Tech Targets: EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY - UOB
EUR/USD: Turn to Bearish: Outlook turned bearish for a modest target of 1.0810.
The neutral phase that has been in place for about 2 weeks ended last Friday. As highlighted in recent updates, a daily closing below the key 1.0990 would indicate the start of a sustained down-move in EUR.
That said, downward momentum is not very strong at this stage and we have a modest target of 1.0810. In order to maintain the current momentum, any rebound should not move above 1.1030.
GBP/USD: Bearish: Extension to 1.3800 not ruled out but odds are not high.
GBP eked out a fresh low of 1.3854 last Friday and as pointed out recently, severely oversold conditions coupled with slowing downward momentum suggest low of odds of extension lower to 1.3800 (partial profit taken at 1.3930).
However, confirmation of a short-term low is only upon a move back above 1.4040 (adjusted lower from 1.4075).
AUD/USD: Neutral; pull-back could extend to 0.7065, 0.7030.
The failure to break above the major 0.7260 resistance coupled with the move below the key 0.7130 support indicates that the bullish phase in AUD has ended without meeting the 0.7325/30 target. While the outlook is viewed as neutral now, the current movement is likely the early stages of a pull-back which has room to move lower to 0.7065 with a chance of extending to 0.7030.
From here, AUD has to move clearly below 0.7030 to indicate the start of a fresh bearish phase towards 0.6825/30. Resistance is at 0.7185 followed by the now very strong and key level of 0.7260.
NZD/USD: Turn to Neutral: short-term weakness likely limited to 0.6500.
The move above the key 0.6750 resistance late last week was clearly a false break as we witnessed a sharp reversal from a high of 0.6775. The expectation for further NZD strength was clearly wrong and from here, the outlook is viewed as neutral. However, short-term downward momentum is improving but at this stage, any further weakness is likely limited to 0.6500.
USD/JPY: Neutral: Downward pressure has eased; in a broad 111.00/114.50 range now.
While USD continues to move higher, the outlook is still viewed as neutral unless there is a clear break above the key 114.50 resistance. In the meanwhile, this pair is expected to continue to trade in a choppy manner but likely holding between 111.00 and 114.50.
That said, based on the current momentum, a retest of the 111.00 low appears unlikely.
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