Welcome Guest:
Sign Up
Derived real-time data in partnership with:
Thomson Reuters
Jun 14 - 01:24 AM
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
First appeared on eFXplus on Jun 14 - 12:00 AM

EUR/USD:

24-HOUR VIEW EUR could test 1.1250 first before a more robust recovery can be expected. We expected EUR to “extend its decline” yesterday but were of the view the “strong support at 1.1250 is unlikely to come under threat for now”. EUR subsequently dipped to 1.1266 before rebounding slightly. While there is hardly any pick-up in momentum, the underlying tone is still on the soft side and this could lead to a test of 1.1250 first before a more robust recovery can be expected. For today, a sustained decline below 1.1250 is not expected. On the upside, if EUR were to move above 1.1320, it would indicate that the current mild downward pressure has eased (minor resistance is at 1.1300).

1-3 WEEKS VIEW Diminished odds for further EUR strength. No change in view from yesterday, see reproduced update below. Upward momentum has deteriorated further and a breach of the 1.1250 ‘key support’ would not be surprising.

The relatively steep decline of -0.37% yesterday (12 Jun) has further dented further the fragile upward momentum and the chance EUR to test the strong 1.1380 resistance appears to be slipping away. However, only a breach of the 1.1250 ‘key support’ (no change in level) would indicate that the ‘positive phase’ that started last Tuesday (04 Jun, spot at 1.1245) has ended. In order to revive the current flagging momentum, EUR has to move and stay above 1.1335 within these 1 to 2 days or a break of the ‘key support’ would not be surprising. Looking ahead, a move below 1.1250 would indicate EUR could trade sideways for a period (a sustained decline in EUR is not expected).

GBP/USD: 

24-HOUR VIEW Despite waning momentum, there is still scope for GBP to test 1.2650 first. Yesterday, we held the view that GBP is” expected to move lower but any weakness is likely limited to a test of 1.2650”. While GBP weaken as expected, it recovered after touching 1.2662. Downward momentum appears to be struggling to maintain its traction but there is still scope for GBP to test 1.2650 first. That said, we still do not expect a sustained decline below this level (next support is at 1.2610). On the upside, only a move above 1.2730 would indicate that a short-term bottom is in place (minor resistance is at 1.2710).

1-3 WEEKS VIEW GBP is expected to trade sideways. The ‘sideway-trading’ phase that started last Tuesday (04 Jun, spot at 1.2665) is still clearly intact as GBP traded well within our expected 1.2570/1.2770 range since then. Momentum indicators are mostly neutral and we continue to expect GBP to trade within the range mentioned above. Looking ahead, barring a break of 1.2570, the current ‘sideway-trading’ phase is likely to be resolved by a move above the top of the expected range.

AUD/USD: 

24-HOUR VIEW AUD could edge below 0.6900 but next support at 0.6865 is not expected to come into the picture. We highlighted yesterday “further AUD weakness is not ruled out but oversold conditions suggest 0.6900 is unlikely to break”. The subsequent drop in AUD came within one pip of breaking 0.6900 as it touched 0.6901. While the current decline is still in oversold territory, there is no sign of stabilization just yet. From here, barring a move above 0.6940, AUD could edge below 0.6900 but the next support at 0.6865 is not expected to come into the picture (there is another support at 0.6885).

1-3 WEEKS VIEW AUD is expected to trade sideways. We shifted our narrative for AUD yesterday (13 Jun, spot at 0.6930) from to “trade with an upside bias” to “trade sideways”. As highlighted, while a test of last month’s 0.6865 low is not ruled out, any weakness is viewed as part of 0.6865/0.6990 range. At this stage, we see low odds for AUD to move below 0.6865 is a sustained manner.

NZD/USD: 

24-HOUR VIEW NZD could continue to drift lower but is unlikely to threaten the 0.6530 support. Instead of trading sideways as we expected yesterday, NZD drifted lower to 0.6556 before ending the day on a soft note at 0.6564. While downward momentum is lackluster, NZD is still under mild downward pressure and could continue to drift lower but is unlikely to threaten the 0.6530 support. Resistance is at 0.6580 followed by 0.6600.

1-3 WEEKS VIEW NZD is expected to trade sideways. There is not much to add to the update from Wednesday (12 Jun, spot at 0.6585). As highlighted, NZD is deemed to have moved into a ‘sideway-trading’ phase. Near-term, the underlying tone is on the soft side and this could lead to a probe of the bottom of the current sideway trading range of 0.6530/0.6630. Looking ahead, if NZD were to register a NY closing below 0.6530, it would indicate that it is ready to retest the year-to-date low at 0.6482. At this stage, the prospect for such a move is not high.

USD/JPY:

24-HOUR VIEW USD could test 108.00 but a sustained decline below this level is unlikely. USD traded between 108.15 and 108.53 yesterday, lower and narrower than our expected 108.25/108.75. The underlying tone has weakened somewhat and this could lead to a test of 108.00. However, lackluster momentum suggests a sustained decline below this level is unlikely. Resistance is at 108.55 followed by 108.75.

1-3 WEEKS VIEW Diminished odds for further USD weakness. After the sharp drop in USD, we indicated last Monday (03 Jun, spot at 108.30) that USD “has move into a negative phase” and added, “ the weakness could extend to 107.70, 107.50”. After touching 107.80 last Wednesday (05 Jun), USD has not been able to make much headway on the downside as it traded mostly sideways for the past several days. The consolidation has led to a rapid loss in momentum and the odds for further USD weakness have diminished. However, only a breach of the 109.05 ‘key resistance’ (no change in level) would indicate that the ‘negative phase’ has ended. Until then, there is still chance, albeit a slim one that USD move to the 107.50/107.70 support zone

Source:
UOB Research/Market Commentary

Subscription

  • eFXplus
  • End-user license agreement (EULA)

About

  • About
  • Contact Us

Legal

  • Terms of Service
  • Privacy Policy
  • Disclaimer
!