EUR/USD: Neutral: Likely in a broad 1.1330/1.1495 range.
As mentioned yesterday, while short-term momentum has eased off, it is not enough to indicate that a short-term top is in place. Hence, we continue to hold a positive view for EUR.
Last week’s peak near 1.1435/40 is clearly a strong resistance but even if EUR can surmount this level, the October 2015 peak of 1.1495 is a major resistance and this level would not be easy to overcome. On the downside, support is at 1.1330 followed by 1.1270.
GBP/USD: Neutral: In a broad 1.4050/1.4370 range.
We have been neutral on GBP since 23 March and the recent choppy movement reinforces our view. The outlook remains unclear but short-term momentum is improving and the risk appears to be tilted to the downside.
That said, 1.4050 is a major support and GBP has to move clearly below this level before a sustained down-move can be expected. Resistance is at 1.4240 followed by 1.4370. The late March high near 1.4450 is unlikely to come into play, at least not for the next few days.
AUD/USD: Neutral: Pull-back could extend lower to 0.7475/80.
The break below our 0.7550 stop-loss indicates that we have seen a short-term top at 0.7723 last week (our target at 0.7740 was not met). The current pull-back appears to have scope to extend lower to test the recent low at 0.7475/80.
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Overall, this pair is expected to remain under pressure from here unless it can reclaim 0.7635 in the next 1 to 2 days.
NZD/USD: Neutral: In a broad 0.6720/0.6930 range.
We just turned neutral yesterday and there is no change to the view.
We have likely seen a short-term top last week and the current movement is viewed as the start of a consolidation phase and we expect this pair to trade in a neutral 0.6720/0.6930 range from here.
USD/JPY: Bearish: Likely seen bulk of weakness.
USD broke below last month 110.65 low to touch a 109.94. While the outlook has turned bearish, it is likely that we have seen a bulk of the USD weakness even though another leg lower to 109.50 will not be surprising.
Resistance is at 111.00 but only a move above 111.60 would indicate that a short-term low is in place.