Technical Update - Bullish break out in AUDUSD and AUDJPY hit by resistance. EURAUD continue downtrend.
Kim Cramer Larsson
Technical Analyst, Saxo Bank
After AUDUSD broke bullish out of its falling wedge formation it has been rejected at around 0.680 which is both the 0.764 retracement of the peak to trough of the wedge, 0.50 retracement of the down trend since June peak AND the 55 SMA. If Monday ends down it could signal a reversal of the bullish break out/rebound.
If Monday ends on the positive note the resistance at around 0.680 could be taken out. If that scenario plays out AUDUSD is likely to extend its rebound to key resistance at around 0.7069.
AUDJPY got rejected at the 0.764 retracement of the falling wedge breakout at around 95.60, currently trading at the 0.382 retracement of the uptrend after wedge break out. A correction down to the 0.618 retracement at 93.07 before uptrend resumes is not unlikely.
IF AUDJPY breaks above 95.76 June highs at 96.88 is likely to be tested and taken out.
EURAUD closed Thursday below support at 1.4765. Last week ended with a lot of volatility and could trade most of the last week of July in a fairly wide range between 1.46 and 1.49. A close below 1.46 and selling pressure in EURAUD is likely to be intensified and push the pair down to around 1.4320.
RSI is below 40 supporting the bearish view.
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Tangible assets and profitable growth are the winnersWith US equities officially in a bear market, the big question is where and when is the bottom in the current drawdown?
Understanding the lack of investment appetite among oil majorsThe everything rally seen in recent quarters has become more uneven, as its strength is driven by commodities in short supply.
The pressure is on as the wind leaves the sailsWith cryptocurrencies in sharp decline, are we entering a crypto winter or is the bear market a healthy clean-up of the crypto space?
Why the Fed can never catch up and what turns the US dollar lower?Many other central banks are set to eventually outpace the Fed in hiking rates, taking their real interest rates to levels higher than the Fed will achieve.
Bank of Japan: Swimming against the tideThe Japanese economy has gone from the age of deflation to rapidly rising prices in no time, leaving the Bank of Japan in a pickle.
Green transformation detour and bear market hibernationWith the impending risk of global econonomic derailment, we share the five things investors need to consider in this new half year.
Crisis redux for the eurozone?Whether there's going to be a recession in Europe or not, the path towards a stable economy will be agonizing.
Technical Outlook: Gold, Oil and a remarkable multi-decade perspective on EquitiesThe Nasdaq bubble pattern, USDJPY resistance, crude oil uptrend losing steam and the technical outlook for USD.
China: the train of new development paradigm left the station two years agoChina is transiting to a new development paradigm, as they are hit by deteriorating terms of trade, a slower global economy and an uncertain future while continuing attempts to contain the pandemic.