EUR/USD: Neutral (since 05 Jun 18, 1.1700): Underlying tone has improved further but too early to expect a sustained up-move.
We highlighted yesterday (05 Jul, 1.1660) that we detected an improvement in the underlying tone and the near-term bias is for EUR to “test the top end of the expected 1.1570/1.1750 consolidation range”. EUR subsequently hit an overnight high 1.1720 and despite the pull-back from the top, the underlying tone has improved further. In other words, while the bigger picture still suggests the current outlook for EUR is neutral, there is scope for a move to 1.1750 within the next few days. That said, it is too early to expect a sustained up-move and the next resistance at 1.1790 is unlikely to come into the picture for now. On the downside, only a move back 1.1620 would indicate that the current mild upward bias has eased.
GBP/USD: Neutral (since 25 Jun, spot at 1.3265): GBP has moved into a consolidation phase and is expected to trade sideways. No change in view.
We have held the same view since Monday (02 Jul, spot at 1.3200) wherein GBP has likely moved into a consolidation phase and is expected to trade sideways within a 1.3100/1.3280 range. After testing the bottom of the range with a low of 1.3095 during NY hours on Monday, GBP has rebounded and the improved undertone suggests that it is ready to test the top of the range at 1.3280. At this stage, a clear break above this rather strong resistance seems unlikely. That said, if GBP can break and hold above this level, it would be a good indication that a move towards 1.3400 has started.
AUD/USD: Neutral (since 05 Jul 18, 0.7380): AUD has moved into a consolidation phase.
We just turned neutral yesterday (05 Jul, spot at 0.7380) and there is no change to the view. As indicated, the current movement is viewed as the early stages of a consolidation phase and AUD is expected to trade sideways for now, likely within a 0.7320/0.7450 range.
NZD/USD: Shift from bearish to NEUTRAL: NZD has moved into a consolidation phase.
NZD just edged above the 0.6800 ‘stop-loss’ at the time of writing (high of 0.6802) and the bearish phase that started last week has ended. NZD has likely made a short-term low at 0.6688 on Tuesday (03 Jul) and the current movement is viewed as the start of consolidation phase. Near-term, the bias is tilted to the upside but any NZD strength is viewed as part of a 0.6730/0.6850 sideway trading range and not the start of a sustained up-move.