Short Term FX Technical Strategy (August 17, 2022)

EUR/USD – The 240 pip slide has reached the inflection level for a potential rebound

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EUR/USD staged the expected push and hit the resistance/target at 1.0350/1.0400 as highlighted in our previous report dated August 5th.

Printed an intraday high of 1.0368 on August 10, 2022, it then pulled back 240 pips to hit a recent low of 1.0122 on August 16. A positive came as the hourly RSI oscillator shaped a bullish divergence signal in its oversold region, indicating that the short-term bearish momentum has waned.

Bullish bias above 1.0100, key short-term pivot support for another set of potential upside moves to retest 1.0270 at resistance in a short-term range setup since July 19, 2022. However, a breakout with an hourly close below 1.0100 negates the bullish tone of a decline to retest the key medium-term support area at 1.0000/0.9950.

GBP/USD – Potential push up to retest range high

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GBP/USD began swinging in a short-term sideways range pattern in place since August 1, 2022, and its recent 268 pip slide from its August 10, 2022 minor high hit range support at 1.2020 coupled with a positive reading seen in the hourly RSI oscillator which indicates a resumption of short-term bullish momentum.

Bullish bias above 1.2020, key short-term pivot support for a potential push to retest the 1.2280/1.2325 range resistance zone. On the other hand, failure to hold at 1.2020 and an hourly close below negates the bullish tone for a further slide towards the next support at 1.1900.

USD/JPY – Mixed elements, going neutral

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USD/JPY staged the expected bearish move as highlighted in our previous report dated August 5th and posted an intraday low of 131.73 on August 11th.

USD/JPY’s recent price action has begun to oscillate in a minor “symmetrical triangle” range pattern with its upper and lower bounds at 134.70 and 132.05, respectively.

Prefer to go neutral now between 134.70 and 132.05. A breakout with an hourly close above 134.70 validates further push towards 135.90 and 137.50. On the other hand, a breakout with an hourly close below 132.50 triggers another corrective leg down towards 131.25/130.95 and even 129.60 afterwards.

AUD/USD – Rebound potential from 0.6945 key support

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AUD/USD staged the expected rally and reached the resistance/target of 0.7070 as highlighted in our previous report dated August 5th.

After that, AUD/USD prices fell 145 pips from its August 11th minor high of 0.7135. Its bearish momentum has started to wane, as indicated by the bullish divergence signal given off by its hourly RSI oscillator in its oversold region.

Hold the bullish bias above 0.6945, key near-term pivot support for a potential rebound to retest 0.7070 and 0.7135/7150. On the other hand, a breakout with an hourly close below 0.6945 leads to a further slide towards the next support at 0.6860.

Timestamp: August 17, 2022 at 2:15 p.m. SGT

Source: CMC Markets

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