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Charts: 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 a three-month retracement, support at 1.1857-1.1352 made an entrance and inspired a bullish revival in April, up 2.4 percent at the close. Month-to-date action for May also currently trades higher by 0.5 percent.

April upside—alongside May’s gains—throws light on the possibility of fresh 2021 peaks in the months ahead, followed by a test of ascending resistance (prior support [1.1641]).

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

Daily timeframe:

Technical structure largely unchanged from previous analysis.

The dollar index (ticker: DXY) left behind a muted vibe on Thursday, with EUR/USD emulating the action.

On the data front, US jobless claims fell more than expected at 473,000 versus a forecast of 487,000. In addition, the Producer Price Index rose 0.6 percent in April, beating forecasts of 0.3 percent. This follows Wednesday’s upbeat inflation release.

EUR/USD extended losses south of Quasimodo resistance at 1.2169 on Wednesday, nudging the 1.1985 May 5th low in view, arranged just north of the 200-day simple moving average at 1.1950.

As mentioned in previous technical briefings, the trend, despite the 2021 retracement, remains to the upside (trending higher since early 2020).

Momentum, as measured by the RSI indicator, failed to clock overbought tops at the beginning of the week and is poised to potentially revisit support at 51.36.

H4 timeframe:

Technical structure largely unchanged from previous analysis.

Demand at 1.2044-1.2071 welcomed (and contained) price movement in recent action. According to the H4 timeframe, this area represents a decision point to break through not only 1.2108 resistance, but also the 1.2150 top (April 29).

South of current demand exposes support at 1.1990.

H1 timeframe:

As highlighted in Thursday’s analysis, 1.2059-1.2073 Fib support made a show following Wednesday’s aggressive downside pressure. Interestingly, this area provided enough fuel for buyers to make an entrance on Thursday and retest the lower side of 1.21. Consequent to this, a short-term consolidation is forming between the said areas.

Territory beneath the Fib zone shines the technical headlights on support drawn from 1.2035. Upstream—north of 1.21—the 100-period simple moving average calls for attention around 1.2128, followed closely by resistance parked at 1.2135.

Note, the Fib zone also benefits from connecting with H4 demand underscored above at 1.2044-1.2071, while the 1.21 figure is seen stationed just under H4 resistance at 1.2108.

Resistance at 47.50 on the RSI indicator is proving a tough nut to crack right now. Breaking the level, nonetheless, shows a relatively clear river north to overbought space.

Observed levels:

Short term, the H1 Fib support between 1.2059 and 1.2073, and the 1.21 figure, provide a range for traders to work with.

What’s interesting about this consolidation is its bolstered by H4 structure: H4 demand at 1.2044-1.2071 and H4 resistance at 1.2108.

With the overall trend facing higher, and monthly price exiting demand at 1.1857-1.1352 in April, a break higher could eventually take form. Therefore, a bullish breakout scenario may emerge above 1.21 on the H1, assuming a decisive close above the base—initially targeting H1 resistance at 1.2135.

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 battling for position south of trendline resistance (prior support – 0.4776 high) and supply from 0.8303-0.8082.

Should a bearish scenario unfold, on the other hand, demand at 0.7029-0.6664 (prior supply) is featured to the downside.

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:

Technical structure largely unchanged from previous analysis.

The Australian dollar ended Thursday marginally off worst levels against the US dollar, for what was an uninspiring session all in all.

To the upside, resistance can be found at 0.7816, while lower on the curve, support at 0.7563 is on the radar.

With respect to trend, despite a two-month retracement and yesterday’s down move, we have been decisively higher since the early months of 2020.

Downside momentum, as you can see from the RSI indicator, pulled the value through the 50.00 centreline—indicating additional losses may be on the cards.

H4 timeframe:

Support at 0.7696-0.7715 made a show on Thursday, greeting price action following a trendline support breach (drawn from the low 0.7531). As you can see, for now, upside attempts from the noted support zone have been contained by the underside of the trendline support in the form of resistance.

Space below current support directs attention to demand at 0.7632-0.7653—a decision point to break local peaks at 0.7661 and 0.7676. Should we manoeuvre back above trendline resistance, on the other hand, resistance (daily) can be seen at 0.7816.

H1 timeframe:

Heading into the early hours of US trading on Thursday, AUD/USD went on the offensive from 0.77 (held price higher since April 21st) and now shines the technical spotlight on resistance at 0.7755 (dovetailing with trendline resistance, drawn from the high 0.7890).

0.7671-0.7687 demand is visible beneath 0.77.

As for the RSI indicator, following RSI support at 19.40 entering the frame on Wednesday (capping downside since mid-April 2020), the value is now seen navigating territory just south of the 50.00 centreline.

Observed levels:

Technically speaking, H4 action offers a limited perspective until either trendline support-turned resistance or the support at 0.7696-0.7715 gives way. Areas outside of the aforementioned barriers to be mindful of are demand at 0.7632-0.7653 and daily resistance at 0.7816.

On the H1, resistance at 0.7755 may catch the attention of short-term players today, having seen the base coincide with trendline resistance (red zone).

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.

Although April finished lower by 1.3 percent and snapped the three-month winning streak, May is attempting to hold the breached descending resistance, echoing potential support.

Daily timeframe:

Technical structure largely unchanged from previous analysis.

Following last Friday shaking hands with trendline support, extended from the low 102.59, Wednesday had USD/JPY enter supply at 109.97-109.18 which prompted mild selling on Thursday. North of 109.97-109.18 casts light on longer-term resistance at 110.94-110.29, stationed under supply at 111.73-111.19.

Trend studies reveal the pair has been trending higher since the beginning of 2021. In line with this, the RSI is attempting to secure position above resistance at 57.00, shifting attention to overbought space and RSI resistance at 83.02.

H4 timeframe:

The combination of a 61.8% Fib level at 109.60 and supply at 109.97-109.72 sparked mild selling on Thursday. This follow’s Wednesday’s energetic push higher, movement forming demand at 108.64-108.91—the next downside target should sellers remain in the driving seat.

North of current supply, the technical radar is fixed on supply at 110.85-110.46 (fixed within daily resistance at 110.94-110.29 and joined by a 100% Fib projection at 110.64 and a 1.272% Fib expansion at 110.37).

H1 timeframe:

Despite an early test of supply-turned demand at 109.52-109.39, upside interest was limited, failing to find acceptance beyond 109.78.

As you can see, price ended Thursday within the walls of 109.52-109.39, threatening a potential break lower for nearby trendline support, extended from the low 108.35, and a 38.2% Fib level at 109.23 (along with a 50.00% retracement).

RSI resistance stepped forward at 79.60 yesterday and fuelled an overbought exit that subsequently watched the value nosedive through the 50.00 centreline. This implies additional downside momentum could be seen.

Observed levels:

We have monthly price attempting to forge support off a recently breached descending resistance line, which underscores a potential bullish scenario. From the H1 timeframe, short-term flow shows trendline support around the 109.23ish range, aligning with Fib studies. This, if tested, prompts a bullish scene.

Both the daily and H4 timeframes, however, demonstrate supply (109.97-109.18 and 109.97-109.72 [located within the upper range of daily supply]) and could hamper buying.

 

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 and April witnessed decreased volatility.

May, nonetheless, trades firmly on the front foot, up by 1.7 percent MTD.

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

Daily timeframe:

It was a somewhat muted session Thursday, following Wednesday’s decisive 0.6 percent decline. Support at 1.4003, nevertheless, came within touching distance of entering the fray. Note this level served relatively well as resistance since March. 1.3857-1.3940 demand is plotted just beneath the said support.

Out of the RSI, traders will note the value rotated lower just south of overbought, movement which may see trendline support, taken from the low at 36.14, make an entrance.

H4 timeframe:

Support at 1.4007—a previous Quasimodo resistance level—welcomed price action on Thursday.

Bullish energy from 1.4007, though, has been relatively light thus far. This signals the unit may navigate deeper water and shake hands with trendline support, extended from the low 1.3668.

In the event buyers change gears, 1.4162 resistance demands attention.

H1 timeframe:

Limited action was observed Thursday, with price scoring a narrow range ahead of the widely watched 1.40 figure, which happens to align with a 50.00% retracement level at 1.4003. Lower on the curve, support is found at 1.3929, and to the upside we can see the 1.41 figure (and nearby 100-period simple moving average).

From the RSI, the value penetrated trendline resistance, drawn from the peak 83.68. This signals we may see the 50.00 centreline give way.

Observed levels:

Analysis unchanged due to Thursday’s lacklustre performance.

The combination of daily support at 1.4003, H4 support at 1.4007 and the 1.40 figure on the H1, may be enough to lure bullish moves.

Traders are, however, urged to pencil in the possibility of a whipsaw forming around 1.40, as this level will attract a number of orders.

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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