EUR/USD: EUR is still under pressure, next support at 1.1070.
EUR eked out a ‘fresh’ low of 1.1110 last Friday before rebounding quickly to end the day slightly higher at 1.1148 (+0.16%). The price action is not exactly surprising as we highlighted on Friday that oversold short-term conditions could lead to a “few days of consolidation first”. Overall, EUR is expected to stay under pressure until it can break above the 1.1210 ‘key resistance’ (no change in level). That said, it is unclear at this stage if the next major support at 1.1070 would come into the picture.
GBP/USD: GBP remains under pressure but Feb’s low of 1.2773 may be out of reach.
GBP briefly touched 1.2876 before rebounding to end the day slightly higher at 1.2919 (+0.16%). While GBP is still under pressure, momentum indicators are showing sign of ‘tiring’ and as highlighted last Thursday (25 Apr, spot at 1.2905), the next major support at 1.2773 “may be out of reach” this time round. However, only a break of the 1.2970 ‘key resistance’ (no change in level) would indicate that a short-term bottom is in place.
AUD/USD: A NY close below 0.7005 would open up the way for AUD to move to 0.6950.
AUD staged a relatively robust rebound last Friday and touched 0.7062 before ending the day on a firm note at 0.7035 (+0.27%). While we have been holding a ‘negative’ view on AUD since early last week, we noted that only “a NY close below 0.7005 would open up the way for AUD to move to 0.6950”. AUD dropped to 0.6988 on Thursday (14 Apr) but it rebounded and did not close below 0.7005. This coupled with the strong bounce on Friday indicates downward momentum has waned. However, confirmation of a short-term bottom is only upon a move above 0.7100. In order to revive the current flagging momentum, AUD has to move and stay below 0.7020 within these few days or the risk of a short-term bottom would increase quickly.
NZD/USD: Short-term bottom in place, NZD has likely moved into a consolidation phase.
The month-long negative phase in NZD finally ended as it edged above the 0.6680 ‘key resistance’ last Friday (high of 0.6681). The piece action was not exactly as unexpected as we indicated on Thursday (25 Apr, spot at 0.6595) that “the current decline is deep in oversold territory now and it is unclear at this stage whether NZD could extend lower to 0.6485”. To put it another way, last Thursday 0.6581 low is deemed as a short-term bottom. That said, after the month-long decline, it is too early to expect a major reversal. From here, NZD has likely moved into a consolidation phase and is expected to trade sideways to slightly higher. Expected range for the next couple of weeks; 0.6610/0.6730
USD/JPY: USD has likely moved into a consolidation phase.
USD traded within an ‘inside day’ last Friday (26 Apr) and ended the day little changed at 111.58 (-0.03%). We continue to hold the same view as highlighted earlier on Friday wherein “USD has likely moved into a consolidation phase”. In other words, USD is expected to trade sideways for the next couple of weeks, likely within a broad 111.00/112.30 range.