(Jing Ren – Orbex)
USD/CHF struggles to rebound
The Swiss franc consolidates as July’s unemployment rate holds steady. A bullish RSI divergence suggests a deceleration in the previous sell-off. Successive breaks above 0.9580 and 0.9630 prompted the short side to cover and reconsider. Sentiment may turn around if the greenback stays above the demand zone near 0.9500. A close above the double top at 0.9650 would extend the rally towards 0.9810 next to the July peak. On the downside, a bearish breakout could trigger a new round of liquidation towards 0.9350.
NZD/USD seeks support
The New Zealand dollar loses steam after a slowdown in inflation expectations. The price is at a crossroads after the recent rally came to a halt in the supply zone (0.6350), while a bullish MA cross on the daily chart may attract more buying interest. A rally above 0.6310 and the said hurdle could propel the kiwi to June’ high at 0.6560, alleviating the downward pressure in the medium-term. 0.6190 is a key support as the bulls look to consolidate their gains. Further down, 0.6120 is a critical floor to keep the current rebound intact.
US 30 tests major ceiling
The Dow Jones 30 treads water as strong US jobs data may underpin aggressive tightening. The index has found bids over 32500. June’s high at 33300 is a major resistance. The RSI’s repeated overbought condition may cause a pullback as profit-taking meets fresh selling in the supply zone. A bullish breakout would trigger momentum buying and flush out a slew of medium-term sellers, which would pave the way for an extended recovery in the weeks to come. A fall below 32500 would trigger a correction towards 32000.
Daily technical and trading outlook – EUR/USD
Trend daily chart
Rising fm o/s
21 HR EMA
55 HR EMA
Trend hourly chart
13 HR RSI
14 HR DMI
Consolidation with downside bias.
1.0293 – Last Tue’s near 4-week high.
1.0253 – Last Thur’s high.
1.0221 – Mon’s high.
1.0142 – Last Fri’s low.
1.0124 – Last week’s low (Wed).
1.0097 – Jul 27 low.
EUR/USD – 1.0197.. Although euro moved narrowly initially y’day following selloff in post-NFP NY to 1.0142 Fri, price met buying at 1.0160 in Asia n then ratcheted higher to 1.0221 in NY on broad-based usd’s weakness b4 retreating.
On the bigger picture, despite euro’s LT upmove fm 2017 near 14-year low of 1.0341 to a fresh 3-year peak of 1.2555 in mid-Feb 2018, decline to a near 3-year 1.0637 low (Mar 2020) signals correction has ended. Although euro staged a rally to a near 33-month 1.2349 peak in early Jan 2021, subsequent selloff to 1.1705 (Mar) signals top is made. Euro’s break of 1.1705 n then firm breach below 2020 bottom at 1.0637 in Apr to a 5-year bottom of 1.0350 in mid-May n then break of 2017 trough of 1.0341 to a 20-year low of 0.9953 in mid-Jul suggests price would head twd 0.9860 later next month, reckon 0.9640 should hold. Only a daily close abv 1.0360 confirms temporary low is made, risks 1.0462, abv, 1.0542.
Today, euro’s rise fm 1.0142 to 1.0221 n then retreat to 1.0185 suggests choppy swings inside 1.0124-1.0253 broad rnage would continue with downside bias , below 1.0142 would bring re-test of 1.0124 but break needed to indicate correct ion fm 0.9953 over, 1.0097. Only abv 1.0221 risks 1.0253, break, 1.0275/85 later.