Daily Forex Technical Strategy (Tues 10 Sep)

Mix bag with further strength seen in EUR/USD & GBP/USD.

EUR/USD – Further corrective rebound in play


click to enlarge chart

  • The pair has drifted lower and hit the short-term downside target/support of 1.1000 as per highlighted in our previous report (click here for a recap).
  • Since last Tues, 03 Sep, it has staged a bounce of 160 pips to print a high of 1.1085 on 05 Sep before it traded sideways with a minor low of 1.1018. This minor sideways range represents 38.2% Fibonacci retracement of the recent rebound from 03 Sep low to 05 Sep 2019 high.
  • Bullish bias in any dips above 1.1000 key short-term pivotal support for another potential  upleg of the corrective rebound phase to target the next resistances at 1.1095 and 1.1170 (76.4% Fibonacci retracement of the decline from 06 Aug high to 03 Sep  2019 low & close to an intersection point of the descending resistance from 10 Jan 2019 high & former minor range support from 06 Aug 2019). However, a break with an hourly close below 1.1000 negates the bullish tone to retest 1.0925.

GBP/USD – Further potential push up towards key resistance



click to enlarge charts

  • The pair has staged the expected bearish breakdown and hit the downside target/support of 1.2000/1950 as per highlighted in our previous report. It has printed a low of 1.1959 on 03 Sep 2019 before it staged a rebound of 428 pips to print a high of 1.2385 yesterday, 09 Sep.
  • Bullish bias in any dips above 1.2245 key short-term pivotal support for a further potential push up to target the key resistance of 1.2510/2570 (upper boundary minor ascending channel from 03 Sep 2019 low & former major ascending support from 07 Oct 2016 low).
  • However, a break with an hourly close below 1.2245 negates the bullish tone to retest 1.2000/1950.

USD/JPY – Bullish breakout from minor range configuration


click to enlarge chart

  • The pair has staged a bullish breakout above the 107.00 key short-term resistance (also the upper limit of the minor range configuration in place since 06 Aug 2019) that has invalidated the preferred short-term bearish scenario to retest 104.65/40.
  • Flip to a bullish bias in any dips above 106.60 key short-term pivotal support for a further corrective bounce to target the next intermediate resistance at 108.45(Fibonacci retracement/expansion cluster & upper boundary of the minor ascending channel from 26 Aug 2019 low).
  • However, a break with an hourly close below 106.80 indicates a failure bullish breakout for another round of choppy slide back towards 105.60 and even 104.65/40 next.

AUD/USD – Recent push up looks “overstretched”


click to enlarge chart

  • The pair has staged a breakout above 0.6780 and squeezed up towards the alternate target/resistance of 0.6865 as per highlighted in our previous report (printed a high of 0.6875 yesterday, 09 Sep).
  • Right now, short-term elements are highlighted the risk of a mean reversion pull-back with a bearish divergence signal seen in the hourly RSI oscillator at its overbought region. 0.6875 key short-term pivotal resistance for a potential slide to target 0.6810 and a break below it exposes 0.6760 next.
  • However, a clearance with an hourly close above 0.6875 sees the continuation of the corrective rally towards 0.7000 next (upper boundary of the descending channel from 03 Dec 2018 high).

Charts are from eSignal


Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.