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Thomson Reuters
Apr 11 - 09:48 AM
Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
First appeared on eFXplus on Apr 11 - 08:24 AM

EUR/USD: Short-term bottom in place; EUR is expected to trade with an upside bias. No change in view from yesterday, see reproduced update below. Note that the 1.1220 ‘key support’ is still intact (low of 1.1228).

EUR touched a 2-week high of 1.1285 yesterday before easing off quickly to end the day little changed at 1.1261 (+0.02%). The price action is in line with our expectation from last Thursday (04 Apr, spot at 1.1245) wherein last Tuesday’s (02 Apr) low of 1.1181 is a shortterm bottom and EUR has moved into a ‘corrective recovery’ phase and is expected to “trade with an upside bias” towards 1.1300. While it is too early to call for an end to the ‘recovery phase’, short-term momentum indicators are beginning to wane and a break of 1.1220 (level previously at 1.1200) would indicate that the current upward pressure has eased. To put it another way, the prospect for EUR to move to the next resistance at 1.1330 is still deemed as low (from here, 1.1300 is already quite a solid level).

GBP/USD: GBP is expected to trade sideways within a broad range.

There is not much to add as GBP traded sideways yesterday (between 1.3049 and 1.3130). From the perspective of a few weeks, we continue to hold the view that GBP is “expected to trade sideways within a broad range”, likely between 1.2900 and 1.3200 (same view since last Thursday, 04 Apr).

AUD/USD: Break of 0.7190 would suggest AUD is ready to tackle the Feb’s peak of 0.7210.

AUD surged and registered the largest 1-day gain in 10 weeks as it hit a high of 0.7175 (NY close of 0.7171, +0.67%). The price action was not exactly expected as AUD has traded in a quiet manner since late-March. While momentum indicator has ticked up, it is too early to expect a sustained rise in AUD. Only a clear break of the top of the currently expected 0.7040/0.7190 sideway trading range would suggest that AUD is ready to tackle the Feb’s peak near 0.7210 (and possibly 0.7250). To put it another way, yesterday’s price action serves as an ‘early indication’ that AUD is ready to move higher in a sustained manner.

NZD/USD: Prospect for a sustained drop below the 0.6700/20 support zone is not high. There is no change in view from yesterday. See reproduced update below. Short-term indicators suggest that a break of the 0.6785 ‘key resistance’ would not be surprising.

There is not much to add as NZD traded within a tight 20 pips range (narrowest 1-day range this year) before closing unchanged at 0.6743. For now, the weak phase in NZD that started from late last month is still deemed as intact but as highlighted since last Wednesday (03 Apr, spot at 0.6750), the “prospect for a sustained drop below the 0.6700/20 support zone is not high”. Only a break of the 0.6785 ‘key resistance’ (no change in level) would indicate that the current downward pressure has eased.

USD/JPY: USD has moved into a sideway-trading phase.

USD dropped to a low 110.83 before recovering to close slightly lower for the day (NY close of 111.00, -0.10%). As highlighted yesterday, USD is still in a “sideway-trading phase”. For the next one-week or so, a 110.50/112.00 range should be enough to contain the price action in USD.

Source:
UOB Research/Market Commentary

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