EUR/USD: Neutral (since 21 Aug 18, 1.1485): Dip below 1.1300 would not be surprising but break of 1.1265 seems unlikely. No change in view.
EUR recovered and the bottom of our expected 1.1300/1.1440 consolidation range at 1.1300 remains unchallenged (low of 1.1311). Despite the recovery, the underlying tone remains soft and we continue to see chance for EUR to dip below 1.1300. However, as highlighted yesterday, a break of the next support at 1.1265 seems unlikely.
GBP/USD: Neutral (since 21 Aug 18, spot at 1.2795): Downward momentum has waned, GBP is likely to consolidate for now.
There is not much to add to yesterday’s (13 Dec) update. As highlighted, while the recent downward momentum has waned, it is too early to expect a sustained recovery. GBP is more likely to consolidate and trade sideways for the next couple of weeks, likely within a broad 1.2480/1.2800 range.
AUD/USD: Neutral (since 13 Sep 18, spot at 0.7170): AUD is still under pressure but a break of 0.7130 would come as a surprise.
While AUD closed higher for the third day in a row (albeit marginally by +0.05%), only a move above the 0.7270 ‘key resistance’ (no change in level) would indicate that the current downward pressure has eased. Until then, the downside bias is still intact even though lackluster momentum indicates that a break of the major 0.7130 support is unlikely.
NZD/USD: Neutral (since 07 Dec 18, 0.6880): NZD has moved into a consolidation phase. No change in view.
NZD dipped briefly to 0.6825 yesterday, not far from the bottom of our expected 0.6820/0.6930 consolidation range. The quick rebound from the low reinforces our current view wherein NZD is trading in a consolidation phase for now (same view since last Friday, 07 Dec). Looking further ahead, the weakened underlying tone suggest higher risk of a clear break below 0.6820 but for the next one week or so, we do not expect the late-November low near 0.6755 to come into the picture.
USD/JPY: Neutral (since 09 Oct 18, 113.10): USD has moved into a consolidation phase.
USD touched 113.70 yesterday before ending the day on a firm note (NY close of 113.62, +0.62%). While the underlying tone has improved, we still view the current movement as part of a consolidation phase between 112.40 and 113.90 (same view since Tuesday, 11 Dec). From here, an intraday move above 113.90 is not ruled out but based on the lackluster momentum, we do not expect last month’s 114.20 peak to come under threat.