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USD Stays Bullish Against AUD, NZD and JPY (Despite Erratic Activity since Yuan Devaluation)

Technical Analysis

 

The US currency has seen whipsaw price action so far this week. The Chinese devaluation of the Yuan; the subsequent equity market breakdowns and Bond market rallies leave the USD generally with a still bullish outlook virus the Australian and New Zealand Dollars and against the Japanese Yen. However, erratic consolidation is more likely for the balance of this week.

AUDUSD

  • An aggressive sell after the Chinese Yuan devaluations to a new cycle low has negated the positive tone from last week and although we see bias for a rebound into Thursday, we see an underlying bear trend intact.

Short/ Intermediate-term Outlook – Downside Risks:

  • Whilst below .7499 we see a negative tone resurfacing with the bearish threat to .7269 and .7091.
  • Break sees psychological .7000.

Daily AUDUSD Chart

AUDUSD

NZDUSD

  • The Tuesday-Wednesday breakdowns after the Chinese Yuan devaluations has re-energizes the underlying bear theme into August.
  • However, the intraday rebound effort leaves a neutral consolidation theme for Thursday.

Short/ Intermediate-term Outlook – Downside Risks:

  • We see a negative tone with the bearish threat to longer term targets at .6404 and .6196/54.
  • Overshoot threat is lower to maybe .6000.

Daily NZDUSD Chart

NZDUSD

USDJPY

  • Initial upside pressures Wednesday have reinforced the firm rebound this week to a new rebound high.
  • But the setback and then bounce Wednesday leaves a neutral tone for Thursday.

Short/ Intermediate-term Outlook – Upside Risks:

  • We see a more positive tone with the bullish threat to 125.85.
  • Above here targets 129.08, 130.00 and 132.23.

4 Hour USDJPY Chart

USDJPY

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