Daily Forex Technical Strategy (Wed 24 Jul)

Further USD strength

EUR/USD – Further drop in progress after minor rebound

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  • Broke below the 1.1180 neckline support of the “Head & Shoulders” configuration as expected and dropped lower towards the downside target/support at 1.1130/1120 (click here for a recap on our previous report).
  • The hourly Stochastic oscillator has shaped a bullish divergence signal and exited from its oversold region. Risk of shaping an imminent minor corrective rebound above 1.1130/1120. Before new downleg. Maintain bearish bias in any bounces with a tightened key short-term pivotal resistance at 1.1200 (pull-back resistance & Fibonacci retracement cluster) for a push down to retest 1.1130/1120 before targeting the next near-term support at 1.1060.
  • However, 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 the descending resistance from 10 Jan 2019 high).

GBP/USD – Bears remain in control

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  • Continued to drift down lower as expected and a brief “spiked up” to test the 1.2495 intermediate resistance after the announcement of Boris Johnson as the new U.K Prime Minister.
  • Short-term key elements remain negative, maintain bearish bias in any bounces below adjusted key short-term pivotal resistance at 1.2560 for a potential push down to target the next supports at 1.2370 follow by 1.2230 next. However, an hourly close above 1.2560 invalidates the bearish tone for an extension of the corrective rebound towards 1.2760 range resistance.

USD/JPY – Further potential push up within range

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  • Since its 25 Jun 2019 swing low of 106.80, the pair has appeared to be evolving within a minor “triangle” range configuration. Flip to a bullish bias in any dips above the 107.75 key short-term pivotal support for a further potential push up towards the 108.60 range resistance.
  • However, an hourly close below 107.75 invalidates the push up scenario for a drop towards the range support at 107.30.

AUD/USD – Failure bullish breakout

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  • Broke below the 0.7035/7020 key short-term pivotal that has invalidated the bullish breakout triggered on 19 Jul 2019. Flip back to a bearish bias in any bounces below 0.7035 key short-term pivotal resistance for a further potential push down towards 10 Jul swing low area of 0.6910 in the first step.
  • However, an hourly close above 0.7035 invalidates the bearish tone for an up move to retest 0.7080 follow by 0.7130 next.

Charts are from eSignal

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