EUR/USD: Neutral (since 21 Aug 18, 1.1485): Dip below 1.1300 would not be surprising but break of 1.1265 seems unlikely.
After testing the top of our expected 1.1300/1.1440 consolidation range on Monday (high of 1.1443 on 10 Dec), EUR came close to the bottom of the range with an overnight low of 1.1302. As highlighted earlier yesterday (11 Dec, spot at 1.1330), the underlying tone has weakened and a dip below the strong 1.1300 level would not be surprising. However, lackluster momentum suggests a break of the next support at 1.1265 is unlikely. Looking forward, a clear break of 1.1265 would suggest EUR is ready to tackle the year’s low at 1.1213.
GBP/USD: Neutral (since 21 Aug 18, spot at 1.2795): GBP is under pressure but next support at 1.2400 may not come so soon.
There is not much to add to yesterday’s (11 Dec, spot at 1.2565) update. As highlighted, downward momentum has picked up strongly and GBP is still clearly under pressure. That said, the rapid decline over the past several days appears to be running ahead of itself and we do not expect the next major support at 1.2400 to come into the picture so soon. On the upside, only a move above the 1.2650 ‘key resistance’ (level was at 1.2680 yesterday) would indicate that the current downward pressure has eased.
AUD/USD: Neutral (since 13 Sep 18, spot at 0.7170): AUD is still under pressure but a break of 0.7130 would come as a surprise.
AUD traded within a relatively narrow range between 0.7185 and 0.7225 yesterday and registered an ‘inside day’. The price action offers no fresh clue and we continue to hold the view the recent sharp decline in AUD is running ahead of itself. As highlighted in recent updates, while AUD is still under pressure, a break of the major 0.7130 support would come as a surprise. All in, AUD has to reclaim the 0.7270 ‘key resistance’ (no change in level) in order to indicate that the current weak phase has stabilized.
NZD/USD: Neutral (since 07 Dec 18, 0.6880): NZD has moved into a consolidation phase.
NZD traded mostly sideways for the past few trading days and there is no much to add. The current movement is still viewed as part of a consolidation phase. The “near-term downward bias” highlighted in recent updates appears to have dissipated. In other words, NZD is expected to continue to trade sideways for now, likely between 0.6820 and 0.6930 (same range as highlighted last Friday).
USD/JPY: Neutral (since 09 Oct 18, 113.10): USD has moved into a consolidation phase.
There is not much to add to yesterday’s (11 Dec, spot at 113.20) update. As highlighted, USD has likely move into a consolidation phase and is expected to trade sideways, likely within a broad 112.40/113.90 range.