Daily Forex Technical Strategy

EUR/USD – Potential push down towards minor range support

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• The pair pushed up at the start of yesterday, 17 Sep U.S. session to test the 1.1070 key short-term pivotal resistance before it stalled and traded in tight range of 18 pips ahead of today’s FOMC decision (click here for a recap on our previous report).
• Overall, the short-term price action of the pair seems to be evolving into a minor corrective “ascending range” configuration since 03 Sep 2019 within a major descending channel in place since 10 Jan 2019. Adjusted the key short-term pivotal resistance to 1.1110 (the upper limit of the minor ascending range) for a potential push down towards 1.1000 follow by the ascending range support of 1.0950. On the other hand, a clearance with an hourly close above 1.1110 invalidates the push down scenario for a squeeze up towards the key medium-term resistance of 1.1170/1200 (also the upper boundary of the descending channel from 10 Jan 2019).

GBP/USD – Elements remain bearish below key resistance

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• The pair has pushed up and staged a challenge on the 1.2510 key short-term pivotal resistance before it retreated. Elements remain negative with a bearish divergence signal seen in the 1-hour RSI oscillator at its extreme overbought level coupled with the short-term price action of the pair that is evolving within a minor bearish “Ascending Wedge” reversal configuration in place since 12 Sep 2019 low.
• Maintain bearish bias with an adjusted pivotal resistance at 1.2570/2585 (also the former major ascending support from 07 Oct 2016 low) to take into account of a higher volatile environment in today’s FOMC decision. A break below 1.2420 reinforces the start of downleg sequence to target the 1.2290 near-term support in the first step.
• On the other hand, a clearance with a daily close above 1.2585 invalidates the bearish scenario for a squeeze up towards the next resistance at 1.2680.

USD/JPY – Residual push up towards key resistance

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• The pair has continued to inch higher as expected. Maintain bullish bias with a tightened key short-term pivotal support at 107.85 for a further potential residual push up to target the 109.30/50 key resistance before risk of a bearish reversal sets in.
• On the other hand, a break with an hourly close below 107.85 invalidates the corrective rebound scenario for a slide back to retest the 106.70 pull-back support.

AUD/USD – 0.6890 remains the key short-term resistance to watch

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• Maintain bearish bias below 0.6890 key short-term pivotal resistance for a further potential push down to target the next near-term supports at 0.6810 and 0.6760/6740 (also the 76.4% Fibonacci retracement of the recent push up from 03 Sep low to 12 Sep 2019 high).
• On the other hand, a clearance with an hourly close above 0.6890 invalidates the bearish scenario for a continuation of the corrective rebound towards 0.7000 next (upper boundary of the descending channel from 03 Dec 2018 high).

Charts are from eSignal

EUR/USD – Further potential push down within range post FOMC

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• The pair has inched down lower as expected and hit the first short-term target/support of 1.1000 reinforced by a “less dovish” Fed FOMC outcome (click here for a recap on our previous report). Maintain bearish bias in any bounces below 1.1110 key short-term pivotal resistance for a further push down to target the minor range support at 1.0950.
• However, a clearance with an hourly close above 1.1110 invalidates the push down scenario for a squeeze up towards the key medium-term resistance of 1.1170/1200 (also the upper boundary of the descending channel from 10 Jan 2019).

GBP/USD – Evolving within bearish “Ascending Wedge”

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• Elements remain negative; maintain bearish bias below 1.2570/285 key pivotal resistance (also the former major ascending support from 07 Oct 2016 low) and a break below 1.2445 (lower limit of the “Ascending Wedge”) reinforces the start of downleg sequence to target the 1.2290 near-term support in the first step.
• However, a clearance with a daily close above 1.2585 invalidates the bearish scenario for a squeeze up towards the next resistance at 1.2680.

USD/JPY – 107.85 key support to maintain residual push up

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• The pair has managed to stage the expected push up and hit the first upside target/resistance of 108.45 as per highlighted in our previous report.
• Thereafter, it has inched down by 45 pips to print a current intraday of 107.98 in today, 19 Sep Asian session at this time of the writing before BOJ’s monetary policy meeting outcome.
• Elements remain unchanged; maintain bullish bias with 107.85 as the key short-term pivotal support for potential residual push up to target 109.00 with a maximum limit set at 109.30/50 major resistance before the risk of a bearish reversal sets in.
• However, a break with an hourly close below 107.85 invalidates the residual push up scenario for a slide back to retest the 106.70 pull-back support.

AUD/USD – Minor bounce before further drop

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• The pair has continued to push down lower as expected and right now it is hovering just above the 0.6760/6740 short-term downside target/support as per highlighted in our previous report.
• The 1-hour RSI oscillator is now coming close to an extreme oversold level which highlights the risk of an imminent mean reversion bounce. Maintain bearish bias in any bounces below a tightened key short-term pivotal resistance at 0.6860 for a further potential drop to target the minor range support of 0.6690 in the first step.
• However, a clearance with an hourly close above 0.6860 invalidates the bearish scenario for a continuation of the corrective rebound towards 0.7000 next (upper boundary of the descending channel from 03 Dec 2018 high).

Charts are from eSignal