Currencies Tech Limits

Currencies are somewhat stuck and not going anywhere fast. What are their technical limits?

Here is their view, courtesy of eFXdata:

EUR/USD: Neutral (since 05 Jun 18, 1.1700): Downward pressure has eased, EUR to trade sideways to slightly higher

EUR surrendered some of last Friday’s gains as it eased off after failing to move above the 1.1700 resistance (high of 1.1697). There is no change to the current neutral outlook and we continue to expect EUR to trade sideways from here, likely within a 1.1570/1.1750 range.

GBP/USD: Neutral (since 25 Jun, spot at 1.3265): GBP has moved into a consolidation phase and is expected to trade sideways.

There is not much to add as GBP registered an ‘inside day’ yesterday before ending lower (closed at 1.3144, -0.46%). We continue to hold the view that GBP has moved into a consolidation phase and expect sideways trading between 1.3100 and 1.3280. The bottom of the expected consolidation range at 1.3100 was tested yesterday (low of 1.3095) and while further intraday probes below this level is not ruled out, the prospect for a sustained break below the major 1.3040/50 support zone is not high.

AUD/USD: Bearish (since 20 Jun 18, 0.7385): Bearish phase received a ‘boost’, break of 0.7300 would shift focus to 0.7250.

AUD touched a high of 0.7415 yesterday, just a few pips below the ‘stop-loss’ for our bearish view at 0.7420. We highlighted yesterday that a break of the ‘stop-loss’ seems likely unless AUD can move and stay below 0.7360 within these few days. That said, the subsequent plunge in AUD that easily took out several strong support levels was not exactly expected (overnight low of 0.7311). The sharp decline has given the current bearish phase a strong ‘boost’ and from here, a break of the 0.7300 support would shift the focus to 0.7250. The ‘stop-loss’ remains unchanged at 0.7420 even though ideally, AUD should not move back above 0.738

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