Short Term FX Technical Strategy (August 5, 2022)


EUR/USD – Key support at 1.0100 to watch to maintain bullish tone

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

No change, watch key short-term support at 1.0100 to maintain the bullish bias and a breakout with an hourly close above 1.0270 reinforces a fresh push towards the next resistance zone at 1.0350/1 .0400 in the medium term (several weeks) corrective rebound phase.

On the other hand, a breakout with an hourly close below 1.0100 negates the bullish tone for a decline to retest the key medium-term support area at 1.0000/0.9950.

GBP/USD – Key support at 1.2080 managed to hold after the BoE

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GBP/USD shaped a decline of -109 pips immediately following the BoE’s monetary policy decision yesterday, August 4th. Interestingly, the decline managed to reverse after a test at the predefined key short-term pivot support at 1.2080, as highlighted in our previous report dated August 2nd.

Maintaining a bullish bias and adding 1.2180 as intermediate resistance and a breakout with an hourly close above reinforce another potential move towards next resistance at 1.2325.

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

USD/JPY – Stimulus rebound target reached, risk of another downside

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USD/JPY shaped the expected rebound and hit the resistance at 134.20 as shown in our previous report dated August 2nd.

Elements have turned negative that point to the potential start of another sequence of impulsive bearish moves from its short to medium term downtrend phase in place since the July 14, 2022 high at 139.39.

Reverting to a downside bias below key short-term resistance at 135.10 and a break below 132.55 reinforces a potential further push down to retest 131.25/130.95 initially. On the other hand, a breakout with an hourly close above 135.10 sees an extension of the rebound towards the next resistance at 137.50.

AUD/USD – Bulls must hold above 0.6900

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AUD/USD broke below the key short-term support of 0.6960, as highlighted in our previous report dated August 2, but the bearish tone managed to lock in on the descending medium-term resistance formed from the 5th Apr 2022 high. Support at 0.6900.

It printed an intraday low of 0.6886 on August 3 and has been trading above 0.6960 so far with the RSI hourly oscillator still hovering above its key corresponding support at the 47 level. %, suggesting a resumption of short-term bullish momentum.

Maintain the bullish bias with 0.6900 as key near-term pivot support for another potential rally towards next resistance at 0.7070. However, a break with an hourly close below 0.6900 leads to a slide to the next support at 0.6860 before another stage of potential corrective bounce starts.

Timestamp: August 5, 2022 at 2:30 p.m. SGT

Source: CMC Markets

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