Daily Forex Technical Strategy (Thurs 09 Jan)

USD remains above support against EUR, AUD & JPY while further potential downside intact for GBP/USD.

GBP/USD – Further potential downside intact


click to enlarge chart

  • The pair has continued to be capped below a minor descending trendline from the 13 Dec 2019 high of 1.3515 with a series of minor “lower highs” seen in the past 2 days (click here for a recap on our previous report).
  • Maintain bearish bias with an adjusted short-term pivotal resistance now at 1.3215 for a further potential push down to target the near-term supports of 1.3000 and 1.2920. However, an hourly close above 1.3215 negates the bearish scenario for a push up towards 1.3300. 

EUR/USD – Mix elements; watch 1.1180 resistance

click to enlarge chart

  • The pair has broken below the 1.1120 key short-term support which has invalidated the bullish scenario. Mix elements for now; prefer to turn neutral between 1.1180 and 1.1100 (the pull-back support of the former major descending resistance from 24 Sep 2018 high).
  • Only a clearance with an hourly close above 1.1180 revives the bullish tone for a push up to target the next resistances at 1.1240 and 1.1285 next (Fibonacci retracement/expansion cluster & swing high areas of 10/18 Jul 2019). On the flipside, a break below 1.1100 exposes the medium-term ascending trendline from 01 Oct 2019 low acting as a support at 1.1060/1040.

USD/JPY – Mix elements; watch 109.70 & 108.80


click to enlarge chart

  • The pair has squeezed up above the 108.80/95 key short-term resistance that has invalidated the bearish scenario as per highlighted by our previous report on the backdrop of a de-escalation of geopolitical risk in the Middle East.
  • Mix elements now; prefer to turn neutral between 109.70 (minor range top since Dec 2019) & 108.80. Only an hourly close below 108.80 reinstates the bearish tone for a slide back towards the next near-term support at 107.75/60. On the flipside, a clearance above 109.70 sees a further push up to target the 110.60 major pull-back resistance from 24 Jun 2016 low & the 21/22 May 2019 swing high).

AUD/USD – Mix elements; watch 0.6840 & 0.6930


click to enlarge chart

  • The pair has broken below the 0.6930 key short-term support that has invalidated the bullish scenario. Mix elements now; prefer to turn neutral between 0.6930 and 0.6840 (also the pull-back support of the former major descending channel resistance from 03 Dec 2018 high).
  • On a clearance with an hourly close above 0.6930 revives the bullish tone for push up to retest 0.7030 before targeting 0.7060/7080. On the flipside, a break below 0.6840 sees a further slide to probe the 0.6755 major support (the ascending trendline from 07 Aug 2019 low).

Charts are from eSignal


Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.