The US Dollar remains on the back foot for another day and nothing seems to work in its favor. What’s next? Here are technical levels for five currency pairs.
Here is their view, courtesy of eFXdata:
EUR/USD: Neutral (since 05 Jun 18, 1.1700): A stronger corrective rebound to 1.1900 is not ruled out.
We shifted from bearish to neutral on EUR on Tuesday (05 Jun, spot at 1.1700) and were of the view that EUR has moved into a consolidation phase. While we noted the “near-term bias is tilted to the upside”, we added “any advance is viewed as part of a 1.1600/1.1830 consolidation range”. The sharp and rapid advance in EUR yesterday was unexpected and in view of the vastly improved momentum outlook, 1.1830 is unlikely to be strong enough to cap the current EUR strength. In other words, we have to contend with a ‘stronger corrective rebound’ and a move to 1.1900 is not ruled out in the days ahead. On the downside, support is at 1.1730 but only a move below 1.1690 (‘key support’ level) would indicate that the current upward pressure has eased.
GBP/USD: Neutral (since 04 Jun 18, 1.3355): GBP has moved into a consolidation phase. No change in view.
We shifted from a bearish to neutral stance on Monday (04 Jun, spot at 1.3355) and held the view that GBP has moved into a consolidation/correction phase. As highlighted, the shorter-term momentum is positive and this could lead to a move higher to 1.3465. At this stage, a sustained move above this level seems unlikely (next resistance is at 1.3520). On the downside, only a move back below the ‘key support’ at 1.3295 (level previously at 1.3250) would indicate that the current mild upward pressure has eased.
AUD/USD: Bullish (since 05 Jun 18, 0.7650): Break of 0.7700 would shift focus to 0.7740.
We turned bullish AUD two days ago (see update on 05 Jun, spot at 0.7650) even though we were of the view that the 0.7700 target may not come into the picture so soon. The better than expected Australian GDP data yesterday sent AUD soaring to a multi-week high of 0.7677. In view, of the vastly improved momentum outlook, 0.7700 appears to be within reach soon and a clear break of this level would shift the focus to 0.7740. All in, the current bullish phase is deemed as intact until 0.7590 is taken out (level was previously at 0.7570).
NZD/USD: Neutral (since 22 May 18, 0.6945): Rebound could ‘overshoot’ to 0.7080.
There is not much to add as NZD finally cracked 0.7050 yesterday to hit a high of 0.7060 but the up-move was not sustained. We continue to hold the view that the current rebound in NZD could ‘overshoot’ to 0.7080. Shorter-term momentum outlook is patchy at best and at this stage, it is unclear if NZD can maintain a foothold above this level. That said, NZD is expected to stay underpinned until the ‘key support’ at 0.6980 is taken out (level unchanged from previously).
USD/JPY: Neutral (since 21 Feb 18, 107.35): Bias is for USD to probe the top of the expected 108.50/110.50 consolidation range. No change in view.
USD traded within relatively narrow ranges for the past couple of days and the muted price action offers no fresh clues. We continue to hold a neutral view even though on a shorter-term basis, the bias is for USD to probe the top of the expected 108.50/110.50 consolidation range.
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