United Overseas Bank and their comments on five currencies
A new day and a new week so here's UOB's take on 5 pairs.
EUR/USD: Bearish: Still clearly bearish, next significant supports at 1.0538, 1.0456.
There is not much to add to the update last Friday. The next supports are at 1.0538 and 1.0456. Overall, only a move above 1.0720 would indicate that the current bearish phase has ended.
GBP/USD: Neutral: Bearish if daily closing below 1.2300.
As highlighted last Friday, while the shorter term undertone has turned negative, any decline in GBP is expected to encounter solid support at 1.2300. GBP touched a low of 1.2302 during NY session but has recovered somewhat. That said, the undertone is still weak and a daily closing below 1.2300 would indicate that the current neutral outlook has shifted to bearish (with an immediate target of 1.2200). Overall, this pair is expected to stay under pressure unless it can move back above 1.2430/35 within the next 1 to 2 days.
AUD/USD: Bearish: Aim for 0.7305 next.
AUD continues to accelerate lower but is still holding above the 0.7305 support (low of 0.7315 during Sydney hours). A break 0.7305 appears imminent and would shift the focus towards 0.7240.
NZD/UD: Bearish: Aim for 0.6950 as next target.
There is no change to the bearish NZD view and we continue to expect a move to 0.6950/55, the low seen in July. Only a move back above 0.710 would indicate that a temporary low is in place.
USD/JPY: Bullish: 111.45 next target.
USD continues to advance and based on the current momentum, further gains towards the 111.40/45 high seen in late May would not be surprising. The next resistance above this level is at 111.90.
There's not much to disagree with in those views. The main pair I'd be wary about this week is USDJPY. It's come a long way very quickly and that means there's always the possibility of seeing a quick drop of a couple of hundred pips, even if the result of that is to just refresh the trend.
eFX New has the note from the folks at UOB. Check them out here.
