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FX analysis

Short-term FX Technical Strategy (21 Apr 2022)

foreign exchange

EUR/USD – Tolerate the short-term pivotal resistance excess to 1.0870

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The EUR/USD has shaped a bounce to test the 1.0850 short-term pivotal resistance as per highlighted in our previous report on 19 April. A bit of whipsaw around 1.0850 and the hourly RSI oscillator has integrated back below its overbought region which indicates a potential lack of upside momentum follow through.

Tolerate the excess to 1.0870 and maintain bearish bias for another potential leg of down move to retest 1.0770 intermediate support before 1.0720 next. However, a clearance with an hourly close above 1.0870 revives the corrective bounce scenario towards the intermediate range resistance of 1.0935 in place since 6 April and a break above it sees an extension towards 1.1035 (the former minor ascending support from 7 March 2022 low).

GBP/USD – Maintain bearish bias below 1.3100 key resistance

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No change, maintain bearish bias below 1.3100 key short-term pivotal resistance for another potential leg of impulsive down move to retest the 13 April swing low of 1.2975 before the next support at 1.2930/2910 (also the lower boundary of the minor descending channel from 23 March 2022 high).

On the other hand, a clearance with an hourly close above 1.3100 revives the corrective bounce scenario towards the next resistance at 1.3175 in the first step.

USD/JPY – 128.60 resistance hit, no clear signs of medium-term bullish exhaustion

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The USD/JPY has staged the expected rally and hit the 128.60 resistance (printed an intraday high of 129.40 on 20 April) as per highlighted in our previous report on 19 April. No clear signs of bullish exhaustion yet even though there are several verbal interventions/words of caution on the current bout of JPY weakness from Japanese government officials.

Maintain the bullish bias above 126.30/125.80 key short-term pivotal support for another potential impulsive up move towards the next resistance at 130.65 with a possible maximum limit at 132.00.  On the other hand, an hourly close below 125.80 opens up scope for a medium-term (multi-week) corrective decline scenario towards the next supports at 124.70 and 124.15 in the first step.

AUD/USD – Potential drop to retest 0.7330 medium-term support

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The AUD/USD has staged the bullish exit from the 0.7410 upper limit of the neutrality range as per highlighted in our previous report on 19 April.

Current price actions are now hovering below the 0.7490 resistance in place since 7 April with bearish short-term momentum reading as indicated by the hourly RSI oscillator that has flashed a bearish divergence signal at its overbought region and it is now attempting to break below its corresponding ascending support.

Flip to a bearish bias below 0.7490 key short-term pivotal resistance for a potential drop to retest 0.7410 before the 0.7330 medium-term support (also the lower boundary of the ascending channel from 28 January 2022 low). On the other flipside, a clearance with an hourly close above 0.7490 sees an extension of the corrective bounce towards the next resistance at 0.7560.

Time stamped: 21 Apr 2022 at 8.00am SGT

Source: TradingView


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