FOREX Tech Targets

EUR/USD: Neutral (since 05 Mar 18, 1.2335): Focus is at 1.2153 now.

We highlighted yesterday (23 Apr, 1.2280) that the “pressure has shifted to the downside” and expected “further weakness to 1.2212”. However, we did not exactly expect 1.2212 to be taken out within such a short period of time (overnight low of 1.2196). From here, the focus has shifted to last month’s 1.2153 low and based on the vastly improved downward momentum, the odds for a break of this level have increased considerably. A clear break of this level would suggest that EUR is ready for much deeper down-move in the weeks ahead. In the meanwhile, only a break back above 1.2300 (‘key resistance’ was at 1.2355 yesterday) would indicate that a short-term low is in place.

GBP/USD: Neutral (since 07 Mar 18, 1.3895): Further weakness still seems likely.

We highlighted yesterday that a clear break of 1.3965 “would shift the focus to 1.3900”. However, the continuing decline in GBP that quickly took out this support level was not exactly expected (low of 1.3928). The price action for the past several days (GBP closed lower for the fifth consecutive day yesterday) suggests that further weakness still seems likely. From here, a break below 1.3900 would open up the way for a move to 1.3800. At this stage, the odds for a move to last month’s 1.3712 low are not high. On the upside, the ‘key resistance’ is at 1.4040 now (from 1.4130 yesterday) and only a break of this level would indicate that the current weakness has stabilized.

AUD/USD: Neutral (since 22 Mar 18, 0.7770): Expect further weakness to 0.7550.

We expected a lower AUD yesterday (23 Apr, 0.7665) but the pace of which the decline approaches the major 0.7600 level came as a surprise (overnight low of 0.7599). 0.7600 is major support and a break of this level would suggest further weakness towards 0.7550. This support is followed by another major level at 0.7500 (low in December last year). Overall, the decline for the past few days appears to be running too fast but AUD is not showing sign of slowing for now and we have to contend with further weakness to 0.7550. The ‘key resistance’ has moved lower to 0.7690 from 0.7735.

NZD/USD: Neutral (since 05 Feb 18, 0.7280): Further weakness towards 0.7100 seems likely.

We woefully underestimated the weakness in NZD as it not only sliced through the 0.7190 ‘target’ indicated last Friday (20 Apr, 0.7265) but also broke below last month’s 0.7155 low (overnight low of 0.7147). The price action suggests there is no reason to expect a bottom anytime soon and further weakness towards 0.7100 seems likely. A clear break below this level would indicate that NZD is ready for a much deeper down-move in the weeks ahead. In the meanwhile, NZD is expected to stay on the back foot unless it can reclaim 0.7220 (‘key resistance’ previously at 0.7330).

USD/JPY:  Neutral (since 21 Feb 18, 107.35): Room for further extension to 109.30.

We highlighted yesterday that there is “scope for USD rebound to extend to 108.60” but the manner and pace of which this level was exceeded came as a surprise (high of 108.75). While it is too early to expect a sustained USD rally, the current short-term strength has room to extend further towards 109.30. A break of this level would indicate that USD is ready for a move to 110.00. All in, we continue to hold a positive USD view unless there is a drop back below the ‘key support’ at 107.80 (level adjusted from 107.00).

Source:efxdata.com