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FX Analysis

Short-term FX Technical Strategy (13 May 2022)

foreign exchange

EUR/USD – 1.0350 hit, potential short-term tactical rebound

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The EUR/USD has stated the expected decline and hit the 1.0350 support as per highlighted in our previous report dated on 10 May 2022.

Short-term elements are now advocating for a potential mean reversion rebound to retrace some portions of its medium-term down trend in place since 31 March 2022 high. Flip to a bullish bias above 1.0315 key short-term pivotal support for a potential bounce towards 1.0460/0480 intermediate resistance and a break above it sees 1.0595 next.

However, an hourly close below 1.0315 invalidates the bounce scenario for a continuation of the impulsive down move towards the next support at 1.0240/1.0200 in the first step.

GBP/USD – Short-term downside momentum has started to abate

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Since our last report dated on 10 May 2022, the GBP/USD has inched lower as expected and almost hit the 1.2100 support (printed an intraday low of 1.2163 on 12 May).

The hourly RSI oscillator has flashed a bullish divergence signal at its oversold region which indicates that the short-term downside momentum has started to abate that increases the odds of a short-term tactical corrective rebound at this juncture.

Flip to a bullish bias above 1.2100 key short-term pivotal support for a potential bounce towards the intermediate resistance at 1.2390 in the first step. On the other hand, a break with an hourly close below 1.2100 invalidates the bounce scenario for a continuation of the impulsive down move towards the next supports at 1.1950 and 1.1800.

USD/JPY – The odds have skewed towards a short-term pull-back

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The USD/JPY has broken below the 129.50 tightened key short-term pivotal support as per highlighted in our previous report dated on 10 May 2022 which invalidated the bullish bias.

Key elements are now advocating a corrective decline at least in the short-term. Flip to a bearish bias below 129.80 key short-term pivotal resistance for a further potential drop towards 127.00 before the key medium-term support zone of 126.30/125.80.

On the flipside, a clearance with an hourly close above 129.80 invalidates the corrective decline scenario for a resurgence of the bulls towards 132.00.

AUD/USD – 0.6825 hit, potential short-term tactical rebound

(click to enlarge chart)

The AUD/USD has staged the expected drop as per highlighted in our previous report dated 10 May 2022 and hit the upper limit of the support zone at 0.6825 (printed an intraday low of 0.6826 on 12 May US session).

Key short-term elements are now advocating for a short-term corrective rebound to retrace some portions of the short-term downtrend phase in place since 5 April 2022 high. Flip to a bullish bias above 0.6780 key short-term pivotal support for a potential bounce towards the intermediate resistance at 0.7030 in the first step and a break above it sees 0.7130 next.

However, a break with an hourly close below 0.6780 invalidates the bounce scenario for a continuation of the impulsive down move towards the next support at 0.6690/6670.

Time stamped: 13 May 2022 at 8.30am SGT

Source: TradingView


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