EUR/USD: Neutral (since 05 Jun 18, 1.1700): A stronger corrective rebound to 1.1900 is not ruled out. No change in view.
We have held the same view since last Thursday (07 Jun, spot at 1.1775) that “a stronger corrective rebound to 1.1900 is not ruled out”. Since then, EUR has been trading sideways, holding roughly between 1.1725 and 1.1840. While the mild upward pressure has eased somewhat, we still see chance for a stronger recovery as long as the ‘key support’ at 1.1690 is intact. That said, EUR has to start moving higher within these few days as a prolonged consolidation around these levels would lead to a rapid loss in upward pressure. Looking ahead, a breach of 1.1690 would not change the current neutral outlook but indicate that EUR would continue to trade sideways within a broad range.
GBP/USD: Neutral (since 04 Jun 18, 1.3355): GBP has moved into a correction phase.
GBP dipped to a low of 1.3309 yesterday before rebounding quickly to end the day little changed at 1.3377 (+0.03%). The price action is line with our view wherein we expect GBP to trade sideways between 1.3250 and 1.3470. That said, the underlying undertone has improved somewhat and the bias for the next several days is for GBP to grind higher towards 1.3470. At this stage, any GBP strength is viewed as part of a 1.3290/1.3470 consolidation range (narrowed from the 1.3250/1.3470 range expected previously) and not the start of a sustained up-move.
AUD/USD: Neutral (since 11 Jun 18, 0.7600): AUD has moved into a consolidation phase.
AUD tested the bottom of the expected 0.7530/0.7680 consolidation range yesterday (exact low of 0.7530) before rebounding quickly. The price action reinforces our current neutral view and we continue to expect AUD to trade sideways for now. That said, the undertone has weakened somewhat and a dip below 0.7530 is not ruled but any weakness is viewed as part of a 0.7500/0.7650 consolidation range (lower from the 0.7530/0.7680 range expected previously) and a sustained period of AUD weakness is not expected.
NZD/USD: Neutral (since 22 May 18, 0.6945): NZD to trade sideways for now.
There is not much to add as NZD briefly touched 0.7053 yesterday, holding just below the top of our expected 0.6950/0.7060 sideway consolidation range. The swift pull-back reinforces our neutral view and we continue to expect NZD to trade sideways for now, likely within a 0.6950/0.7060 range.
USD/JPY: Neutral (since 21 Feb 18, 107.35): Positive outlook could lead to a test of 111.00. No change in view.
USD edged above the 110.50 resistance at the time of writing (high of 110.54) and as highlighted yesterday, a clear break of this level would indicate that the current USD strength could test the 111.00 resistance. Further extension to last month’s top near 111.40 is not ruled out but the odds for such a move are not high (momentum indicators appear to be lackluster at this stage). Overall, we hold a ‘positive’ view for USD (especially for the next few days) and only a break of the ‘key support’ at 109.70 (level previously at 109.40) would indicate that the current upward pressure has eased.