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FOREX Tech Targets

EUR/USD: Neutral (since 07 Aug 17, 1.1785): Bearish if NY closing below 1.1680.

The ease of which the 1.1750 support was taken out came as a surprise. As highlighted yesterday, “a break below 1.1750 would indicate a retest of last week’s low near 1.1685/90”. While EUR rebounded from an overnight low of 1.1686, the rapid pace of the decline suggests that the immediate pressure has shifted to the downside. From here, a NY closing below 1.1680 would indicate that EUR has moved into a bearish phase. In view of the strong rally over the past several months, any decline is viewed as a longer-term ‘pull-back’ and may be ‘limited’ to the rising trend-line support on the daily chart (not visible in the chart below but currently sitting near 1.1580). On the upside, resistance is at 1.1775 but only a move back above 1.1810 would indicate the risk for a shift to a bearish phase has subsided.

GBP/USD: Bearish (since 07 Aug 17, 1.3045): Room for extension lower to 1.2775.

While we held the view that the bearish phase that started last Monday (07 Aug, spot at 1.3045) is still intact, the ease of which the strong support at 1.2900 was taken out was unexpected (thanks to the weaker than expected UK inflation data). The strong decline even managed to edge below the next strong support at 1.2850 (overnight low of 1.2846). Downward momentum has picked up strongly and there is room for the current GBP weakness to extend further to 1.2775 (even though the July’s low near 1.2710/15 may not be easy to break). On the upside, resistance is at 1.2930 but only a break back above 1.2970 would indicate that the current bearish phase has ended.

AUD/USD: Shift from neutral to BEARISH: Anticipating a break of 0.7790 trend-line for a move 0.7750.

We have held a neutral stance for about 3 weeks and the break of 0.7830 yesterday is an indication that AUD has moved into a bearish phase. From here, we are anticipating a break of the rising trend-line connecting the June’s and July’s low (currently at 0.7790). A break of this level could lead to a rapid drop to 0.7750, the peak seen in March. On the upside, resistance is at 0.7875 but only a move back above 0.7910 would indicate that our bearish expectation is wrong.

NZD/USD: Bearish (since 09 Aug 17, 0.7330): Below 0.7205 shift focus to 0.7145.

Despite the perceived low odds, NZD continues with its decline and the revised target at 0.7205 appears to be within reach. A break of this level would shift the focus to 0.7145. 

USD/JPY: Neutral (since 15 Aug 17, 110.10): In a 109.20/111.05 range.

We just shifted to a neutral stance on USD yesterday and there is no change to the view. However, the pace and extent of the advance came as a surprise. For now, we continue to hold the view that the current USD strength is part of a broad 109.20/111.05 consolidation but would review our outlook if there is a clear and sustained move above 111.05.

Source: efxnews.com

EUR/USD: Neutral (since 07 Aug 17, 1.1785): Bearish if NY closing below 1.1680.

The ease of which the 1.1750 support was taken out came as a surprise. As highlighted yesterday, “a break below 1.1750 would indicate a retest of last week’s low near 1.1685/90”. While EUR rebounded from an overnight low of 1.1686, the rapid pace of the decline suggests that the immediate pressure has shifted to the downside. From here, a NY closing below 1.1680 would indicate that EUR has moved into a bearish phase. In view of the strong rally over the past several months, any decline is viewed as a longer-term ‘pull-back’ and may be ‘limited’ to the rising trend-line support on the daily chart (not visible in the chart below but currently sitting near 1.1580). On the upside, resistance is at 1.1775 but only a move back above 1.1810 would indicate the risk for a shift to a bearish phase has subsided.

GBP/USD: Bearish (since 07 Aug 17, 1.3045): Room for extension lower to 1.2775.

While we held the view that the bearish phase that started last Monday (07 Aug, spot at 1.3045) is still intact, the ease of which the strong support at 1.2900 was taken out was unexpected (thanks to the weaker than expected UK inflation data). The strong decline even managed to edge below the next strong support at 1.2850 (overnight low of 1.2846). Downward momentum has picked up strongly and there is room for the current GBP weakness to extend further to 1.2775 (even though the July’s low near 1.2710/15 may not be easy to break). On the upside, resistance is at 1.2930 but only a break back above 1.2970 would indicate that the current bearish phase has ended.

AUD/USD: Shift from neutral to BEARISH: Anticipating a break of 0.7790 trend-line for a move 0.7750.

We have held a neutral stance for about 3 weeks and the break of 0.7830 yesterday is an indication that AUD has moved into a bearish phase. From here, we are anticipating a break of the rising trend-line connecting the June’s and July’s low (currently at 0.7790). A break of this level could lead to a rapid drop to 0.7750, the peak seen in March. On the upside, resistance is at 0.7875 but only a move back above 0.7910 would indicate that our bearish expectation is wrong.

NZD/USD: Bearish (since 09 Aug 17, 0.7330): Below 0.7205 shift focus to 0.7145.

Despite the perceived low odds, NZD continues with its decline and the revised target at 0.7205 appears to be within reach. A break of this level would shift the focus to 0.7145. 

USD/JPY: Neutral (since 15 Aug 17, 110.10): In a 109.20/111.05 range.

We just shifted to a neutral stance on USD yesterday and there is no change to the view. However, the pace and extent of the advance came as a surprise. For now, we continue to hold the view that the current USD strength is part of a broad 109.20/111.05 consolidation but would review our outlook if there is a clear and sustained move above 111.05.

Source: efxnews.com

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