EUR/USD: Neutral (since 29 May 17, 1.1180): Increasing risk of a break below 1.1105/10.
EUR traded quietly yesterday and we continue to hold the view that the downside risk is greater. However, as highlighted several times in recent updates, 1.1105/10 is a rather strong support and only a clear break below this level would indicate that a sustained move towards 1.1025 has started. On the upside, a NY closing above 1.1175 would indicate that the downward pressure has eased.
GBP/USD: Bearish (since 13 Jun 17, 1.2670): Approaching strong support level, shorts to take half profit at 1.2580/85.
GBP traded in a surprisingly tight 37 pips range yesterday, the narrowest 1-day range in more than 2 months. At this stage, we view the consolidation as a prelude for another push lower but as indicated in the update on Wednesday, 1.2580/85 is a major support and those who are shorts should look to exit half of their position. A move above the stop-loss at 1.2720 would indicate that the bearish phase that started more than a week ago has ended
AUD/USD: Neutral (since 21 Jun 17, 0.7580): In a 0.7525/0.7630 range. No change in view, see update from yesterday below.
We shifted from a bullish to neutral stance yesterday and were of the view that AUD has moved into a consolidation phase. There is no change to the view but as highlighted, “the immediate bias is on the downside and the odds for a move to 0.7525 first are markedly higher than for a move to 0.7630”. From here, an intraday dip below 0.7525 is not ruled but based on the current momentum, a sustained move below this level is not expected. On the upside, 0.7600 is a strong resistance ahead of 0.7630.
NZD/USD: Neutral (since 16 Jun 17, 0.7205): In a 0.7170/0.7275 range. No change in view, see update from yesterday below.
NZD spiked above the top of the expected 0.7170/0.7275 consolidation range earlier this morning with a high of 0.7280. The choppy swing post-RBNZ announcement reinforces our current neutral view for NZD (we have been neutral since last Friday) and we continue to expect this pair trade between 0.7170 and 0.7275 for now.
Bullish (since 20 Jun 17, 111.65): Anticipating a break of 112.10 for a move to 112.80.
USD touched a low of 110.92 yesterday, several pips above the stop-loss for our bullish view at 110.85. While upward momentum has been dented, the overall technical outlook still appears positive and we continue to anticipate a move above the major 112.10 resistance. However, this has to happen soon as a prolonged consolidation at these levels would lead to a rapid loss in momentum.