EUR/USD: Neutral (since 14 Sep 17, 1.1890): Recovery has room to extend higher to 1.1930.

While we highlighted yesterday that the “risk of a sustained down-move has eased”, the rapid and sharp rise that easily took out 1.1780 came a surprise. The immediate pressure has shifted to the upside and the current recovery has scope to extend further towards 1.1930. At this stage, a sustained move above this level seems unlikely. Overall, EUR is expected to stay underpinned in the coming days unless there is a move back below 1.1720 (key short-term support). On a shorter-term note, 1.1750 is already a rather strong support.

GBP/USD: Shift from bearish to NEUTRAL: In a 1.3100/1.3330 range.

The bearish phase that started last Friday ended quickly as GBP moved above the 1.3200 stop-loss yesterday. GBP has likely made a short-term low at 1.3027 and the current movement is viewed as the early stages of a consolidation phase. In other words, GBP is expected to trade sideways from here, likely within a 1.3100/1.3330 range.

AUD/USD: Bearish (since 22 Sep 17, 0.7930): Diminished odds for further AUD weakness.

The recent downward momentum is beginning to wane and from here, the odds for further AUD weakness have diminished. However, confirmation of a short-term low is only upon a break of 0.7835. A break of 0.7835 would not be surprising unless AUD can move and stay below last week’s low near 0.7730/35 within these 1 to 2 days. 

NZD/USD: Bearish (since 10 Oct 17, 0.7065): Immediate target of 0.7000.

We just turned bearish NZD yesterday and there is no change to the view. 

USD/JPY: Shift from bullish to NEUTRAL: In a 111.45/112.90 range.

We highlighted the increasing risk of a short-term top in recent updates and the breach of the 112.20 yesterday was not exactly unexpected. The 113.43 high registered last Friday is deemed as a short-term top and from here, USD has likely moved into a consolidation phase. That side, the immediate bias is tilted to the downside but at this stage, any weakness is unlikely to move significantly below the expected 111.45/112.90 consolidation range.

Source: United Overseas Bank Global Economics & Markets Research