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Jun 13 - 09:48 AM
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
First appeared on eFXplus on Jun 12 - 10:23 PM

EUR/USD:  Neutral (since 05 Jun 18, 1.1700): A stronger corrective rebound to 1.1900 is not ruled out.

We have held the same view since last Thursday (07 Jun, spot at 1.1775) that “a stronger corrective rebound to 1.1900 is not ruled out”. Since then, EUR has been trading sideways, holding roughly between 1.1725 and 1.1840. While the mild upward pressure has eased somewhat, we still see chance for a stronger recovery as long as the ‘key support’ at 1.1690 is intact. That said, EUR has to start moving higher within these few days as a prolonged consolidation around these levels would lead to a rapid loss in upward pressure. Looking ahead, a breach of 1.1690 would not change the current neutral outlook but indicate that EUR would continue to trade sideways within a broad range.

GBP/USD:  Neutral (since 04 Jun 18, 1.3355): GBP has moved into a correction phase. No change in view.

The recent mild upward pressure has eased as GBP dipped below the 1.3350 ‘key support’ yesterday (low of 1.3345). However, there is no change to the current neutral outlook but GBP is more likely to trade sideways for now, expected to be between 1.3250 and 1.3470 (we previously see scope for a stronger rebound to 1.3520).

AUD/USD: Neutral (since 11 Jun 18, 0.7600): AUD has moved into a consolidation phase.

We just turned neutral on AUD on Monday (11 Jun, spot at 0.7600) and there is no change to the view. As highlighted previously, AUD has likely moved into a consolidation phase and is expected to trade sideways for now. Only a break back above last week’s top near 0.7675/80 would indicate that AUD has started the next up-leg towards 0.7740. In the meanwhile, we expect AUD to consolidate and trade sideways, likely within a 0.7530/0.7680 range. 

NZD/USD: Neutral (since 22 May 18, 0.6945): NZD to trade sideways for now. No change in view.

We highlighted in recent updates that NZD has “to stage the next ‘up-leg’ soon” or the risk of a break of the ‘key support’ at 0.6980 would increase quickly. NZD tried but failed to move above last week’s 0.7060 top yesterday as it slumped after touching an overnight high of 0.7053. The subsequent weak daily closing in NY is enough to indicate that the recent mild upward pressure has eased. However, there is no change to the neutral outlook but NZD is more likely to trade sideways from here, likely within a 0.6950/0.7060 range (we previously see scope for the rebound to ‘overshoot’ to 0.7080).

USD/JPY: Neutral (since 21 Feb 18, 107.35). Positive outlook could lead to a test of 111.00.

USD edged above the 110.50 resistance at the time of writing (high of 110.54) and as highlighted yesterday, a clear break of this level would indicate that the current USD strength could test the 111.00 resistance. Further extension to last month’s top near 111.40 is not ruled out but the odds for such a move are not high (momentum indicators appear to be lackluster at this stage). Overall, we hold a ‘positive’ view for USD (especially for the next few days) and only a break of the ‘key support’ at 109.70 (level previously at 109.40) would indicate that the current upward pressure has eased.

Source:
UOB Research/Market Commentary

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