FOREX Technical Outlook 06 Aug

Posted: August 6, 2014 in Forex

The EUR/USD pair fell during the session on Tuesday, testing the lows 1again and even managed to break them at one point during the day. This market looks a very broken at this point, and we see no reason whatsoever why this market shouldn’t head back down to the 1.33 level. In fact, we believe that short-term rallies will be opportunities to sell this pair, as the US dollar continues to reign supreme. In fact, we believe that this market will find a ton of resistance above the 1.35 handle as well, and as a result we are bearish, even if we rally.
The GBP/USD pair initially tried to fall during the session on Tuesday,2 but as you can see found enough support to turn things back around and form a hammer. This hammer of course is very positive, and as a result a move above the top of it should send this market much higher. The 1.68 level seems to have held as support, and as a result we figure that the market will probably head to the 1.70 level next.
The AUD/USD pair initially tried to rally during the day on Tuesday, 3but failed and turned back around and form a slightly negative candle. However, we are sitting on top of the 0.93 handle, and as a result it’s likely that the market will find some type of support between here and the 0.92 handle. We would be buyers of a supportive handle, but obviously do not have it yet. If we do fall below the 0.92 handle however, we would be sellers of the market as it should then head to the 0.90 level.
The USD/JPY pair had a very volatile session on Tuesday, but ultimately showed the 103 level to be resistive. 4Because of this, we ended up forming a shooting star, which of course is a relatively negative sign. At the end of the day though, we are in consolidation, so it’s hard not to look at this as a simple pullback waiting to happen, and not much more. We would be buyers below on supportive candles, as we think the buyers should continue to step into the market as they have the entire year once the pair falls.
Data Update for 6th Aug 2014

Time Currency Impact Particular Actual Forecast Previous
4:15am NZD High Employment Change q/q 0.40% 0.70% 0.90%
NZD High Unemployment Rate 5.60% 5.80% 5.90%
NZD Labor Cost Index q/q 0.60% 0.50% 0.30%
4:31am GBP BRC Shop Price Index y/y -1.90% -1.80%
10:30am JPY Leading Indicators 105.50% 105.50% 104.80%
11:30am EUR German Factory Orders m/m -3.20% 0.50% -1.60%
12:30pm GBP Halifax HPI m/m 1.40% 0.50% -0.40%
12:45pm CHF CPI m/m -0.40% -0.50% -0.10%
1:30pm EUR Italian Industrial Production m/m 0.90% 0.90% -1.20%
1:40pm EUR Retail PMI 47.6 50
2:00pm GBP High Manufacturing Production m/m 0.30% 0.70% -1.30%
GBP Industrial Production m/m 0.30% 0.60% -0.60%
2:30pm EUR Italian Prelim GDP q/q -0.20% 0.10% -0.10%
6:00pm CAD Trade Balance

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