Mid-Week Technical Outlook: Majors & Minors

There was an uneasy calm across financial markets on Wednesday as investors exercised caution ahead of the Jackson Hole Symposium this week.

European stocks were mixed, the dollar stabilised while gold prices wobbled above $1740 ahead of Federal Reserve Powell’s speech on Friday. The central bank head is expected to strike a hawkish note which may reinforce aggressive rate hike bets – ultimately boosting the dollar. In the event of an unexpected ‘dovish’ Fed pivot, the dollar could be dealt a heavy blow.

Given how this major event could inject markets with fresh volatility, this may present some opportunities across the FX space. If heavy technicals are what you seek, then check out the setups below covering major and minor currencies.

Dollar bulls back in action

Despite yesterday’s selloff, the dollar continues to flex its safe-haven muscles ahead of this week’s potential market shaker. Prices are heavily bullish on the daily charts as there have been consistently higher highs and higher lows. A strong move above 109.14 may encourage an incline towards 109.70 and 110.00, respectively. Should prices slip back under 108.00, bears may target 107.30.

Equally weighted USD Index on standby…

Prices are likely to hover around the 1.1950 regions until a fresh directional catalyst is brought into the picture. Should this level prove to be reliable support, a move towards 1.2080 and 1.2184 could be expected. Below 1.1950, bears are likely to target the 50-day SMA and 1.1700, respectively.

EURUSD kisses 0.9900

After securing a solid daily close below parity, euro bears have marked their territory. The currency pair is heavily bearish on the daily timeframe with 0.9900 still a key level of interest. A breakdown below this level could encourage a selloff towards 0.9650 which acted as strong support back in the autumn of 2002. Should 0.9900 prove to be reliable support, prices could experience a bounce back to parity before resuming the selloff.

GBPUSD bears in control for now

Bears remain in the driving seat with prices wobbling above 1.1760 as of writing. The GBPUSD is under pressure on the daily charts with a break below 1.1760 opening the doors to 1.1700 and 1.1600. A move back above 1.1900 is seen triggering a move higher towards 1.2000.

AUDUSD back within range

An appreciating dollar could drag the AUDUSD out of its current range with a breakdown below the 0.6850 support opening a path back towards 0.6700. Should 0.6850 prove to be a tough nut to crack, prices may rebound back towards 0.7000.

USDJPY to resume uptrend?

The USDJPY is bullish on the daily charts. Prices are trading above the 50, 100, and 200-day Simple Moving Average while the MACD trades above zero. A solid break above 137.50 could trigger a move towards 139.38. Under 135.00, prices are seen testing 131.34.

EURGBP dips below 200-day SMA

As the subtitle says, the EURGBP is trading below the 200-day Simple Moving Average. This is a bearish sign and could result in further downside if 0.8440 proves to be reliable resistance. A EURGBP selloff may take prices back towards 0.8340.

GBPJPY respects bearish channel

Expect the GBPJPY to drift lower if prices fail to push above 162.00. A strong breakdown under 160.00 may signal a selloff towards the 200-day SMA at 159.00 and 157.50, respectively.

CADJPY supported above 104.80

We could see the CADJPY push higher if 104.80 proves to be reliable support. If prices use this level to push higher, the next key level of interest can be found at 107.50. A selloff below 104.800 could open the doors back towards the 100-day SMA and 102.00, respectively.

EURUSD AUDUSD GBPUSD USDJPY EURGBP DXY