EUR/USD: Short-term bottom in place; EUR is expected to trade with an upside bias.
There is not much to add as EUR eked out a ‘fresh high’ of 1.1290 before easing off. The price action is in line with our expectation from last Thursday (04 Apr, spot at 1.1245) wherein EUR is expected to “trade with an upside bias” towards 1.1300. Despite making a ‘fresh’ high, upward momentum remains lackluster and while EUR could edge above 1.1300 in the coming days, we continue to hold the view that the “prospect for EUR to move to the next resistance at 1.1330 is deemed as low”. On the downside, only a break of the 1.1220 ‘key support’ would indicate that the current upward pressure has eased.
GBP/USD: GBP is expected to trade sideways within a broad range.
There is not much to add as GBP traded within a relatively narrow range between 1.3050 and 1.3107 and registered an ‘inside trading day’. We have held the same view more than a week (since last Thursday, 04 Apr) that GBP is “expected to trade sideways within a broad range”. After the quiet price action over the past couple of days, a 1.2950/1.3150 range is likely enough to contain the movement in GBP from here (adjusted from 1.2900/1.3200 previously).
AUD/USD: Break of 0.7190 would suggest AUD is ready to tackle the Feb’s peak of 0.7210.
We highlighted yesterday (11 Apr), that “while momentum indicator has ticked up, it is too early to expect a sustained rise in AUD”. We added, “only a clear break of the top of the currently expected 0.7040/0.7190 sideway trading range would suggest that AUD is ready to tackle the Feb’s peak near 0.7210”. Upward momentum appears to have fizzled with the subsequent rapid retreat in AUD yesterday (0.66%) but only a break of 0.7080 would indicate that the current upward pressure has eased. Until then, AUD could attempt to move towards 0.7190 one more time but the prospect for such a move has diminished.
NZD/USD: Downward momentum has been reinvigorated, break of 0.6700 is not ruled out.
The weak phase in NZD that started late last month remains intact as NZD dropped sharply after touching a high of 0.6774 on Wednesday (10 Apr). The high was just below our 0.6785 ‘key resistance’ and as highlighted in recent updates, only a break of 0.6785 would indicate that the current downward pressure has eased. Meanwhile, the rapid decline yesterday (11 Apr) has ‘reinvigorated’ the downward momentum and in the next few days, a break of the solid support at 0.6700 is not ruled out (we previously held the view that the prospect for a drop below the 0.6700/20 support zone is not high). Looking ahead, a break 0.6700 would suggest there is room for further NZD weakness to 0.6660. On the upside, the ‘key resistance’ remains unchanged at 0.6785.
USD/JPY: USD has moved into a sideway-trading phase. No change in view from yesterday, see reproduced update below.
USD dropped to a low 110.83 before recovering to close slightly lower for the day (NY close of 111.00, -0.10%). As highlighted yesterday, USD is still in a “sideway-trading phase”. For the next one-week or so, a 110.50/112.00 range should be enough to contain the price action in USD.