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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Daily Forex Technical Strategy Wed 07 Aug

Article By: ,  Financial Analyst
August 7, 2019 12:32 AM

EUR/USD – Mix elements; watch 1.1160 support


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  • Since its post FOMC low of 1.1025 printed on 01 Aug 2019, the pair has staged a squeeze up by 220 pips to print a high of 1.1250 yesterday, 06 Aug before it pulled-back right at the descending resistance from 10 Jan 2019.
  • Mix elements and ended yesterday U.S. session with a daily ‘Spinning Top” candlestick pattern. Prefer to turn neutral now between 1.1250 and 1.1160. Only an hourly close below 1.1160 reignites the bearish tone for a push down to retest 1.1025. On the flipside, an hourly close above 1.1250 sees an extended corrective rebound towards the next resistance at 1.1320/1340.

GBP/USD – 1.2250 remains the key resistance to watch


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  • Pair has traded sideways below the 1.2250 key short-term pivotal resistance since our last report. Maintain bearish bias and added 1.2135 as the downside trigger level. An hourly close below 1.2135 reinforces a potential downleg to target the next near-term support at 1.2000/1950 (Fibonacci projection cluster & Oct 2016 low).
  • However, a clearance with an hourly close above 1.2250 negates the bearish tone for an extension of the corrective rebound towards the 1.2430 resistance.

USD/JPY – Further minor corrective bounce cannot be ruled out


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  • The pair has staged the expected bearish reaction right below the 109.20 key medium-term resistance and plummeted beyond the short-term downside target/support of 106.80 as per highlighted in our previous report. It printed a low of 105.50 yesterday, 06 Aug on the back of rising risk aversion since the start of this week.
  • Right now, short-term elements are advocating for a minor corrective rebound to retrace the recent steep slide from 01 Aug 2019 high. Flip to a bullish bias for another potential leg of corrective bounce towards the 107.30 intermediate resistance (former minor ascending support from 25 Jun 2019 low & Fibonacci retracement/projection cluster).
  • However, a break with an hourly close below 105.50 opens up scope for the continuation of the impulsive down move towards 104.65 (close to 03 Jan 2019 flash crash low & 23 Mar 2018 swing low)

AUD/USD – Bears remain in control


click to enlarge chart

  • The pair has continued its expected downward drift and broke below the 0.6770/6740 downside target/support as per highlighted in our previous report. It has broken below the 03 Jan 2019 flash crash low of 0.6740 in today’s Asian session reinforced by a bigger than expected interest rate cut of 50 bps from RBNZ to take the official cash rate to a record low of 1.00%.
  • Maintain bearish bias with a tightened key short-term pivotal resistance now 0.6755 for a further potential push down to target the next near-term supports at 0.6675 and 0.6645.
  • However, a clearance above 0.6755 negates the bearish tone for a squeeze up to retest the minor range top at 0.6805 (also the descending trendline from 18 Jul 2019 high).

Charts are from eSignal


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