EUR/USD: Neutral: Diminished odds for further EUR weakness.
EUR edged below Monday (03 Apr) low of 1.0641 to touch 1.0634 but rebounded quickly to close higher for the day. The pull-back from last week’s 1.0904 high is showing early signs of basing but until 1.0730 is taken out, another push lower towards the major 1.0595 support could not be ruled out just yet. That said, the odds for such a move have diminished.
GBP/USD: Neutral: In a 1.2350/1.2580 range.
Our recent expectation for a stronger recovery was proven wrong as GBP dropped below the key short-term support at 1.2435 (overnight low of 1.2419). This pair has likely moved into a consolidation phase and is expected to trade sideways in the coming days, likely within a 1.2350/1.2580 range (roughly within the past fortnight range).
AUD/USD: Neutral: Immediate downward pressure towards 0.7490.
We highlighted the downside risk in AUD on Monday and further warned yesterday that “a clear break below 0.7585/90 could lead to a rapid drop towards the March’s low of 0.7490”. AUD dropped to a low of 0.7545 yesterday and the decline appears incomplete and the immediate pressure is still clearly on the downside. That said, 0.7490 is a major support and at this stage, a sustained break below this level is not expected (0.7520 is already a strong shorter-term support). Resistance is at 0.7595 but only a move back above 0.7620 would indicate that a short-term low is in place.
NZD/USD: Neutral: A sustained move below 0.6950 is unlikely.
NZD is approaching the bottom of the expected 0.6950/0.7090 consolidation range. While a dip below 0.6950 is not ruled out, a sustained move below this level is not expected. That said, the downward pressure would continue to increase in the coming days unless NZD can reclaim 0.7020/25.
USD/JPY: Neutral: In a 110.00/112.20 range.
We continue to hold the view that USD is trading in a 110.00/112.20 range and indicated yesterday that “it is more likely that we would see a move to 110.00 first”. USD touched an overnight low of 110.24 but downward momentum has waned considerably with the subsequent strong rebound. As long as 111.50 is intact, another push lower towards 110.00 is not ruled out but at this stage, we do not expect a sustained break below this level.
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