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Aaron Hill
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Currency

Chart Source: Trading View

EUR/USD:

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Monthly timeframe:

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

Following the three-month retracement slide, demand at 1.1857-1.1352 sparked a bullish revival in April, up 2.6 percent MTD. The possibility of fresh 2021 peaks is on the table, followed by a test of ascending resistance (prior support – 1.1641).

Spinning lower, on the other hand, shines the technical spotlight on trendline resistance-turned support, taken from the high 1.6038.

Based on trend studies, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

A closer reading of price action on the daily timeframe shows the unit pencilled in a healthy bullish advance on Monday, amid intensified USD selling (US dollar index [DXY] approaching 91.00).

Recent outperformance, as you can see, not only extended the bullish position north of the 200-day simple moving average at 1.1906, the move elbowed resistance at 1.2058 into the spotlight, with subsequent buying throwing light on Quasimodo resistance at 1.2169.

Trend studies show the pair has been trending higher since early 2020 (many analysts are likely to refer to this as the primary trend).

RSI analysis shows upside momentum approaching overbought territory.

H4 timeframe:

Following an earlier hammer candle (a bullish formation at troughs) arising just north of support at 1.1937, 1.1990 resistance—a level capping upside since mid-March—stepped aside Monday, consequently unearthing supply at 1.2101-1.2059 which happens to rest on top of daily resistance at 1.2058. Technicians will note that a 1.1990 retest (as support) could materialise prior to testing the aforesaid supply.

H1 timeframe:

Early hours Monday had price stage a one-sided recovery from demand at 1.1956-1.1945, aided by the 100-period simple moving average and RSI support at 35.45. Moves through 1.20, an advance likely catching many short sellers off guard, will likely have technical analysts eyeballing the Quasimodo formation at 1.2070 as a possible resistance (sharing chart space with a 1.618% Fib expansion at 1.2068 as well as a 100% projection at 1.2066).

The view from within the RSI oscillator reveals the value spiked into overbought terrain on Monday and shook hands with highs just south of resistance from 78.97. Note that the indicator concluded the session exiting overbought, a bearish signal among many technical traders. However, with support lurking at 59.66, any downside momentum could be short-lived.

Observed levels:

The combination of daily resistance at 1.2058 and the H1 Quasimodo resistance from 1.2070 (and associated Fib levels) delivers reasonable confluence to the upside. Couple this with H4 supply at 1.2101/1.2059, and sellers may attempt to make an entrance from 1.2070/1.2058, despite monthly price showing some life from demand at 1.1857/1.1352.

AUD/USD:

Monthly timeframe:

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

Since the beginning of 2021, AUD/USD has been consolidating just south of trendline resistance (prior support – 0.4776 high) and supply from 0.8303-0.8082.

Should a bearish move unfold over the coming months, demand at 0.7029-0.6664 (prior supply) is featured to the downside.

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 reading from previous analysis.

The Australian dollar eked out modest gains against a weaker USD to kick off the week, shining the technical spotlight on resistance at 0.7817. North of the latter, supply at 0.8045-0.7985 is on the radar.

Lower on the curve, the 0.7563 February low has delivered support since March 25th.

Momentum remains above the 50.00 centreline, according to the RSI oscillator. Increased upside momentum is likely to elbow things to channel resistance, drawn from the high 80.12.

H4 timeframe:

Partly modified reading from previous analysis.

0.7696-0.7715 demand, once again, served buyers yesterday, powering the currency pair to fresh monthly tops at 0.7784.

Quasimodo resistance at 0.7800 deserves notice as the next potential ceiling, closely stationed beneath demand-turned supply from 0.7848-0.7867.

H1 timeframe:

As evident from the H1 chart, price action recently bottomed a few pips north of the 0.77 figure, a level joined closely by demand at 0.7679-0.7695. This is an important area as it was within this base a decision was made to break above 0.77.

Also technically noteworthy is the 100-period simple moving average at 0.7724 and, of course, the 0.78 figure, which may serve as resistance, should we navigate higher terrain.

RSI movement peaked within overbought territory on Monday, coming within striking distance of resistance at 80.85, before retreating to the 50.00ish neighbourhood. With the immediate trend facing higher, the 50.00 region could deliver a supportive base.

Observed levels:

Daily, H4 and H1 timeframes suggest a short-term bullish phase could emerge, with 0.78ish serving as an upside target, followed by daily resistance at 0.7817. This could stir a dip-buying scenario today, particularly if H1 retests the 100-period simple moving average currently around 0.7725.

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 3.9 percent and marginally cut through descending resistance, etched from the high 118.66.

April, currently down 2.3 percent, is seen attempting to climb back through the breached descending resistance.

Daily timeframe:

Sustained USD weakness, amidst a softer risk tone on Monday, guided USD/JPY lower by 0.5 percent and closed a touch off session lows.

As a result of recent weakness, trendline support, etched from the low 102.59, as well as demand plotted at 107.58-106.85 (prior supply) and a 38.2% Fib level at 107.73 deserves notice. Voyaging into the aforesaid areas today unlocks the possibility of a bullish revival, technically speaking.

In terms of trend on the daily scale, despite decisive selling in April, we have been trending higher since early 2021.

RSI action recently journeyed beneath support at 57.00, and dipped a toe under 40.00 yesterday. This implies momentum remains to the downside for the time being, threatening moves into oversold space.

H4 timeframe:

Thanks to Monday’s squeeze lower—movement that overturned demand at 108.31/108.50—price action crossed swords with interesting demand from 107.81/108.01, which benefits from a Fib cluster around 108ish.

Should the aforesaid technical areas fail to stimulate bullish activity today, support at 107.44 could make an entrance, set within the walls of daily demand mentioned above at 107.58/106.85.

H1 timeframe:

108 welcomed price action heading into US trading hours on Monday, stirring a modest bullish vibe. Reinforced by H4 demand at 107.81/108.01, and the Fib cluster glued to its upper edge, the H1 chart may witness candle action test resistance at 108.39, with a break potentially calling for supply at 108.60/108.71 (and trendline resistance, taken from the high 110.55).

RSI action, as you can see, is circling 40.00, following an earlier bottom within oversold space. Upstream, trendline resistances are seen around 45.00.

Observed levels:

108 could spark short-term buying, given the level’s connection with H4 demand at 107.81/108.01.

However, should the pair explore lower levels and test H4 support at 107.44, this barrier packs more of a bullish punch, having seen the base align with daily demand at 107.58/106.85.

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 subsequently 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, however, March snapped a five-month winning streak and formed what candlestick enthusiasts call an inside candle pattern (represents a short-term consolidation with low volatility). A breakout lower would generally be viewed as a bearish signal.

April, however, thanks to yesterday, is now trading higher by 1.5 percent.

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:

Leaving Quasimodo support at 1.3609 unchallenged, sterling ended Monday on the front foot against the US dollar and closed a few pips off session tops.

In terms of structure, trendline support-turned resistance, taken from the low 1.1409, is next on tap, with a breach unmasking 2021 peaks around 1.4241 and Quasimodo resistance at 1.4250.

As for trend, GBP/USD has been trending higher since early 2020.

RSI activity is now within touching distance of overbought waters (in particular resistance at 76.14) after cementing position above the 50.00 centreline.

H4 timeframe:

The latest to come out of the H4 chart is the break of resistance at 1.3852 in dominant fashion, movement that highlights Quasimodo resistance parked at 1.4007. Beyond here, technical structure shows limited resistance until around the 1.4200 neighbourhood.

H1 timeframe:

The key feature on the H1 scale this morning is the 1.40 figure. Thanks to Monday’s 1-percent advance, 1.39 and supply at 1.3938/1.3918 was brushed aside.

What’s technically appealing is that not only is 1.40 a widely watched psychological level, it benefits from additional technical confluence in the form of a H4 Quasimodo resistance at 1.4007 and daily trendline resistance.

With respect to the RSI oscillator, the indicator reveals upside momentum somewhat levelling off within overbought territory, after testing tops at 87.50.

Observed levels:

As underlined above, the central element this morning is the 1.40 figure, knowing the barrier brings with it additional technical confluence in the shape of a H4 Quasimodo resistance at 1.4007 and daily trendline resistance.

DISCLAIMER:

The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com and should be considered before deciding to deal in those products. Derivatives can be risky; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.

 

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