EUR/USD: Neutral (06 Jul 17, 1.1350): Shift to bullish again if NY closing is above 1.1445.

EUR closed lower last Friday and the key resistance at 1.1445 was unthreatened. As indicated in recent updates, only a NY closing above this level would shift the current neutral outlook for EUR to bullish again. This scenario still appears likely as long as EUR can hold above 1.1340 within these few days.

GBP/USD: Neutral (since 05 Jul 17, 1.2925): In a 1.2800/1.2975 range.

We indicated last Friday that GBP has to break clearly above 1.3030 to indicate that it has moved into a bullish phase again but apportioned low odds for such a move. However, the quick and sharp drop that took out 1.2890 has put paid to the scenario. While the outlook is still neutral, GBP has likely moved into a consolidation phase even though the immediate bias is for a probe lower towards the bottom of the expected 1.2800/1.2975 sideway trading range.

AUD/USD: Neutral (since 05 Jul 17, 0.7610): In a narrower 0.7540/0.7660 range.

AUD closed on a positive note last Friday and while shorter-term downward momentum has eased, it is too early to expect a sustained recovery. In other words, there is no change to the current neutral outlook for AUD and we continue to expect this pair trade sideways between 0.7540 and 0.7660.

NZD/USD: Neutral (since 16 Jun 17, 0.7205): Back in a 0.7230/0.7350 range.

The current neutral phase for NZD that started more than 3 weeks ago is still intact. There are no early signs that the consolidation phase is ending soon and we continue to expect this pair to trade sideways between 0.7230 and 0.7350 for now.

USD/JPY: Bullish (since 20 Jun 17, 111.65): Above 114.35 shift focus to 115.50.  

The bullish phase in USD is entering its third week and the strong daily closing above 113.55 last Friday suggests that there is scope for a break above 114.35, the high back in May. We indicated last Thursday that in order for USD to maintain its bullish impetus, it has to ‘move and stay above 113.55’ and now that the condition is met, the odds for further USD strength appear to be quite high. From here, a break above 114.35 could lead to acceleration higher as the next significant resistance is much further up at 115.50 (high in March). We have suggested those who are long USD from 111.65 to exit half of their position at 112.75 previously. Those with remaining long should utilize 113.00 as a stop-loss level.

Source: United Overseas Bank Global Economics & Markets Research

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