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Thomson Reuters
Mar 15 - 01:24 AM
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
First appeared on eFXplus on Mar 14 - 11:00 PM

EUR/USD: Neutral (since 21 Aug 18, 1.1485): EUR has likely moved into a consolidation phase. No change in view from yesterday, see reproduced update below.

There is not much to add to the update from yesterday (13 Mar, spot at 1.1285). As highlighted, the break of the 1.1290 resistance on Tuesday (12 Mar) suggests that the weakness in EUR has stabilized. The current movement is viewed as part of an on-going consolidation phase and EUR is expected to trade sideways in the coming days, expected to be within a broad range of 1.1200/1.1380. That said, after the relatively strong gain of +0.34% yesterday (NY close of 1.1325), the risk of a break of 1.1380 has increased a tad. Looking forward, a break of 1.1380 would suggest EUR could extend its recovery but the late-Feb peak at 1.1420 is another solid resistance and is unlikely to yield so easily

GBP/USD: Neutral (since 21 Aug 18, spot at 1.2795): GBP is expected to trade with a positive bias. No change in view from yesterday, see reproduced update below. As highlighted, overbought short-term conditions could lead to a few days of sideway trading first.

We indicated yesterday (13 Mar, spot at 1.3070) that the outlook for GBP is unclear and further choppy and wild swings is likely. We highlighted the two major levels at 1.2945 and 1.3350 and held the view that a clear break of last month’s 1.3350 peak would suggest that GBP is ready to tackle the next resistance at 1.3470. Rejection of a ‘no-deal’ Brexit sent GBP rocketing past 1.3350 as it hit a high of 1.3380 during late-NY hours. Despite the subsequent swift pull-back from the top, the immediate risk has shifted to the upside and GBP could extend its advance to 1.3470. That said, overbought short-term conditions could lead to few days of sideway trading first. Overall, we expect GBP to trade with a positive bias and only a break of 1.3050 would indicate that GBP is not ready to move higher in a meaningful way.

AUD/USD: Neutral (since 13 Sep 18, spot at 0.7170): AUD is expected to trade sideways.

There is no change to the view as highlighted on Wednesday (13 Mar, spot at 0.7070) wherein AUD has moved into a consolidation phase and is expected to trade sideways in the coming days. The rapid dip to 0.7042 yesterday (14 Mar) and the subsequent quick bounce from the low reinforces our view. In other words, there is no directional bias and AUD is expected to continue to trade sideways, likely between 0.7000 and 0.7120.

NZD/USD:  Neutral (since 07 Dec 18, 0.6880): NZD has moved into a consolidation phase. No change in view from yesterday, see reproduced update below.

There is not much to add as NZD traded within a narrow range and registered an ‘inside trading day’ before closing unchanged in NY. As highlighted on Tuesday (12 Mar, spot at 0.6835), NZD is deemed to have moved into a consolidation phase and is expected to trade sideways in the coming days, likely between 0.6750 and 0.6885. Looking forward, the prospect for a break of 0.6885 first is higher than a move below 0.6750. That said, 0.6905/20 is a solid resistance zone and in view of the current lackluster momentum, a break of the resistance zone appears unlikely.

USD/JPY:  Neutral (since 09 Oct 18, 113.10): Bias is tilted to the upside but advance could be limited and short-lived.

The “mild downward pressure” that we highlighted on Monday (11 Mar, spot at 111.05) fizzled out sooner than anticipated as USD moved above the strong 111.80 resistance yesterday (14 Mar). The underlying tone has improved and the bias for the next several days is tilted to the upside. However, momentum is not strong and any advance could be short-lived and limited to a test of 112.40. On the downside, last Friday (08 Mar) low near 110.80 is expected to be strong enough to hold, at least for several days (minor support is at 111.10).

Source:
UOB Research/Market Commentary

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