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April 1st 2021: USD/JPY Clocked 1-Year High, Aided by a Modest Bid in US Treasuries

By:
Aaron Hill
Published: Apr 1, 2021, 00:21 UTC

Bolstered by US Treasuries and the DXY erasing losses, USD/JPY bulls remained on the offensive and recorded a sixth successive bullish close. H4 demand at 110.19/110.44 is likely in view today

World currency exchange rates on world map

Note—Charts provided by Trading View

EUR/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

As we draw the curtain on March, EUR/USD is lower by 2.7 percent and engages with 1.1857/1.1352 demand.

A decisive rebound from the aforesaid demand shifts attention to the possibility of fresh 2021 peaks and a test of ascending resistance (prior support – 1.1641). Extending lower, on the other hand, shines the technical spotlight on trendline resistance-turned support, taken from the high 1.6038.

In terms of trend, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

Quasimodo support from 1.1688 remains within touching distance, following last Wednesday slicing through the 200-day simple moving average (movement generally interpreted as a bearish signal). Any buying in this market, therefore, is likely to target the underside of the SMA.

In terms of the RSI oscillator, the value hovers within close range of oversold space, currently hovering around 34.00.

H4 timeframe:

As aired in Wednesday’s technical briefing, demand at 1.1681/1.1725 made an entrance on Tuesday, which, as you can see, sparked bullish bets on Wednesday. Resistance at 1.1779 calls for attention should buyers remain in the driving seat, followed by another layer of resistance at 1.1818, along with trendline resistance, extended from the high 1.2242.

H1 timeframe:

As a result of recent upside, resistance at 1.1762 is within touching distance, a level drawing additional (dynamic) resistance from a 100-period simple moving average at 1.1759. To the downside, 1.17 psychological support is visible.

Movement out of the RSI oscillator has the value piercing trendline resistance, taken from the peak 73.00.

Observed levels:

For those who read Wednesday’s technical briefing you may recall the following (italics):

Daily Quasimodo support at 1.1688—joined closely with the 1.17 figure on the H1 as well as being held within H4 demand at 1.1681/1.1725—serves as an area of confluence buyers may be drawn to.

The above remains valid. In addition, let’s take into account monthly price is toying with demand at 1.1857/1.1352.

As for resistance to be mindful of, H1 resistance at 1.1762—joined nearby H4 resistance at 1.1779—is likely on the radar.

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AUD/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

February finished considerably off best levels, establishing what many candlestick fans call a shooting star pattern—a bearish signal found at peaks. What’s interesting was February came within striking distance of trendline resistance (prior support – 0.4776), sheltered under supply from 0.8303/0.8082.

As March draws to a close, the pair trades lower by 1.3 percent, probing February’s lows. Should sellers take the reins going forward, demand is in view at 0.7029/0.6664 (prior supply).

With respect to trend (despite the trendline resistance [1.0582] breach in July 2020), the primary downtrend (since mid-2011) remains in play until breaking 0.8135 (January high [2018]).

Daily timeframe:

Partly modified from previous analysis.

Tuesday’s bearish outside reversal—although considered a bearish cue—failed to trigger follow-through downside on Wednesday (price remained within Tuesday’s range).

In case sellers regain consciousness, taking aim at demand from 0.7453/0.7384 (dovetailing closely with a 100% Fib extension at 0.7465 and a 1.618% Fib projection at 0.7389) is perhaps a possibility. Technicians will also note the 200-day simple moving average circling nearby at 0.7376.

In the event buyers regain footing, trendline support-turned resistance is visible, pencilled in from the low 0.5506, along with supply from 0.8045/0.7985.

As for the RSI oscillator, upside momentum remains slack, despite balancing off channel support, drawn from the low 43.70.

H4 timeframe:

Largely unchanged from previous analysis.

Quasimodo support at 0.7592 re-entered the frame, following a one-sided dip from peaks at 0.7664 on Tuesday. Buyers are still seen attempting to find acceptance around 0.7592.

Increased interest to the upside swings the pendulum in favour of a test of supply from 0.7696/0.7715, an active zone in play since late January (plotted just south of the 38.2% Fib level at 0.7731 and a 61.8% Fib level from 0.7741).

Failure to defend 0.7592 highlights another layer of Quasimodo support at 0.7529.

H1 timeframe:

Following a retest at resistance from 0.7622 on Wednesday, shaped by way of a shooting star candle pattern (bearish signal), sellers are attempting to push through any bids around 0.76.

Taking on space under 0.76 throws light on Quasimodo support at 0.7578, followed by demand plotted at 0.7546/0.7555. Surrounding the upper side of the aforesaid demand is a 1.272% Fib extension at 0.7561 and a 100% Fib extension at 0.7555.

The view out of the RSI delivers a relatively bearish tone, crossing under the 50.00 centreline. This highlights a possible visit to oversold levels, in particular support at 19.40.

Observed levels:

Partly modified from previous analysis.

The monthly timeframe threatening lower prices, together with Tuesday’s daily bearish outside reversal and the H1 poised to take on 0.76, places a question mark on H4 Quasimodo support at 0.7592.

The above may lead sellers to target H1 Quasimodo support at 0.7578 and H1 demand at 0.7546/0.7555.

Another scenario to be mindful of is a 0.76 retest as resistance, a move likely to welcome additional short-term bearish flow.

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USD/JPY:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

Following January’s bullish engulfing candle and February’s outperformance, March concluded up by around 4 percent and shook hands with descending resistance, etched from the high 118.66. Any sustained upside here highlights the possibility of continuation moves to as far north as 126.10/122.66 supply.

To the downside, support inhabits 101.70.

Daily timeframe:

Bolstered by a modest advance in US Treasuries and the US dollar index erasing earlier losses, USD/JPY bulls remained on the offensive Wednesday and recorded a sixth successive bullish close.

Consequent to the above, supply at 110.94/110.29 is under siege, with subsequent outperformance shining light on possible supply at 111.73/111.19. Should sellers make an appearance, support at 109.38 represents a possible target, a previous Quasimodo resistance.

In terms of trend on the daily scale, we have been higher since early 2021.

Latest developments also witnessed the RSI climb within overbought terrain and end the session on the doorstep of resistance at 83.02.

H4 timeframe:

Buyers mounting another assault on Wednesday placed supply at 110.85/110.46 (housed within daily supply at 110.94/110.29) on shaky ground.

Also unfortunate for any sellers around current supply is price seen testing demand at 110.19/110.44. This is an important zone given within this area a decision was made to push beyond supply. This echoes strength and, therefore, the retest of the area currently holding should not be a surprise.

H1 timeframe:

110.50 support served buyers well on Wednesday, withstanding a downside attempt heading into US hours, which missed nearby demand at 110.27/110.39. This demand is notable—representing a decision point to breach offers around 110.50.

Buyers currently show promise north of 110.50, setting the stage for a possible test of 111.

From the RSI oscillator, support is in play between 47.36 and 55.21 (common support range in trending environments).

Observed levels:

Monthly descending resistance on the verge of giving way, daily supply at 110.94/110.29 hanging by a thread as well as H4 demand entering the frame at 110.19/110.44 (placing H4 supply at 110.85/110.46 in a difficult situation) echoes a bullish vibe.

As a result, H4 demand at 110.19/110.44 is likely in view today, with traders potentially expecting a bullish theme to emerge.

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GBP/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

The pendulum swung in favour of buyers following December’s 2.5 percent advance, stirring major trendline resistance (2.1161). February followed through to the upside (1.7 percent) and refreshed 2021 highs at 1.4241, levels not seen since 2018.

Contained within February’s range, March snapped a five-month winning streak and formed what candlestick fans call an inside pattern—represents a short-term consolidation with low volatility. A breakout lower tends to be considered a bearish signal.

Despite the trendline breach, primary trend structure has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way (April high 2018).

Daily timeframe:

Largely unchanged from previous analysis.

Technical structure shows Quasimodo support at 1.3609 calls for attention to the downside, while upriver we can see trendline support-turned resistance, extended from the low 1.1409.

RSI action has the value retesting the lower side of familiar resistance between 46.21 and 49.16.

H4 timeframe:

Sterling closed out March advancing against the US dollar, adding a modest 0.3 percent.

Technically, this shines the spotlight on resistance at 1.3852, a level joined by an ascending resistance, taken from the low 1.3778, a 50.0% retracement at 1.3834 and trendline resistance, drawn from the high 1.4240 (green).

Any decisive selling shifts focus to the 127.2% Fib extension at 1.3649 and Quasimodo support at 1.3611.

H1 timeframe:

US trading on Wednesday crossed swords with the lower side of 1.38, which, despite a number of upside attempts, held into the session close. However, with the 100-period simple moving average lurking around 1.3766, a move north of 1.38 may form to approach tested supply at 1.3851/1.3833.

Momentum, as measured by the RSI oscillator, turned south ahead of overbought space yesterday, currently trading around 58.00.

Observed levels:

Short-term analysis throws light on H4 resistance at 1.3852. Not only does the level share space with additional H4 resistances, H1 supply is noted nearby at 1.3851/1.3833.

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About the Author

Aaron Hillcontributor

Aaron graduated from the Open University and pursued a career in teaching, though soon discovered a passion for trading, personal finance and writing.

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