Major currency pairs are looking for a new direction amid a slew of political news. What levels should we watch?
Here is their view, courtesy of eFXnews:
EUR/USD: Neutral (since 05 Mar 18, 1.2335): Weak undertone is stabilizing.
In recent updates, we expected EUR to “remain on the back foot unless it can move above 1.2350”. The recent weak undertone is beginning to stabilize as EUR staged a robust recovery from last Friday’s 1.2212 low. The odds for downward extension towards last month’s 1.2153 low have diminished and a while a move above 1.2350 would not change the neutral outlook, it would indicate that EUR has moved into a higher sideway consolidation range.
GBP/USD: Neutral (since 07 Mar 18, 1.3895): Scope for GBP to test the strong 1.4200 resistance.
The continuing short-term strength came as a surprise as GBP edged above the top of our expected 1.3935/1.4160 consolidation range yesterday to reach a high of 1.4163. The improved undertone suggests that there is scope for GBP to test the next strong resistance at 1.4200 but at this stage, we do not anticipate a sustained move above this level (next resistance is at last month’s 1.4244 peak). In other words, the current short-term GBP could lead to a move towards 1.4200 but any up-move is unlikely to be sustained.
USD/JPY: Neutral (since 21 Feb 18, 107.35): USD is expected to trade sideways.
The outlook for USD remains mixed and we continue to hold a neutral stance. We expect further erratic trading from here, likely within a broad 106.20/107.90 range.
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