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Daily Technical Insights 5 August 2022



Despite the US dollar coming under selling pressure amid dismal Initial Jobless Claims data on Thursday, the pair USD/CAD witnessed some upside momentum and climbed to a daily top above the 1.287 mark in the early US trading session. USD/CAD is trading at 1.28671 at the time of writing, rising 0.21% daily. The market focus now shifts to the Canadian employment conditions report and US Nonfarm Payrolls for July this Friday, as the market mood is mixed after US House Speaker Pelosi’s trip to Taiwan. On top of that, the falling crude oil prices also undermined the commodity-linked loonie and pushed the USD/CAD pair higher as WTI tumbled back to the US$88 per barrel area. Investors started to seek safety as the regional tensions escalated.

For the technical aspect, the RSI indicator is 51, suggesting the pair’s indecisiveness in the near term as the RSI indicator stays near. For the Bollinger Bands, the price lost its upside strength and dropped toward the moving average, therefore a continuation of the downside trend could be expected. In conclusion, we think the market will be bearish as long as the 1.2885 resistance line holds. The falling RSI also reflects bear signals.

Resistance: 1.2885, 1.2944, 1.2986

Support: 1.2823, 1.2785


The EUR/USD pair advanced on Thursday, regaining upside momentum and rebounded from a weekly low below the 1.013 mark that touched yesterday amid the current rebound in the risk complex. The pair is now trading at 1.02106, posting a 0.46% gain daily. EUR/USD stays in the positive territory amid a weaker US dollar across the board, as the falling US Treasury bond yields and the disappointing Jobless Claims data exerted bearish pressure on the greenback. The US Weekly Initial Jobless Claims rise to 260K, which came in slightly worse than the market expectation of 259K. But the recent hawkish stance from several Fed speakers and expectations for further rate hikes in the following months should limit the losses for the greenback. For the Euro, the IHS S&P Global Germany Construction PMI fell to 43.7 in July.

For the technical aspect, the RSI indicator figures as of writing, suggesting that upside is more favoured as the RSI stays above the mid-line. As for the Bollinger Bands, the price preserved its upside strength and crossed above the moving average, therefore the bullish momentum should persist. In conclusion, we think the market will be bullish as the pair is testing the 1.0221 resistance line. A break above that level might bring additional gains to the pair.

Resistance: 1.0221, 1.0287, 1.0438

Support: 1.0150, 1.0082, 0.9991


The GBP/USD pair edged lower on Thursday, coming under selling pressure and dropped to a daily low below 1.208 level after the announcement of the Bank of England’s policy decision. At the time of writing, the cable stays in negative territory with a 0.17% loss for the day. The BoE decided to raise the benchmark rate by 50 bps to 1.75% as widely expected, which was fully priced in the markets and prompted fresh selling around the cable. For the British pound, the currency remained under bearish momentum amid the dovish BoE policy decision. Investors continue to anticipate further rate hikes after this week. Moreover, BOE Governor Bailey also said that he expects the UK economy to tip into recession in Q4 in the press conference, therefore the pound is likely to have a difficult time finding demand.

For the technical aspect, the RSI indicator is 48 as of writing, suggesting that the bull is preserving strength as the RSI climbs toward the mid-line. The price failed to touch the lower band for the Bollinger Bands and started to rise, indicating that some upside traction can be expected. In conclusion, we think the market will be bullish as the pair is heading to re-test the 1.2178 resistance line. On the upside, additional gains can be expected if the pair breaks above the aforementioned resistance.

Resistance: 1.2198, 1.2277, 1.2317

Support: 1.2050, 1.2002, 1.1897