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Daily Pivots: (S1) 1.1474; (P) 1.1541; (R1) 1.1588; More...

GBP/USD down trend resumed after brief recovery and intraday bias is back on the downside. Firm break of 1.1409 long term support will pave the way to 61.8% projection of 1.3748 to 1.1759 from 1.2292 at 1.1063 next. On the upside, however, break of 1.1608 minor resistance should now indicate short term bottoming, and turn bias back to the upside for stronger rebound.

In the bigger picture, based on current momentum, fall from 1.4248 (2018 high) is probably resuming long term down trend from 2.1161 (2007 high). Sustained break of 1.1409 will target 61.8% projection of 1.7190 (2014 high) to 1.1409 (2020 low) from 1.4248 (2021 high) at 1.0675. This will remain the favored case for now as long as 1.2292 resistance holds.

Daily Pivots: (S1) 0.9786; (P) 0.9824; (R1) 0.9881; More...

No change in USD/CHF's outlook as further rally is expected as long as 0.9691 support holds. On the upside, break of 0.9884 resistance will argue that larger up trend is ready to resume through 1.0063 high. On the downside, however, break of 0.9691 minor support will dampen this view and turn bias back to the downside for 0.9469 support instead.

In the bigger picture, current development suggests that up trend from 0.8756 (2021 low) is still in progress. Sustained break of 1.0063 will target 100% projection of 0.9149 to 1.0063 from 0.9369 at 1.0283, and then 1.0342 (2016 high). For now, this will remain the favored case as long as 0.9369 support holds, even in case of deep pull back.

Daily Pivots: (S1) 141.01; (P) 142.04; (R1) 143.83; More...

Intraday bias in USD/JPY remains on the upside for 147.68 long term resistance. Break there will target 161.8% projection of 126.35 to 139.37 from 130.38 at 151.44 next. On the downside, below 142.67 minor support will turn intraday bias neutral and bring consolidations, before staging another rally.

In the bigger picture, up trend from 101.18 is still in progress, as part of the whole up trend from 75.56 (2011 low). Further rise should be seen to 147.68 (1998 high). For now, break of 130.38 support is needed to be the first indication of medium term topping. Otherwise, outlook will stay bullish even in case of deep pull back.

King dollar continues to dominate on Wednesday, hitting a new highest in two decades against the basket of major world currencies and 24-year high against yen, strongly underpinned by several factors.

Rising bets that the US central bank will keep aggressive stance in the policy meeting this month, safe-haven buying on growing global uncertainty inflate the greenback, while the most recent better-than-expected \US data showed solid conditions in the services sector, adding to the view that the economy is not in the recession but in a stronger slowdown.

Bullish technical picture on all larger timeframes, contribute to positive outlook.

Bulls eye target at 112.85 (Fibo 161.8% projection of the rally from 2021 low at 89.15 and May 2002 high at 115.34.

Broken psychological 110 support and rising 10DMA (109.31) should keep the downside protected.

Res: 111.00; 112.00; 112.85; 115.35.
Sup: 110.00; 109.31; 108.21; 107.43.

US exports rose USD 0.5B to USD 259.3B in July. Imports dropped USD -9.7B to USD 329.9B. Trade deficit narrowed from USD -79.6B to USD -70.6B, versus expectation of USD -70.2B. The decrease in goods and services deficit reflected a decreased in goods deficit to USD -91.1B, and an increase of service surplus to USD 20.4B.

Goods deficit with EU decreased USD 5.7B to USD -11.9B. Deficit with China decreased USD 3.9B to USD -33.0B. Deficit with Mexico increased USD 2.0B to USD -11.7B.

Full release here.

Canada merchandise exports dropped -2.8% mom to CAD 68.3B in July. That's the first contraction in 2022, with declines observed in 6 of 11 production sectors. Total imports dropped -1.8% mom to CAD 64.2B, the first decline since January. Contractions were observed in 7 of the 11 production sections.

Trade surplus narrowed from CAD 4.9B to CAD 4.1B, larger than expectation of CAD 3.8B.

Full release here.

The US Dollar remained in a bullish zone and started a fresh increase above the 140.00 resistance against the Japanese Yen. The USD/JPY pair traded above the 142.00 level to extend gains.

The pair traded to a new multi-year high above the 143.50 level and is still well below the 50 hourly simple moving average. It is now consolidating near the 144.00 level, with an immediate resistance at 144.20 on FXOpen.

The first major resistance is near the 145.50 zone. A clear break above the 144.50 resistance could push the price towards 145.00. The next major resistance is near the 145.80 level.

On the downside, an initial support is near the 143.20 zone. The next major support sits near the 142.20 level and a connecting bullish trend line on the hourly chart, below which there is a risk of more downsides towards the 141.50 level.

EURCAD has been trending downwards since the strong rejection near February’s descending trendline and the 1.3243 level at the start of the month, while also failing to attract enough buying interest to climb back above its simple moving averages (SMA) in the four-hour chart over the past few days.

The technical signals remain neutral-to-bearish ahead of the Bank of Canada’s rate announcement due at 14:00 GMT today given the RSI’s sideways trajectory marginally below its 50 neutral mark and the flattening MACD, which keeps fluctuating around its red signal line and below zero.

Nevertheless, the bulls might have another chance to fight back if the tentative support trendline at 1.3000 stands firm once again. In case it cracks though, the 1.2960 barrier may provide some footing. Otherwise, the bearish wave could pick up steam towards August's nine-year low of 1.2874 and the nearby 1.2845 handle, a break of which may strengthen the long-term downtrend towards the 1.2720 barrier last seen at the end of 2012.

On the upside, the 1.3050 – 1.3080 zone will be closely watched. A successful move above that wall could gain another leg towards the intraday swing high of 1.3163, though only a decisive close above the trendline and the 1.3200 round level would boost buying confidence in the market. Higher, the bulls will try to challenge the neutral trajectory above the 1.3246 – 1.3290 resistance zone.

In brief, EURCAD traders are looking indecisive in the short-term picture at the moment, likely waiting for a close below 1.3000 or above the 1.3050-1.3080 region to navigate the market accordingly.  

The USDJPY extends fresh and steep acceleration into third straight day and hit new 24-year high on Wednesday.

The dollar continues to rise across the board, driven by high expectations for another aggressive Fed hike this month and continuous flow into safety on growing global economic uncertainty.

Firmly bullish technical studies add to positive outlook, with last week’s close above psychological 140 barrier and subsequent acceleration higher \(the pair was up 3% since Monday opening), reinforcing bullish signals.

Bulls eye immediate target at 144.90 (July 1998 high), with August 1998 peak (147.68) coming in focus.

Corrective dips on overbought conditions are expected to provide better buying opportunities and should find ground above 140 zone (daily Tenkan-sen / psychological).

Res: 144.90; 146.26; 147.00; 147.68
Sup: 142.67; 142.00; 141.64; 140.33

AUD/USD has posted slight losses today, trading at 0.6726. This follows a disastrous Tuesday, when the Aussie fell 0.92%. Earlier, AUD/USD fell as low as 0.6999, its lowest level since July 14th.

Australian GDP within expectations

Australia’s GDP for Q2, released earlier today, has helped stabilize a wobbly Australian dollar. GDP posted a 0.9% gain, just shy of the estimate of 1.0% and above the 0.8% in Q4. Consumer spending remains robust, and the economy was supported by strong export numbers, as commodity prices remain high.

The Australian dollar’s woes seem more a case of US dollar strength than AUD weakness. We are seeing global interest rate continue to head higher, which has dampened the appetite for risk-related assets, such as the Australian currency. An aggressive Federal Reserve, supported by solid US numbers, has boosted the greenback. Tuesday’s US ISM Services PMI rose to 56.9 in August, up from 56.7 in July and higher than the 55.1 estimate. The report pointed to an increase in business activity and strong consumer demand, despite high inflation and rising interest rates.

The RBA delivered a fourth straight hike of 0.50% on Tuesday, but the sizeable increase failed to boost the Australian dollar, as the move had been anticipated by the markets. The Australian dollar has not been responsive to recent RBA moves, losing ground yesterday and after the July meeting. The cash rate is now at 2.35%, which is expected to hit 3% by the end of the year, with further hikes expected in 2023. Today’s move brings rates close to the neutral level of around 2.5%, which means that the RBA is likely to deliver one more 50bp hike and then scale back to 25bp increases, contingent on inflation and the strength of the labour market.

AUD/USD Technical

• 0.6737 is a weak resistance line. Above, there is resistance at 0.6846
• There is support at 0.6661 and 0.6552