Tech Targets: EUR/USD, GBP/USD, USD/JPY, AUD/USD, NZD/USD - UOB

EUR/USD: Neutral (since 14 Sep 17, 1.1890):  Pull-back has room to extend lower to 1.1770.

EUR staged a strong rebound but as highlighted yesterday, as long as 1.1980 is not taken out, the immediate pressure remains on the downside, However, after the strong recovery, the odds for further extension towards 1.1770 have diminished. In the meanwhile, EUR could consolidate for a few days before making another attempt to move lower.  

GBP/USD: Shift to bearish; target 0.7870 followed by 0.7810. 

While we highlighted a “higher risk of a break lower” yesterday, the ease of which the major 0.7940 support was breached and the rapid pace of decline came as a surprise. The “bearish if NY closing is below 0.7940” condition was met. From here, the immediate target is at 0.7870 followed by 0.7805/10. 

AUD/USD: Bullish (since 08 Sep 17, 1.3100): Diminished odds for further GBP strength.

While the robust recovery yesterday bodes well for GBP, we still hold the view that the odds for a break above the major weekly trendline resistance at 1.3655 have diminished. That said, only a move back below 1.3440 would indicate that the bullish phase that started 2 weeks ago (08 Sep, spot at 1.3100) has ended. In the meanwhile, GBP could consolidate between 1.3440 and 1.3655 for a couple of days before making the ‘decision’ to head higher or lower.

NZD/USD: Neutral (since 06 Sep 17, 0.7255): In a choppy range of 0.7250/0.7400. No change in view, see update from yesterday below) 

While NZD took out the major 0.7400 resistance and hit a high of 0.7434 yesterday, it was unable to maintain a foothold above 0.7400 (daily closing at 0.7358). We have held a ‘positive’ view for this pair since earlier this week but the price action yesterday is not enough to convince us to upgrade our call to ‘bullish’. From here, 0.7435 would be a high hurdle to overcome and while we do not rule out a break above this level, the odds for such a move are not high. In the meanwhile, this pair is expected to continue to trade choppily albeit with a positive undertone. Expected range in the coming days; 0.7250/0.7400.

USD/JPY: Bullish (since 13 Sep 17, 110.15): Focus is at 113.50 now.

As highlighted yesterday, the focus now is at the next major 113.50 resistance. On a shorter-term note, upward momentum is showing signs of easing off but this is seen as part of a consolidation phase and not a reversal. Overall, the bullish phase that started last Wednesday (13 Sep) is deemed as intact until 111.60 is taken out.

Source: United Overseas Bank Global Economics & Markets Research