Tech Targets: EUR/USD, GBP/USD, USD/JPY, AUD/USD, NZD/USD - UOB
EUR/USD: Neutral: In a range, likely between 1.0420 and 1.0620.
EUR edged above the strong 1.0620 resistance once again but eased off quickly after touching a high of 1.0626 yesterday. The price action is line with our expectation wherein we view the current movement as part of a 1.0420/1.0620 consolidation range. That said, the shorterterm undertone is still positive and further attempts to move higher would not be surprising but 1.0620 is expected to continue to offer solid resistance (followed closely by another major resistance zone near 1.0650/70). On the downside, solid support is at 1.0505 (stronger level near 1.0470).
GBP/USD: Bearish: Expect strong support at 1.2085/90.
We turned bearish GBP yesterday but highlighted the less than favourable reward to risk ratio as the October’s low of 1.2085/90 is expected to offer solid support. GBP dipped initially but rebounded quickly after hitting a low of 1.2107. From here, as long as 1.2290 is intact, another attempt to move towards 1.2085/90 still seems likely. On a shorter-term note, 1.2250 is already a strong resistance.
AUD/USD: Bullish: Immediate target of 0.7430 possibly 0.7525.
We turned bullish AUD yesterday and there is no change to the view. However, the lack of a significant follow-through after the break of the trend-line resistance at 0.7350/55 is a concern. That said, only a move back below 0.7285 (adjusted from 0.7250) would indicate that our bullish view is wrong. Immediate target remains at 0.7430 and a clear break above this level would shift the focus towards last month’s high at 0.7525.*
NZD/USD: Neutral: In a 0.6920/0.7055 range. [No change in view].
While upward momentum has improved, it is too early to expect a sustained up-move as 0.7055 is a very strong resistance and this level is unlikely to yield so easily. Overall, we prefer to hold a neutral stance for now even though the short-term bias is tilted to the upside (as long as 0.6950 is intact).
USD/JPY: Neutral: Back in a 115.50/118.60 range.
USD touched a low of 115.18 yesterday but the down-move was short-lived. As noted yesterday, while the short-term risk is tilted to the downside, it is too early to expect a sustained down-move. Solid support can be expected at 115.00/05 and only a clear break below this level would indicate that a deeper probe towards 114.00 has started. On the upside, USD has to reclaim 117.50 to indicate that the short-term downward bias has eased.
*This trade is recorded in eFXplus Orders.