US wages are slow and inflation may be coming or not. What’s next for currencies? Here are the technical levels to watch:

EUR/USD: Neutral (since 05 Mar 18, 1.2335): Pressure shifted back to the downside but expect strong support at 1.2220.

EUR hit a ‘fresh’ low of 1.2271 last Friday but rebounded to close almost unchanged for the day. We continue to hold the view that the immediate pressure is on the downside even though ‘neutral’ shorter-term indicators suggest that EUR could trade sideways for a few days first before moving lower to test the solid support at 1.2220. At this stage, a sustained move below this level seems unlikely. Resistance is at 1.2370 but only a move above 1.2420 would indicate that the current mild downward pressure has eased

GBP/USD: Neutral (since 07 Mar 18, 1.3895): Immediate downside bias but overall in a 1.3700/1.3900 range.

GBP rebounded last Friday but overall registered an ‘inside day’. Despite the muted price action, we continue to hold the view that the immediate bias is tilted to the downside but any weakness is viewed as part of a 1.3700/1.3900 consolidation range and not the start of a sustained down-move. An intraday move above 1.3900 is not ruled out but only a clear break of 1.3930 would indicate that the current mild downward pressure has eased

AUD/USD: Neutral (since 15 Feb 18, 0.7925): Rebound has scope to extend higher.

After trading sideways for several days, AUD staged a surprisingly strong up-move last Friday and is currently approaching the top of our previously expected 0.7715/0.7880 range. While we continue hold a neutral view on AUD, improving shorter-term momentum suggests that there is scope for the current strong rebound to extend higher towards 0.7940. At this stage, the odds for a sustained move above this level are not high (next resistance is at 0.7990). Overall, we expect AUD to stay underpinned for the next several days and only a break below the key support at 0.7780 would indicate that the current mild upward pressure has eased.

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