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Aaron Hill
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Currency

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 0.4 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:

Unchanged technical structure from previous analysis.

Quasimodo support at $1.1836 remains underwater on the daily scale, despite Europe’s shared currency receiving a modest boost following the latest FOMC minutes[1]. Continued interest south of $1.1836 throws light on another Quasimodo formation 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:

Demand from $1.1794-1.1822 appears overstretched, having US hours on Wednesday clip the lower edge of the zone and touch a session low of $1.1781. With buyers perhaps troubled and breakout sellers filled, Quasimodo support at $1.1749 could be the next level to welcome price action.

H1 timeframe:

US trading on Wednesday witnessed H1 establish a hammer pattern—typically viewed as a bullish cue. What’s interesting is the candle formed a whipsaw through $1.18 bids. This filled protective stop-loss orders from those attempting to long $1.18 and trapped breakout sellers (bear trap). Support at $1.1784 (a previous Quasimodo resistance) was in place to facilitate a $1.18 stop run and, as a result, permitted informed buyers to jump on board.

Maintaining position north of $1.18 brings forward demand-turned supply at $1.1838-1.1850 and the 100-period simple moving average at $1.1844 (a logical upside target for $1.1784 longs), with a break unmasking $1.19.

The view from the RSI shows bullish divergence, informing traders downside momentum is slowing.

Observed levels:

Should H1 buyers secure position above $1.18 and head for H1 demand-turned supply at $1.1838-1.1850, this could be a location sellers attempt to make a show from. The rationale comes from Quasimodo support at $1.1836 on the daily timeframe offering little right now and H4 demand at $1.1794-1.1822 echoing a feeble tone. On top of this, June has displayed a series of lower lows and lower highs.

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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 down 0.2 percent.

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:

Unchanged technical structure from previous analysis.

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 $0.7570, a dynamic value sheltered south of resistance from $0.7626.

In terms of trend, 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:

Between Quasimodo resistance at $0.7599 (a level welcoming sellers on Tuesday) and support at $0.7440 (parked under Friday’s low at $0.7445) are key levels to be mindful of on the H4 timeframe.

H1 timeframe:

Demand at $0.7479-0.7492—though not a premium formation—aided an AUD bid heading into the early hours of Europe on Wednesday, dethroning $0.75 and clocking highs just south of resistance at $0.7546. Things soured amid US hours, nonetheless, dropping through noted areas to test space ahead of Quasimodo support at $0.7460 before retesting the mettle of $0.75 as resistance in recent hours.

Momentum, according to the RSI, reveals mild bullish divergence forming. This essentially shows pressure to the downside easing, serving as a warning that buyers could enter the fray.

Observed levels:

The response from the lower side of $0.75 is likely to draw technical eyes on the H1. Evidence in favour of sellers taking the wheel here is room to push lower on H4, daily and monthly timeframes, with H1 players perhaps taking aim at Quasimodo support from $0.7460, followed by the upper side of supply-turned demand at $0.7453-0.7384 on the daily timeframe.

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 trades 0.5 percent in the red.

Daily timeframe:

Tuesday cutting through trendline support, taken from the low ¥102.59, and Wednesday embracing this position—albeit in the shape of a doji indecision candle—highlights supply-turned demand at ¥107.58-106.85 as a reasonable downside target.

Territory north underlines long-term resistance at ¥111.88-111.20, located south of supply at ¥112.68-112.20.

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

In terms of where we stand on the RSI, the value marginally dropped through the lower wall of an ascending channel between 58.82 and 47.51. Below here, the 50.00 centreline is in sight.

H4 timeframe:

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

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.

As evident from the H4 chart, Quasimodo support at ¥110.48 and associated Fib studies delivered a floor on Wednesday. Buyers, although appearing hesitant, could take aim as far north as resistance from ¥111.56.

H1 timeframe:

Support coming in from Fib studies on the H4 at around ¥110.50 appears to have reinvigorated interest at H1 demand from ¥110.47-110.55, despite its lower edge giving way early Wednesday.

Bulls taking the lead from current demand draws attention to ¥111 and the 100-period simple moving average around ¥110.97, while knocking under the aforesaid demand places support at ¥110.33 in the light.

Coming from the RSI, the indicator is engaging the 50.00 centreline. Important structure to be aware of are support at 18.76 and resistance from 78.38.

Observed levels:

As mentioned in previous analysis, 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, and H1 demand at ¥110.47-110.55. Near-term upside targets rest between the ¥111 level and the 100-period simple moving average around ¥110.97 on the H1.

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 0.2 percent.

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

Daily timeframe:

Unchanged technical structure from previous analysis.

Quasimodo support at $1.3609 is likely to remain 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 $1.3658. 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 recently forming. This is shown by way of RSI bullish divergence.

H4 timeframe:

Unchanged technical structure from previous analysis.

Quasimodo support from $1.3761 re-entered the fight on Wednesday and held a mild bullish tone. Ultimately, aside from Tuesday’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.

Venturing south of this level unlocks another Quasimodo support at $1.3712.

H1 timeframe:

Unchanged technical structure from previous analysis.

Similar to Tuesday, Wednesday settled around the lower side of $1.38 and nearby 100-period simple moving average at $1.3814, following earlier optimism a touch north of $1.3750.

Sellers establishing position at $1.38 potentially unlocks support from $1.3750, set beneath H4 Quasimodo support mentioned above at $1.3761. North of $1.3814, on the other hand, shifts interest to resistance at $1.3861 and $1.39.

The RSI recently formed bullish divergence off support at 30.00 (the oversold threshold), with the indicator now touching gloves with the 50.00 centreline. Above here, overbought resistance is found at 72.00.

Observed levels:

With H4 coming from Quasimodo support at $1.3761, this may discourage $1.38 sellers on the H1. A H1 close above the 100-period simple moving average around $1.3814, therefore, could witness bulls take control and head for H1 resistance at $1.3861.

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.

  1. https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20210616.pdf
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