP/USD: Bearish: Expect further weakness to 1.2200.
We just turned bearish GBP yesterday and there is no change to the view. As noted yesterday, 1.2200 is a key support and a break of this level could lead to a rapid drop towards the 1.1983 low seen in January.<strong>AUD/USD: Neutral: Expect further weakness towards 0.7510.
AUD/USD: Neutral: Expect further weakness towards 0.7510.
We were of the view that AUD has formed a temporary top and expected the pull-back to extend lower to 0.7605, possibly 0.7570. The rapid pace of the decline yesterday came as a pleasant surprise as AUD plummeted to a low 0.7557. The sharp drop coupled with the vastly improved downward momentum suggests further weakness from here. However, the next support at 0.7510 is rather strong level and may not yield so easily. The ‘break-down’ level near 0.7605 is acting as a very strong resistance now but only a move back above 0.7645 would indicate that the current AUD weakness has stabilized.
NZD/USD: Neutral: Immediate downward pressure towards 0.7010.
While we warned of the risk a lower NZD since two days ago, the ease of which major supports were taken out came as a surprise. The 0.7070 objective was breached yesterday as NZD hit a low of 0.7050. In view of the sharp decline, it is too early to expect a recovery as the immediate pressure is still on the downside. From here, the next level to watch is at 0.7010 followed 0.6950. These are strong levels and may not yield as easily. Only a move back above 0.7110 would indicate that the immediate downward pressure has eased.
USD/JPY: Neutral: Rebound has room to extend to 114.95.
There is not much to add; as noted yesterday, we expect the current USD rebound to extend to 114.95. Overnight high has been 114.59 and the strong undertone is still clearly intact. Only a move back 113.35 would indicate that a short term top is in place. On a shorter-term note, 113.75 is already a strong support.