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Thomson Reuters
Jul 04 - 01:24 AM
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
First appeared on eFXplus on Jul 03 - 11:03 PM

EUR/USD: Neutral (since 05 Jun 18, 1.1700): EUR to trade sideways to slightly higher.

EUR traded in a muted manner yesterday and registered a relatively narrow range. We continue to hold a neutral view but detect a positive underlying tone. Overall, the current movement is viewed as part of a broad consolidation phase and EUR is expected to trade sideways to slightly higher, likely within a 1.1570/1.1750 range.

GBP/USD: Neutral (since 25 Jun, spot at 1.3265): GBP has moved into a consolidation phase and is expected to trade sideways. No change in view.

There is not much to add as GBP registered an ‘inside day’ yesterday before ending lower (closed at 1.3144, -0.46%). We continue to hold the view that GBP has moved into a consolidation phase and expect sideways trading between 1.3100 and 1.3280. The bottom of the expected consolidation range at 1.3100 was tested yesterday (low of 1.3095) and while further intraday probes below this level is not ruled out, the prospect for a sustained break below the major 1.3040/50 support zone is not high.

AUD/USD: Bearish (since 20 Jun 18, 0.7385): AUD has to break 0.7300 soon or risk of a short-term low would increase.

The rapid rebound in AUD after the sharp decline on Monday (02 Jul) came as a surprise (overnight high of 0.7404). While the ‘stop-loss’ for our bearish view at 0.7420 is still intact, the strong bounce suggests that AUD may not be ready to break below the major 0.7300 support just yet. In order to reassert its bearish impetus, AUD has to crack 0.7300 within these 1 to 2 days or the risk of a short-term low would grow quickly.

NZD/USD: Bearish (since 28 Jun 18, 0.6785): Next level to focus on is at 0.6675.

NZD eked out a fresh low of 0.6688 yesterday before staging a surprisingly strong recovery. As indicated yesterday, the next key level to focus on is at 0.6675 and the rebound ahead of this level suggests that NZD may not be ready to extend its decline just yet. However, only a break of the 0.6800 ‘stop-loss’ would indicate that the current bearish phase ended. Meanwhile, NZD could trade sideways below 0.6800 for a few days before making another ‘run’ towards 0.6675.

USD/JPY:  Neutral (since 21 Feb 18, 107.35): USD to stay supported but any strength is unlikely to be sustained.

We have held the same view since Monday (02 Jul, spot at 110.75) wherein we expect “USD to stay supported but any strength is unlikely to be sustained”. USD subsequently moved above 111.00 but failed to maintain a foothold above this resistance (high of 111.06 on Monday and 111.13 yesterday). The odds for further USD strength have diminished considerably but only a break of the 110.10 ‘key support’ would indicate that the current upward pressure has eased.

Source:
UOB Research/Market Commentary

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