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FX analysis

Short-term FX Technical Strategy (5 Aug 2022)

foreign exchange

EUR/USD – 1.0100 key support to watch to maintain the bullish tone

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EUR/USD has continued to trade sideways below the 1.0270 intermediate resistance since our previous report dated 2 August.

No change, watch the 1.0100 key short-term pivotal support to maintain the bullish bias and a breakout with an hourly close above 1.0270 reinforces a further push up towards the next resistance zone of 1.0350/1.0400 within a medium-term (multi-week) corrective rebound phase.

On the other hand, 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 – 1.2080 key support managed to hold post-BoE

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GBP/USD has shaped a drop of -109 pips immediately post-BoE monetary policy decision yesterday, 4 August. Interestingly, the drop has managed to reverse after a test on the 1.2080 predefined key short-term pivotal support as highlighted in our previous report dated 2 August.

Maintain bullish bias and added 1.2180 as an intermediate resistance and a break with an hourly close above it reinforces another potential up move towards the next resistance at 1.2325.

However, failure to hold at 1.2080 and an hourly close below it invalidates the bullish tone for a deeper pull-back towards the next support at 1.1900.

USD/JPY – Snap-back rally target met, risk of another down leg

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USD/JPY has shaped the expected snap-back rally and hit the 134.20 resistance as per highlighted in our previous report dated 2 August.

Elements have turned negative that advocate the potential start of another impulsive down move sequence of its short to medium-term downtrend phase in place since 14 July 2022 high of 139.39.

Flip back to a bearish bias below 135.10 key short-term pivotal resistance and a break below 132.55 reinforces a further potential push down to retest 131.25/130.95 in the first step. On the flip side, a clearance with an hourly close above 135.10 sees an extension of the rebound towards the next resistance at 137.50.

AUD/USD – Bulls need to hold above 0.6900

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AUD/USD has pierced below the 0.6960 key short-term pivotal support as highlighted in our previous report dated 2 August, but the bearish tone has managed to stall at the formed medium-term descending resistance from 5 April 2022 high now turns pull-back support at 0.6900.

It printed an intraday low of 0.6886 on 3 August and traded back up above 0.6960 so far with the hourly RSI oscillator that is still hovering above its key corresponding support at the 47% level which suggests a revival of short-term upside momentum.

Maintain the bullish bias with 0.6900 as key short-term pivotal support for a further potential recovery towards the next resistance at 0.7070. However, a break with an hourly close below 0.6900 sees a slide towards the next support at 0.6860 before another leg of potential corrective rebound kickstarts.

Time-stamped: 5 Aug 2022 at 2.30 pm SGT

Source: CMC Markets





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