The Kickstart video for August 1 take a technical look at the 3 major currency pairs – the EURUSD, USDJPY and GBPUSD.
The EURUSD moved lower in sympathy with the GBPUSD before the BOE rate decision. THe BOE did cut rates by 25 basis points by the smallest of margins (5 for, and 4 against a cut) .The final move lower after the decision, took the price below its 100-day moving average for the first time since July 4 at 1.07926, but found buyers near the 61.8% retracement of the move up from the June low at 1.07727. The subsequent move to the upside has now taken the price above its 100-day moving average at 1.07926. The next topside resistance is now at the 50% midpoint of the same move higher at 1.0806. Going forward today, both the 100-day moving average and the 50% retracement will be key barometers for buyers and sellers at 1.07926 and 1.0806 respectively. Use them to determine the short term bias.
The USDJPY broke below a swing year between 149.20 and 149.649 in the early Asian session. Recall from yesterday, that area did find support buyers. The break sent the price down to test the 61.8% retracement of the move up from the December 2023 low. That level came in at 148.53. With dip buyers leaning at the support target, the price rotated quickly to the upside. The 50% of the same move to the downside is now topside resistance at 151.093. The move higher, despite lower yields after the weaker initial jobless claims and lower second-quarter unit labor costs, could limit the upside. However, the pair has come a long way from the highs 4-5 weeks ago at 161.94. So there may be some desire to take profits after BOJ policy adjustments this week and the Fed decision. Technicals help tell the story.
As mentioned, the Bank of England cut rates by 25 basis points. The price of the GBPUSD already moving to the downside ahead of the rate decision . The cuts at the price lower but the 38.2% retracement 1.27592 stalled the fall along with the low of a swing area near 1.2754 (the low extreme reached 1.2751 before snapping back to the upside). The 200 bar moving average on the 4-hour chart at 1.28026 and a swing area near 1.28168 and 1.28272 is now topside resistance. This week there was a lot of up and down between 1.2810 and 1.2860. That area may prove to be a level that may keep a lid on the pair.