EUR/USD: Bearish: Room to extend lower but 1.0820 is a major support.
The rapid decrease in volatility was surprising but the overall undertone for EUR is still negative and we continue to target a move to the major level of 1.0820. However, this is a very strong support and may not be easy to crack.
GBP/USD: Bearish: A move to 1.3000 would not be surprising.
As highlighted yesterday, 1.3225/30 is a tenuous support and a break of this level would shift the focus to 1.3000. GBP dropped rapidly to an overnight low of 1.3122 but overextended short-term indicators could slow down the pace of any further decline. Overall, we continue to expect the current GBP weakness to extend to 1.3000.
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AUD/USD: Neutral: Expect choppy trading between 0.7305/0.7510.
While the pull-back from last Friday’s 0.7650 peak is picking up momentum, only a drop below 0.7305 support would indicate a sustained AUD weakness in the coming days. For now, we hold a neutral view and expect this pair to trade within 0.7305/0.7510 range. That said, downward pressure would continue to increase unless there is a move back above 0.7510 within these few days.
NZD/USD: Neutral: In a broad 0.6975/0.7170 range.
Similar to AUD/USD, the pull-back from last Friday’s 0.7305 high is picking up momentum but only a clear break below 0.6975 would indicate that NZD is ready to head lower towards 0.6920 and beyond. In the meanwhile, we hold a neutral view but unless this pair can reclaim 0.7170, the downside risk would continue to increase.
USD/JPY: Neutral: In a broad 100.00/105.00 range.
After registering a whopping 770 pips range last Friday, USD settled down quickly and traded in a surprisingly narrow range of 101.37/102.46 yesterday. However, the outlook for USD from here is still unclear and a sudden pickup in volatility cannot be ruled out just yet. That said, we believe 100.00/105.00 should be enough to contain the price action over the next several days.