Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY
EUR/USD: Neutral: Immediate downward pressure towards 1.0525.
We indicated last Friday that a clean break of the key trendline support at 1.0600 is expected to lead to a rapid drop to 1.0525/30. The low has been 1.0578 on Friday and we continue to anticipate further weakness towards 1.0525. The next key level is at 1.0492, the low seen in February which is acting as a very solid support. Overall, only a move back above 1.0665 would indicate that the immediate downward pressure has eased. On a shorter-term note, 1.0630 is already a rather strong resistance.
GBP/USD: Neutral: Immediate downward pressure towards 1.2285.
Now that GBP is sitting just above the bottom of the previously expected 1.2350/1.2580 consolidation range, the question is whether we can see a sustained move below 1.2350. Based on the current momentum, the short answer is ‘yes’ even though any weakness is expected to encounter solid support near 1.2285. Only a move back above 1.2460 would indicate that the immediate downward pressure has eased.
AUD/USD: Neutral: Extension towards 0.7450 seems likely.
In the update on Friday, we indicated that a break of 0.7490 could lead to acceleration lower to 0.7450. While 0.7490 is still intact at the time of writing, a break of this level seems likely and the current AUD weakness is expected to extend towards 0.7450 (next support at 0.7400). Only a move back above 0.7550 would indicate that the immediate downward pressure has eased.
NZD/USD: Neutral: Immediate downward pressure towards 0.6900, with lower odds for extension to 0.6863.
Against our expectation, NZD continues to move lower and closed clearly below the key 0.6950 support. Downward momentum has improved considerably and the current weakness is expected to extend further to 0.6900, with lower odds for extension to 0.6863 (low in December last year). On the upside, 0.6995 is likely strong enough to cap any shorterterm rebound.
USD/JPY: Neutral: Recovery has scope to extend to 112.20
The sudden and sharp swing higher in USD (after dropping to a low of 110.11) last Friday was unexpected. The move back above 111.00 indicates that a short-term low is in place. The recovery appears incomplete and there is room for extension to 112.20 (high seen in late March). On the downside, the 110.60 support is likely strong enough to hold for the next couple of days even though the key level is still clearly at 110.00.