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Charts: Trading View

EUR/USD:

Monthly timeframe:

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

Closing the book on the month of June witnessed EUR/USD—in the shape of a near-full-bodied bearish candle—touch gloves with familiar support at $1.1857-1.1352 and erase 3.0 percent. A bullish revival from the aforesaid support shines the technical spotlight on 2021 peaks at $1.2349; additional enthusiasm may welcome ascending resistance (prior support [$1.1641]).

July currently trades 0.3 percent lower.

Based on trend studies, the primary uptrend has been underway since price broke the $1.1714 high (Aug 2015) in July 2017. Furthermore, price breached major trendline resistance, taken from the high $1.6038, in July 2020.

Daily timeframe:

Following Monday’s restricted progress, Quasimodo support at $1.1836 is on the ropes amidst a broad USD bid, as the markets await clues from the US Federal Reserve today.

In terms of data events on Tuesday, The Institute for Supply Management Services PMI dropped to 60.1 in June, following 64.0 in May (consensus: 63.4). Out of Europe, Germany’s ZEW economic institute also aired a lower-than-anticipated figure of 63.3 versus 75.0 consensus.

If $1.1836 stands down, another Quasimodo formation calls for attention at $1.1688.

As for trend on the daily scale, the currency pair has exhibited an early consolidation phase since 2021, following healthy gains in 2020.

According to the RSI indicator, bullish divergence is still on the table out of oversold space, action implying that despite price registering fresh lows, downside momentum has slowed and warns traders that buyers are perhaps on the doorstep.

H4 timeframe:

Resistance from $1.1883-1.1874 proved a stubborn ceiling in recent days, applying pressure on $1.1794-1.1822 demand, an area drawn from early April. Though this demand shares space nearby daily Quasimodo support at $1.1836, rupturing the area unlocks the technical door to as far south as Quasimodo support coming in at $1.1749.

H1 timeframe:

Heading into the early hours of Europe Tuesday, price embraced the lower side of demand-turned supply at $1.1895-1.1911 and rolled over. EUR/USD subsequently launched a one-sided decline, movement overthrowing the 100-period simple moving average at $1.1853 and demand from $1.1838-$1.1850. Price action traders will note the aforesaid zone later served as supply before the unit crossed swords with Friday’s low at $1.1807.

$1.18 echoes possible support lower on the curve, though before $1.18, a pullback to retest $1.1838-$1.1850 is possibly on the cards.

The RSI exited oversold in recent hours, informing traders that buyers could take the wheel and tug the RSI to the 50.00 centreline.

Observed levels:

Charts reveal daily Quasimodo support at $1.1836 is on the verge of giving way. This—coupled with H4 buyers unable to deliver much from demand at $1.1794-1.1822 past resistance at $1.1883-1.1874— hints at a possible bearish scenario from H1 demand-turned supply at $1.1838-1.1850, targeting $1.18 and possibly lower.

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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)

Since the beginning of 2021, buyers and sellers have been squaring off south of trendline resistance (prior support – $0.4776 low) and supply from $0.8303-0.8082. Thanks to June’s 3.0 percent decline, however, support is featured at $0.7394. Additional downside pressure brings light to demand at $0.7029-0.6664 (prior supply).

July is currently unchanged.

Trend studies (despite the trendline resistance [$1.0582] breach in July 2020) show the primary downtrend (since mid-2011) remains in play until breaking $0.8135 (January high 2018).

Daily timeframe:

Buyers and sellers are in the process of battling for position between supply-turned demand at $0.7453-0.7384 (houses a number of Fibonacci levels) and the 200-day simple moving average at $0.7568, a dynamic value sheltered south of resistance from $0.7626.

Despite a hawkish RBA earlier in the session, which aided an AUD/USD bid, candlestick traders will note Tuesday finished in the shape of a shooting star off the aforesaid 200-day SMA—a bearish candlestick signal.

In terms of trend, as noted in previous research, 2020 was a respectable year for AUD/USD, though 2021 is on the back foot.

From the RSI, the value continues to ease out of oversold, establishing bullish divergence. This reveals downside momentum is slowing and may fuel a bullish phase.

H4 timeframe:

Supply at $0.7570-0.7554 was annihilated Tuesday, unlocking a test of Quasimodo resistance at $0.7599 which witnessed price action aggressively rotate south. Of note, another layer of Quasimodo resistance is arranged at $0.7621.

Support at $0.7440 is observed lower down, parked under Friday’s low at $0.7445.

H1 timeframe:

Half-hearted demand at $0.7479-0.7492 made its way in the frame during hours of US trading on Tuesday, providing a technical floor for price to retest the lower side of $0.75. Traders will also be watching neighbouring resistance at $0.7508 and the 100-period simple moving average currently at $0.7508. Additional technical structure to be mindful of is Quasimodo support coming in from $0.7460 and resistance at $0.7546.

As for the RSI, we recently dipped a toe in oversold waters and bumped into support from 27.02.

Observed levels:

Room is visible on the monthly scale to approach support at $0.7394. This, together with the daily timeframe exhibiting scope to drop in on supply-turned demand at $0.7453-0.7384, and the H4 showing a clear run to support from $0.7440 (housed within the aforesaid daily zone), informs traders that between $0.7508 resistance and $0.75 on the H1 may serve as a ceiling and entertain sellers, targeting at least H1 Quasimodo support from $0.7460.

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 cut through descending resistance, etched from the high ¥118.66.

Although April finished lower by 1.3 percent and snapped the three-month winning streak, May (+0.2 percent) held the breached descending resistance and echoed support in June, higher by 1.4 percent.

July currently trades 0.4 percent in the red.

Daily timeframe:

Following last week shaking hands with long-term resistance at ¥111.88-111.20 (supply at ¥112.68-112.20 is directly above), Tuesday ventured south of nearby trendline support, taken from the low ¥102.59. A decisive close south of the latter could be the birth of a decisive sell-off, taking aim at supply-turned demand at ¥107.58-106.85.

Trend studies reveal the pair has been trending higher since the beginning of the year.

The RSI remains limited within the walls of an ascending channel between 58.82 and 47.51. Notably, however, the value is testing the lower limit of the channel.

H4 timeframe:

Unchanged from previous analysis.

Resistance from ¥111.56 made a show at the tail end of last week, delivering a bearish bias on Friday. Territory north of current resistance shines light on Quasimodo resistance at ¥112.17.

Continued interest to the downside positions Quasimodo support at ¥110.48 in the crosshairs, sharing chart space with Fib retracement levels (Fib cluster) and trendline support, extended from the low ¥108.56.

H1 timeframe:

¥111 was left unopposed in recent trading, with Tuesday grinding lower and crossing swords with demand at ¥110.47-110.55. This was a highlighted zone in yesterday’s analysis, largely due to the area representing a decision point to break above both the 100-period simple moving average and the ¥111 level.

As you can see, the aforesaid demand is holding ground. However, despite buyers appearing somewhat unconvinced, upside (thanks to what seems to be consumed supply) is relatively clear until ¥111. Should ¥110.47-110.55 move aside, Quasimodo support can be seen from ¥110.33.

As for the RSI, little change is observed. We remain trekking around oversold territory, unable to split 44.00 resistance.

Observed levels:

Longer term, a decisive trendline support breach on the daily timeframe, drawn from the low ¥102.59, is likely to place any buying under pressure.

Until that point, though, short-term action is focused on support around the ¥110.50ish region on the H4, which could mean a dip into current H1 demand at ¥110.47-110.55 before buyers attempt to stage a recovery.

GBP/USD:

Monthly timeframe:

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

Since February, GBP/USD has echoed a rangebound environment just south of $1.4377: April high 2018. This follows December’s (2020) trendline resistance breach, taken from the high $2.1161, which could serve as support if retested.

July is currently down 0.3 percent.

Primary trend structure has faced lower since early 2008, unbroken (as of current price) until $1.4377 gives way.

Daily timeframe:

Unchanged from previous analysis.

Quasimodo support at $1.3609 is likely on a number of watchlists, having seen the base dovetail closely with a 38.2% Fib retracement at $1.3641 and the 200-period simple moving average, circling $1.3653.

To the upside, emphasis is on resistance at $1.4003.

Momentum, measured by the RSI, has slowed to the downside of late, despite fresh (price) lows forming. This is shown by way of RSI bullish divergence.

H4 timeframe:

Tuesday’s risk-averse conditions aided a USD bid and weighed on GBP/USD. Quasimodo support from $1.3761, therefore, is back in the frame. Venturing south of this level shines the technical spotlight on another Quasimodo support at $1.3712.

Ultimately, aside from yesterday’s top at $1.3899 and a handful of highs around $1.3939, scope to climb to supply at $1.3986-1.3958 is seen. Note that a resistance zone is also present directly above at $1.4027-1.3998.

H1 timeframe:

Tuesday settled around the lower side of $1.38, following a sharp drop from resistance at $1.3861. The 100-period simple moving average is seen around $1.3815.

Sellers establishing position at $1.38 potentially unlocks support from $1.3750, set beneath H4 Quasimodo support mentioned above at $1.3761.

Regarding the RSI, the 30.00 threshold (the oversold trigger) delivered support again on Tuesday after the indicator dropped from (overbought) resistance at 72.00.

Observed levels:

Short term, H1 sellers could leave their mark at $1.38 today, aided by the 100-period simple moving average around $1.3815, targeting H4 Quasimodo support at $1.3761 and then H1 support from $1.3750

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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