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Thomson Reuters
Jun 06 - 09:48 AM
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
First appeared on eFXplus on Jun 05 - 11:00 PM

EUR/USD: Neutral (since 05 Jun 18, 1.1700): EUR has moved into a consolidation phase.

We just shifted from a bearish to neutral stance on EUR yesterday and there is no change to the view. As highlighted, EUR has likely moved into a consolidation phase and is expected to trade sideways for now. Near-term, the bias is tilted to the upside but any advance is viewed as part of a 1.1600/1.1830 consolidation range and not the start of a sustained up-move.

GBP/USD: Neutral (since 04 Jun 18, 1.3355): GBP has moved into a consolidation phase.

We shifted from a bearish to neutral stance on Monday (04 Jun, spot at 1.3355) and held the view that GBP has moved into a consolidation/correction phase. As highlighted, the shorter-term momentum is positive and this could lead to a move higher to 1.3465. At this stage, a sustained move above this level seems unlikely (next resistance is at 1.3520). On the downside, only a move back below the ‘key support’ at 1.3295 (level previously at 1.3250) would indicate that the current mild upward pressure has eased.

AUD/USD: Bullish (since 05 Jun 18, 0.7650): Major 0.7700 resistance may not come into the picture so soon. We just turned bullish AUD yesterday and there is no change to the view

While we have held a positive AUD view since last Thursday (31 May, spot at 0.7575) and indicated that the “immediate bias is for a test of 0.7605”, the abrupt surge higher yesterday that easily took out not only 0.7605 but the major 0.7645 level was not exactly expected (note that AUD closed higher by +1.05% yesterday, the second largest 1-day gain this year). The clear break of the major 0.7645 level suggests the start of a bullish phase even though AUD is unlikely able to maintain the current pace of gains. There is another major resistance at 0.7700 and this level may not come into the picture so soon. On a shorter-term note, severely overbought conditions could lead to a pull-back first but only a break below 0.7570 would indicate that our bullish view is wrong.

NZD/USD: Neutral (since 22 May 18, 0.6945): Rebound could ‘overshoot’ to 0.7080. No change in view.

We have held the same view since last Thursday (31 May, spot at 0.6970) that the recovery in NZD “has room to extend to 0.7050”. NZD hit an overnight high of 0.7048 before easing off slightly. The improved undertone suggests that the current rebound could ‘overshoot’ to 0.7080 but at this stage, it is unclear whether NZD can maintain a foothold above this level. On the downside, only a break below 0.6980 (‘key support’ previously at 0.6940) would indicate that the current upward pressure has eased

USD/JPY: Neutral (since 21 Feb 18, 107.35): Bias is for USD to probe the top of the expected 108.50/110.50 consolidation range.

USD traded within relatively narrow ranges for the past couple of days and the muted price action offers no fresh clues. We continue to hold a neutral view even though on a shorter-term basis, the bias is for USD to probe the top of the expected 108.50/110.50 consolidation rang.

Source:
UOB Research/Market Commentary

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