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FX analysis

Short-term FX Technical Strategy (2 Aug 2022)

foreign exchange

EUR/USD – Short-term uptrend remains intact

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EUR/USD has continued to inch higher as highlighted in our prior report dated 29 July and retested the 1.0270 intermediate resistance for the fifth time.

Elements remain positive; no change and maintain the bullish bias for a further potential push-up towards the next resistance zone of 1.0350/1.0400 followed by 1.0410/1.0440 next within the ongoing medium-term multi-week corrective rebound phase in place since 14 July 2022 swing low of 0.9950.

However, a break with an hourly close below 1.0100 negates the bullish tone for a drop to retest the key medium-term support zone of 1.0000/0.9950.

GBP/USD – Cleared above 1.2240, further potential up move in progress

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GBP/USD has surpassed the 1.2240 upper limit of the short-term neutrality/sideways zone as per highlighted in our prior report dated 29 July which has validated a further potential up move within its ongoing medium-term multiweek corrective rebound phase in place since 14 July 2022 swing low of 1.1760.

Flip back to a bullish bias above the 1.2080 key short-term pivotal support for a further potential rally towards the next resistances at 1.2325 and 1.2410/2435. On the other hand, failure to hold at 1.2080 and an hourly close below it invalidates the bullish tone for a pull-back towards the next support at 1.1900.

USD/JPY – Overstretched decline, risk of a snap-back rally above 129.60 key support

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USD/JPY has staged the expected decline and hit the key medium-term support zone of 131.25/130.95 as per highlighted in our prior report dated 29 July 2022.

Integrated technical analysis now indicated an increased odd of a snap-back rally with a bullish divergence signal being flashed out now in the hourly RSI oscillator at its oversold region which indicates an overstretched downside momentum.  

Flip to a bullish bias with 129.60 as the key short-term pivotal support and clearance above 132.55 reinforces the potential snap-back rally towards the next resistance at 134.20 max 135.10. However, a break with an hourly close below 129.60 invalidates the bullish bias for a continuation of the impulsive down move sequence towards the next support zone of 127.50/126.80.

AUD/USD – Holding at 0.6960 key support post-RBA, maintain bullish bias for now

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AUD/USD has tumbled by -70 pips post-RBA decision as it maintained a 50 bps interest rate hike quantum (similar to the previous meeting) rather than a super-sized increase of 75 bps as being forecasted by several market participants.

Maintain bullish bias if 0.6960 short-term key pivotal support holds for another round of potential push up towards the 0.7070 resistance.

On the flip side, failure to hold at 0.6960 and an hourly close below it put the bullish tone on hold for a pull-back towards the 0.6860 support before another leg of potential corrective rebound kickstarts.

Time-stamped: 2 Aug 2022 at 2.00 pm SGT

Source: CMC Markets

 

 


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