Intraday Market Analysis: USDJPY and EURAUD

USDJPY Intraday Trading Strategy

USD in general weakened against a basket of currencies. It all began when the US Consumer Price Index (CPI) missed the market expectations, which lowered the odds of another rate hike from the Fed by the end of the year. President Trump’s failure to amend the US healthcare bill (Obamacare) triggered further weakness in the currency.

USDJPY 4hr Chart

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USDJPY 4hr Chart 23/07/17

USDJPY has re-tested the lower support as seen in the 4hr chart. The positive divergence in the Relative Strength Index (RSI) may suggest the price is due for corrective gains.

We are nevertheless extremely cautious when it comes to USD pairs and crosses as the currency is more fundamentally driven. If a bearish gap does not take place at the opening of the Forex market corrective gains may be seen towards 111.55 where a break above may pave the way for further gains towards 112.00.

A more conservative approach would be to wait for a break above 111.55 but if we dismiss the fundamental end of the market the current support is expected to hold if no significant gaps are seen at the opening.

Should a bearish gap take place but the price remains above 110.75 a break above 111.55 may be required to affirm further gains in USDJPY.

EURAUD Intraday Strategy Strategy

EURAUD benefited from EURUSD rally as the gains firmed EUR against a basket of currencies.

EURAUD 4hr Chart

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EURAUD 4hr Chart 23/07/17

EURAUD intrday strategy requires further clarification. The key intraday resistance is seen at 1.4760. The cross is currently positioned for a bearish retracement but we must highlight there is no short entry. A break below 1.4680 may indicate further weakness may be seen towards 1.4625 and is the only possible short entry in EURAUD.

A re-test of 1.4625 may trigger moderate gains in the cross, targeting 1.14760 where a break above paves the way for stronger gains towards 1.4855.

A successful break above 1.4760 may suggest the price is due to correct higher without posting corrective weakness, the target remains the same (1.4855).

Our impression is that the Australian CPI, which is followed by a speech from RBA Lowe may be the fundamental trigger for AUD weakness. In an event EURAUD gaps above 1.4760 at the opening of the Forex market a re-test of 1.4760 is required (preferably a 4hr close) to validate the signal of the intraday strategy.

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