EUR/USD: Neutral (since 07 Aug 17, 1.1785): Immediate bias is for a probe lower towards 1.1680.

EUR rebounded strongly after touching a low of 1.1702 yesterday. Downward pressure has eased somewhat with the strong daily closing but it is too early to expect stabilization. As indicated yesterday, only a move back above 1.1830 would indicate that the current mild downward pressure has eased. In the meanwhile, another push lower to test the 1.1680 support is not ruled out but at this stage, a sustained move below this level seems unlikely (there is another strong support at 1.1640). 

GBP/USD: Bearish (since 07 Aug 17, 1.3045): Still bearish but odds for extension to 1.2900 are not high.

GBP rebounded after retesting the 1.2950 support (overnight low of 1.2952). As indicated yesterday, while the bearish phase that started on Monday (07 Aug, spot at 1.3045) is still intact, patchy downward momentum suggests that the odds for further extension to 1.2900 are not high. However, confirmation of a short-term low is only upon a move back above 1.3060. That said, in the event of a ‘clear and sharp’ break of 1.2900, the focus would shift to the July’s low near 1.2815. 

AUD/USD: Neutral (since 27 Jul 27, 0.7995): AUD under pressure unless can recover above 0.7945.

There is not much to add as AUD traded mostly sideways yesterday before closing slightly lower. We continue to hold the view that AUD is under pressure unless it can recover back above 0.7945. That said, based on the current lackluster momentum, a sustained move below 0.7830 appears unlikely for now (a clear break of this level would indicate further weakness towards the rising trend-line support which is currently at 0.7765).

NZD/USD: Bearish (since 09 Aug 17, 0.7330): 0.7260 target exceeded, focus is at 0.7205 now.

The 0.7260 target indicated yesterday was exceeded when NZD dropped to a low of 0.7253. The bearish phase that started on Wednesday is still clearly intact and the next level to focus on is at the July’s low near 0.7205. Stop-loss is adjusted lower to 0.7350 from 0.7420. Positioning wise, the sell level suggested at 0.7380 yesterday is not met (high of 0.7373) and it appears that we have missed the ideal selling opportunity

USD/JPY: Bearish; USD decline running ahead of itself but room for extension to 108.10.

The sudden acceleration lower is unexpected and is already approaching the June’s low of 108.80. In other words, the USD weakness is already close to its immediate target. While the sharp decline appears to be running ahead of itself, a break below 108.80 would open up the way for further extension to the year-todate low near 108.10. On the upside, resistance is at 109.80 but only a move back above 110.10 would indicate that our bearish view is wrong.

Source: United Overseas Bank Global Economics & Markets Research