EUR/USD: Neutral: Bullish again if NY closing above 1.1300.

We have held the same view that EUR is “bullish if NY closing is above 1.1300” since last Thursday, 01 Jun. The price action since then has been rather muted as EUR continues to trade with a 1.12 handle. It looks like ECB’s meeting tomorrow will decide whether there will be a sustained break above 1.1300. Based on the current assessment, this appears to be a more likely scenario, as long as the short-term key support at 1.1220 is intact.

GBP/USD: Neutral: In a 1.2800/1.3010 range.

There is not much to add as GBP continues to trade sideways. We have held the same view that this pair is trading between 1.2800 and 1.3010 since last Thursday. Volatility seems to be easing and we should be able to narrow the range within these couple of days. At this stage, there is no indication that GBP is ready to stage a ‘breakout’. Looking further ahead, UK election on Thursday is expected to hold the key for the next sustained directional move.

AUD/USD: Shift from neutral to bullish: immediate target of 0.7575, followed by 0.7615. 

Rapidly improving upward momentum coupled with the strong daily closing suggests that AUD has moved into a bullish phase. The immediate target is for a move to 0.7575 but extension to 0.7610/15 would not be surprising. In order to maintain the current momentum, any pull-back should not move back below 0.7455.

NZD/USD: Bullish: Still bullish but odds for extension to 0.7245 are not high.

We indicated on Monday, 05 Jun that “the next bullish leg has started for 0.7170 followed by 0.7200”. In line with expectation, NZD surged to hit a high of 0.7206 yesterday. While the bullish phase that started two weeks ago is still intact, the rally is approaching extreme levels and the odds for further extension towards the next resistance at 0.7245 are not high. That said, only a move back below 0.7130 would indicate that the bearish phase has ended. In the meanwhile, NZD could trade sideways at these higher levels.

USD/JPY: Shift from neutral to bearish: Immediate target of 108.70.

The call ”to wait for a NY closing below 110.00 before adopting a bearish stance” was ill-timed as USD sliced through 110.00 and plunged to an overnight low of 109.20. The outlook is clearly bearish with an immediate target of 108.70.

Source: United Overseas Bank Global Economics & Markets Research

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