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FX analysis

Short-term FX Technical Strategy (14 Apr 2022)

foreign exchange

EUR/USD – Continuation of short-term recovery as ECB looms, watch 1.0835/0800 support

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GBP/USD – Broke above 1.3060, ripe for a potential short-term recovery

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The GBP/USD has dropped as expected and hit the first support/target of 1.2975 as per highlighted in our prior report on 12 April. Thereafter, its has staged a squeeze up and broke above the 1.3060 short-term pivotal resistance.

Flip to a bullish bias in any minor pull-back in price actions above 1.3050 key short-term pivotal support for a further potential push up towards the next resistances at 1.3175 and 1.3220 (also the 61.8%/76.4% Fibonacci retracement of the recent decline from 23 March 2022 high to 13 April 2022 low). On the other hand, a break with an hourly close below 1.3050 reasserts the bearish tone for a drop to retest the 1.2975 support in the first step.

USD/JPY – Failure bullish breakout at 125.80 major resistance, risk of mean reversion decline remains intact

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The USD/JPY has managed to pierce above the 125.80 major resistance on 13 April on the backdrop of BOJ Governor Kuroda’s dovish monetary policy comments. Printed an intraday high of 126.31 but it failed to maintain upside momentum and ended with a daily close below 125.80 with a bearish “Shooting Star” candlestick patttern on 13 April.

Maintain the bearish bias and tolerate the excess of the short-term pivotal resistance to 126.30 for a further potential push down towards 124.70 and 124.15. A break below 124.15 opens up scope for a further corrective decline towards the next support at 123.50.

On the other hand, clearance with a 4-hour close above 126.30 sees the continuation of the impulsive up move sequence towards the next resistances at 126.90 and 127.90/128.60.

AUD/USD – Short-term downside momentum has started to ease off

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The AUD/USD has started to form a minor basing formation in the past two days and the hourly RSI oscillator has flashed a bullish divergence signal. These observations suggest that the downside momentum of the minor down move from 5 April 2022 high to 13 April 2022 low has started to abate.

Flip to a bullish bias above 0.7365 key short-term pivotal support and a break above the 0.7490 neckline resistance of the minor basing configuration reinforces a potential bounce towards the next resistance at 0.7560. On the flipside, a break with an hourly close below 0.7365 sees a further decline towards next support at 0.7300 (also the lower boundary of the medium-term ascending channel from 28 January 2022 low).

Time stamped: 14 Apr 2022 at 4.00pm SGT

Source: TradingView



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