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
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
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
