EUR/USD: Neutral: In a 1.0700/1.0830 range.
We indicated yesterday that the recent downward pressure has eased and that EUR has likely moved into a 1.0700/1.0830 consolidation range. There is no change to the view even looking further ahead, the upside appears to be more vulnerable but EUR has to ‘punch above’ 1.0830 or the recent lackluster price action would likely persist. On the downside, 1.0700 is expected to hold but a clear break below this level would indicate that a deeper pull-back towards the late January low of 1.0615/20 has started.
GBP/USD: Neutral: In a 1.2400/1.2730 range.
GBP traded in a rather tight 77 pips range yesterday (between 1.2427 and 1.2504), the narrowest daily range in more than a month. The listless trading is in line with the neutral outlook and at this stage, we continue to hold the view that GBP is trading within a broad 1.2400/1.2730 range.
AUD/USD: Bullish: Anticipating a break above 0.7700.* [No change in view]
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: Focus shift to 0.7400.
NZD just broke above the recent peak at 0.7350 at the time of writing (high of 0.7364 so far). As noted in recent updates, a clear break above this level would indicate that the next leg higher towards 0.7400 has started.
USD/JPY: Neutral: Immediate downward pressure towards 111.30.
While we held the view that the improved downward momentum could lead to a ‘grudging’ move lower towards 111.30, the ease of which the major 112.00 support was taken out came as a surprise (low of 111.60 so far). With no signs of stabilization just yet, we continue to expect a move to 111.30 where a break could lead to further weakness towards 110.00. Only a move above the short-term key resistance at 112.90 would indicate that the immediate downward pressure has ease.
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