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FX analysis

Short-term FX Technical Strategy (12 Jul 2022)

foreign exchange

EUR/USD – Approaching parity but potential short-term snap-backed rally looms

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EUR/USD has staged the expected drop towards the 1.0060 support/target as highlighted in our prior report dated 8 July 2022.

Right now, the EUR/USD is just trading a whisker away from the key psychological 1.00 parity level; printed a current intraday low of 1.0005 at this time of the writing. Interestingly, short-term technical elements (fractals, graphical; dropped and now testing the lower boundary of the medium-term descending channel from 11 February 2022 high & oversold condition in hourly RSI) are advocating for a potential short-term snap-backed rally.

Flip to a bullish stance above 0.9950 key short-term pivotal support for a potential push up towards the intermediate resistance at 1.0105 and a break above it may add further inertia towards 1.0160/1.0200 next. On the other hand, an hourly close below 0.9950 invalidates the snap-backed rally scenario for a continuation of the impulsive down move sequence towards the next supports at 0.9890 and 0.9800 next.

GBP/USD – 1.1850 support hit; elements are advocating for a potential bounce

(click to enlarge chart)

GBP/USD has staged the expected drop and hit the 1.1850 support/target (printed a current intraday low of 1.1846) as highlighted in our prior report dated 8 July 2022.

Short-term elements are now positive to support a potential short-term bounce within a medium-term downtrend phase. Flip to bullish bias above 1.1800 key short-term pivotal support for a potential push up towards 1.1930 intermediate resistance and a break above it may see a further rally towards 1.2040 next.

However, a break with an hourly close below 1.1800 invalidates the short-term bounce scenario for a continuation of the impulsive down move sequence towards the next support at 1.1680/1650.

USD/JPY – Potential melt-up continues; watch 136.35 tightened key support

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USD/JPY has staged the expected run-up and hit the 137.20/50 resistance/target (printed an intraday high of 137.75 on 11 July) as highlighted in our prior report dated 8 July 2022.

Short-term key elements are still now showing any signs of clear bullish exhaustion signals. Maintain the bullish bias with a tightened key short-term pivotal support now at 136.35 for a further potential up move towards the next resistances at 138.50 and 140.10.

On the other hand, a break with an hourly close below 136.35 put a pause to the current bullish run for a deeper pull-back towards the next support at 135.15 (6 July 2022 swing low area & the ascending trendline from 23 June 2022 low).

AUD/USD – Watch the 0.6670/6640 key support

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AUD/USD has staged a bearish exit from the lower limit of 0.6760 neutrality zone as highlighted in our prior report dated 8 July 2022. Right now, it is coming close to a key short-term support zone of 0.6670/0.6640 (also the former 9 March 2020 swing high).

The hourly RSI oscillator has flashed a bullish divergence signal at its oversold region which indicates that recent short-term downside momentum has abated. Flip to a bullish bias above 0.6670/0.6640 key short-term pivotal support for a potential short-term corrective bounce towards the intermediate resistance of 0.6850/6890.

On the flipside, a break with an hourly close below 0.6640 sees a continuation of the bearish impulsive down move sequence towards the next support at 0.6560.

Time-stamped: 12 July 2022 at 3.00 pm SG

Source: CMC Markets


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