Daily Forex Technical Strategy (Thurs 01 Aug)

Further USD strength & watch 109.20 key resistance on USD/JPY.

EUR/USD – Bearish breakdown from minor consolidation; further potential drop


click to enlarge chart

  • The pair has staged the expected bearish breakdown from the minor “Symmetrical Triangle” range configuration in place since last Thurs, 25 Jul as per highlighted in our previous report (click here for a recap) and hit the short-term downside target/support at 1.1060.
  • The hourly Stochastic oscillator has started to exit from its oversold region which indicates the risk of a minor rebound within a medium-term bearish trend that remains intact since 25 Jun 2019 high. Maintain bearish bias in any bounces below a tightened key short-term pivotal resistance now at 1.1115 for another potential downleg to target the next support at 1.0975 (Fibonacci projection cluster & “Head & Shoulders” breakdown projected exit target).
  • However, a clearance with an hourly close above 1.1115 negates the bearish tone for an extension of the corrective rebound towards 1.1200 resistance.

GBP/USD – Minor corrective rebound ended; potential impulsive down move resumes


click to enlarge chart

  • The pair has staged the expected minor corrective rebound to print an intraday high of 1.2250 prior to yesterday’s FOMC decision; just 20 pips shy of the upside target/resistance of 1.2270 as per highlighted in our report. Thereafter, it has staged to decline and hit the 1.2100 before a bounce of 40 pips seen in today’s Asian session.
  • Despite the pair has manged to hold at the 1.2100 key short-term support (highlighted in our previous report to maintain the minor corrective rebound scenario), the bearish breakdown of the EUR/USD and current Elliot Wave/fractal analysis of GBP/USD has reduced the conviction for a further corrective rebound. Thus, we flip back to a bearish bias in any bounces below 1.2250 key short-term pivotal resistance for another potential downleg to target the next support at 1.2000/1950 (Fibonacci projection cluster & Oct 2016 low).
  • However, a clearance with an hourly close above 1.2250 negates the bearish tone for an extension of the corrective rebound towards the 1.2430 resistance.

USD/JPY – Squeezed up towards 109.20 key medium-term resistance


click to enlarge chart

  • The pair squeezed up towards the 109.00/109.20 key medium-term pivotal resistance post FOMC but no clear bearish signals at this juncture. Thus, prefer to turn neutral between 109.20 and 108.45. Only an hourly close below 108.45 is likely to reignite the bearish tone for a slide towards 108.00 follow by 107.30 range support.
  • On the flipside, a daily close above 109.20 sees a further squeeze up towards the next resistance at 109.75/90 (30 May 2019 swing high & close to 50% Fibonacci retracement of the previous down move from 24 Apr high to 25 Jun 2019 low).

AUD/USD – Potential impulsive down move resumes

click to enlarge chart

  • Yesterday’s corrective bounce fell short of the expected target/resistance of 0.6945 as it only printed a high of 0.6900 before it tumbled and broke below the 0.6860 key short-term support as per highlighted in our previous report.
  • The impulsive down move is likely to have resumed; flip back to a bearish bias in any bounces below 0.6900 key short-term pivotal resistance for a further potential downleg to target the next support at 0.6790 in the first step.
  • However, a clearance with an hourly close above 0.6900 invalidates the bearish scenario for a corrective rebound towards the next resistance at 0.6990.

Charts are from eSignal

  





Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.