Tech Targets: EUR/USD, GBP/USD, USD/JPY, AUD/USD, NZD/USD - UOB
EUR/USD: Neutral (since 15 Nov 17, 1.1795): Another dip towards the strong 1.1710 support is not ruled out just yet.
EUR touched a high of 1.1812 yesterday, just a few pips below the strong short-term resistance indicated at 1.1815 in recent updates. While downward pressure has eased off somewhat, it is too early to expect a sustained recovery. Until 1.1855 (key short-term resistance) is clearly taken out, another dip towards the strong 1.1710 support is not ruled out just yet. That said, this is a rather strong level and based on the current lackluster momentum, a sustained move below this major support seems unlikely.
GBP/USD: Neutral (since 06 Dec 17, 1.3420): Still neutral but in a lower 1.3280/1.3490 range. No change in view.
While we highlighted the ‘low odds’ for a move above 1.3550 last Friday, the sharp and swift decline from a high of 1.3521 came as a surprise. The weak daily closing has shifted the near-term pressure to the downside but any weakness from here is viewed as a broader 1.3280/1.3490 consolidation range and not the start of a sustained down-move (we previously expected a 1.3320/1.3510 consolidation range).
AUD/USD: Neutral (since 24 Nov 17, 0.7625): Immediate downward pressure but risk is limited to 0.7450.
While AUD continues to stay under pressure, we have indicated in recent updates that “we remain unconvinced that any weakness can be sustained” and highlighted that there are “stacks of strong supports from 0.7500 downwards”. So far, AUD has not been able to crack the 0.7500 support (recent low has been 0.7501) and we continue to see limited downside risk for now. From here, a dip below 0.7500 is not ruled out but any weakness is unlikely to extend below the next major support at 0.7450. That said, AUD has to reclaim 0.7580 in order to indicate that the current downward pressure has eased.
NZD/USD: Neutral (since 23 Nov 17, 0.6880): Rebound has scope to extend higher towards 0.6980.
The more than 1% surge in NZD yesterday came as a surprise. The clear break of several strong resistance levels has shifted the pressure to the upside and the current rebound appears to have scope to extend higher towards last month’s 0.6980 top. Overall, NZD is expected to stay underpinned in the coming days with 0.6850 acting as a ‘key short-term support’. Looking further ahead, a clear break above 0.6980 would be a good indication that NZD has moved into a bullish phase.
USD/JPY: Neutral (since 30 Nov 17, 112.00): Rebound has room to extend to 113.90. No change in view.
There is not much to add to last Friday’s update as we continue to hold the view that the rebound in USD “has room to extend to 113.90”. The strong daily closing on Friday reinforces our view and has increased the odds for further extension to 114.30. Overall, USD is expected to stay underpinned in the coming days with 112.80 acting as key short-term support (previously at 112.50).
Source: United Overseas Bank Global Economics & Markets Research