EUR/USD: EUR has moved into a consolidation phase.
There is not much to add as EUR traded in a quiet manner yesterday and within a narrow range of 1.1234/1.1263 before ending the day just a tad higher at 1.1255 (+0.08%). As highlighted yesterday (22 Apr), EUR has likely “moved into a consolidation phase” and is expected to trade sideways for a couple of weeks, expected to be within a 1.1200/1.1300 range. Looking ahead, only a move above the major 1.1330 resistance level would suggest EUR is ready to challenge the 1.1400 level even though this is unlikely to happen anytime soon.
GBP/USD: GBP is expected to continue to trade sideways.
Even though it was Easter Monday yesterday (22 Apr), the registered daily range of 23 pips range (between 1.2975 and 1.2998) still came as a surprise. Besides Christmas Day (when Tokyo is the only major market that is open), the extremely tight 23 pips range appears to be the smallest one-day range in GBP for at least the past 15 years. For now, we continue to expect GBP to “trade sideways” even though as highlighted in recent updates, the pick-up in downward pressure suggests GBP could probe the 1.2950 level. Looking ahead, a break 1.2950 would indicate that a move towards 1.2900 (and possibly below this level) has started.
AUD/USD: AUD is under mild downward pressure but any weakness is viewed as part of a broad range.
There is not much to add to the update from yesterday (22 Apr). As highlighted, last week’s 0.7206 peak is likely a short-term top. Downward pressure has improved and the immediate bias is tilted to the downside. That said, it is too early to expect a sustained decline. From here, AUD is expected to stay under mild downward pressure but any weakness is viewed as part of a broad 0.7100/0.7200 range and a sustained drop below 0.7100 appears unlikely.
NZD/USD: Negative phase has been ‘revived’; NZD is expected to move below 0.6660. No change in view from yesterday, see reproduced update below.
There is not much to add to the update from last Thursday (18 Apr). As highlighted, “Oversold short-term indicators suggest NZD could consolidate for a few days first but as long as the 0.6785 ‘key resistance’ remains intact, NZD is expected to move below 0.6660. Further weakness to 0.6591 is not ruled out but at this stage, the odds are not that high”. The only change is the ‘key resistance’ level, which has moved lower to 0.6750 from 0.6785.
USD/JPY: USD is expected to trade with a positive bias but 112.60 could be out of reach. No change in view from yesterday, see reproduced update below.
Volatility continues to plummet as USD traded within a grand total of 41 pips range last week (between 111.75 and 112.16). This is the narrowest 1-week range since Jan 2012. The price action offers no fresh clues even though we continue to detect a slightly positive undertone. That said, as highlighted previously, the 112.60 resistance is likely out of reach. On the downside, only a break of 111.40 (no change in ‘key support’ level) would indicate that the current mild upward pressure has eased.