Daily Forex Technical Strategy (Tues 30 Jul)

GBP/USD residual push down before risk of minor corrective rebound & USD/JPY back at key medium-term resistance with bearish elements.

EUR/USD – Minor bearish trend remains intact

click to enlarge chart

  • Since 25 Jul 2019 post ECB low of 1.1100, the pair has continued to trade sideways within a minor “Symmetrical Triangle” range configuration. No major changes on its key short-term elements; maintain bearish bias in any bounces below 1.1200 key short-term pivotal resistance for another potential downleg to target the next near-term support at 1.1060.
  • However, a break with an hourly close above 1.1200 negates the bearish tone for an extension of the corrective rebound towards the 1.1280 key medium-term resistance (also close to the descending resistance from 10 Jan 2019 high).

GBP/USD – Residual push down before risk of minor corrective bounce

click to enlarge chart

  • The pair has staged the expected bearish breakdown from its prior minor “triangle range” configuration and tumbled towards the short-term downside target/support of 1.2230 as per highlighted in our previous report (click here for a recap).
  • Based on Elliot Wave/fractal analysis coupled with an extreme oversold reading seen in the hourly Stochastic oscillator, the pair may stage a residual push down to target 1.2160 follow by 1.2100 (Fibonacci projection cluster & lower boundary of a medium-term descending channel from 03 May 2019 high) holding below the 1.2270 tightened key short-term pivotal resistance before a potential minor corrective rebound materialises.
  • However, a break with an hourly close above 1.2270 invalidates the residual push down scenario to open up scope a corrective rebound towards 1.2385/2430.

USD/JPY – Bounce target reached with bearish elements

click to enlarge chart

  • The pair has staged the expected rebound towards the corrective bounce target of 108.60/109.00 as per highlighted in our previous report.
  • Right now, it is coming close to the key medium-term resistance of 109.00/109.20; the former primary ascending range support from Jun 2016 low and a Fibonacci retracement/projection cluster coupled with an easing short-term upside momentum in price action as indicated by the bearish divergence seen in the hourly RSI oscillator in the overbought region.
  • Flip to back to a bearish bias with 109.20 as key pivotal resistance and an hourly close below 108.65 (minor “Ascending Wedge” support) is likely to reinforce the start of another potential impulsive downleg to target the next near-term support at 108.00 in the first step.
  • However, a break with a daily close above 109.20 invalidates the bearish scenario for a squeeze up towards 109.40/60 (30 May 2019 swing high area).

AUD/USD – Downside target reached, mix elements

click to enlarge chart

  • The pair has dropped as expected and hit the 0.6910 short-term downside target/support of 0.6910 as per highlighted in our previous report. Mix elements at this juncture; prefer to turn neutral now between 0.6915 and 0.6880. An hourly close above 0.6915 sees a minor corrective rebound towards 0.6970 intermediate resistance.
  • On the flipside, a break with an hourly close below 0.6880 sees the continuation of the decline to retest 18 Jun 2019 swing low of 0.6830.

Charts are from eSignal


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.