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01Aug

DAILY TECHNICAL ANALYSIS FOR AUGUST 01, 2022

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EUR/USD

Current level – 1.0235

The consolidation of the EUR/USD continued in the early hours of today’s trading session and the pair is still locked in the zone between 1.0114 – 1.0272, as neither the bears, nor the bulls can gain enough momentum to lead the pair out of this range. Only a confirmed breach of either border of the channel may give investors an outlook on the future path of the pair. If the bulls manage to overcome the critical resistance at 1.0272, then an impulsive upward movement towards the next resistance at 1.0446, and even an attack on the next level at 1.0447, can be expected. However, if the bears manage to lead the pair out of this range by violating the support at 1.0114, then the psychological level at 1.0000 could be easily reached and the downtrend may resume, leading to a further depreciation of the single European currency – a highly possible scenario at the moment, considering the overall worsening of the economic situation in the European Union and the surging inflation. The formed consolidation phase seems to be solid and thus fake breaches of the range may occur, so investors need to be cautious when entering their positions.

USD/JPY

Current level – 132.37

The successful breach of the key support level at 134.65 allowed the bears to test the critical support at 132.25. However, the bears would have to prevail first and thus only a successful breach of this level would pave the way for the USD/JPY towards the support at 130.50. The expectations for today’s trading session are for the pair to bounce back from this support zone and to form a local resistance at around 133.50. A correction towards the resistance at 134.65, before a potential resumption of the downtrend, is highly possible. Only, if the bears manage to violate the support at 132.25, however, may we witness a deepening of the sell-offs and a test of next support at 130.50.

GBP/USD

Current level – 1.2191

The resistance zone at 1.2200 appeared to be a considerable obstacle for the bulls and the pair is currently holding positions below this level. A consolidation in the 1.2200 – 1.2100 range is a highly possible scenario for today’s trading session. In case of a confirmed breach of the resistance at 1.2200, we may expect a possible bull attack on the next significant resistance at 1.2280. However, the expectations are for the mentioned zone to resist the bull pressure and for the bears to make another attempt to overcome the psychological level at 1.2100, where a successful breach would present sellers with a good opportunity to enter the market and target the key support at 1.2035.

Gold price negotiates the resistance 

Gold price settles at the main bearish channel’s resistance and finds difficulty to breach it, which makes us prefer to stay temporarily until we get clearer signal for the next trend, which we will get through breaching the mentioned resistance -located now at 1767.70- or breaking 1755.70 support.

The contradiction between the technical indicators provides another reason for neutrality, noting that breaching the mentioned resistance will push the price to achieve additional gains that start at 1779.25 and extend to 1800.00, while breaking the support represents the key to resume the main bearish wave and head to achieve negative targets that start at 1726.60.

The expected trading range for today is between 1740.00 support and 1780.00 resistance.

The expected trend for today: Neutral

Source: Technical analysis

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