EUR/USD: Neutral (since 15 Nov 17, 1.1795): Room for further recovery to 1.1920.

EUR rebounded strongly yesterday and took out the key 1.1815 resistance. The 1.1716 low seen earlier this week is deemed as a shortterm low. While the neutral outlook remains intact, the current recovery appears to have room to extend higher towards 1.1920. The next resistance is at the November’s high of 1.1960 and at this stage, the odds for a move towards this level are not high. Overall, EUR is expected to stay underpinned in the coming days with 1.1760 acting as a ‘key short-term support’.

GBP/USD: Neutral (since 06 Dec 17, 1.3420): Back in range, likely between 1.3300 and 1.3520.

The recent mild downward pressure has eased as GBP bounced back above the strong 1.3400 resistance (overnight high of 1.3428). The outlook remains neutral and GBP has likely moved back into a range-trading mode. In other words, sideway trading is expected from here, likely between 1.3300 and 1.3520.

AUD/USD: Neutral (since 24 Nov 17, 0.7625): Shift to bullish if NY closing is above 0.7655.

While we highlighted yesterday that the rebound in AUD “has room to extend towards 0.7615”, the subsequent rapid rally and the ease of which this level was taken out came as a surprise. Upward momentum has improved further and from here, a NY closing above 0.7655 would indicate that AUD has moved into a bullish phase (with an immediate target of 0.7730). This scenario seems likely unless there is a drop back below 0.7580 within these 1 to 2 days.

NZD/USD: Shift from neutral to BULLISH: Room for extension to 0.7080, possibly 0.7120.

In the update on Tuesday (12 Dec, spot at 0.6910), we expected NZD to extend its gain towards the November’s top of 0.6980. NZD cracked this rather strong resistance with ease yesterday and this has shifted the outlook to bullish. While the rally appears to be running ahead of itself, there is room for further extension to 0.7080 (with lower odds for a further strength to 0.7120). Only a move below 0.6930 would indicate that our bullish view is wrong. On a shorter-term note, 0.6960 is already a strong support.

USD/JPY: Neutral (since 30 Nov 17, 112.00): Back in range, likely between 112.00 and 113.50.

USD dropped below the key 113.00 support and this indicates that a short-term top is in place. However, there is no change to the neutral outlook but USD has likely moved into a sideway consolidation phase. In other words, USD is expected to trade sideways for now, likely between 112.00 and 113.50 (we previously expected the rebound to extend higher to 113.90, high earlier this week has been 113.74).

Source: United Overseas Bank Global Economics & Markets Research