November 24th 2021: Technical Outlook Ahead of FOMC

Charts: Trading View

EUR/USD:

(Italics: previous analysis)

Weekly timeframe:

Support, composed of a 61.8% Fibonacci retracement at $1.1281 and a 1.618% Fibonacci projection from $1.1237, remains centre focus on the weekly chart. Harmonic traders will acknowledge the 1.618% component represents an ‘alternate AB=CD bullish pattern’.

Upriver, resistance is stationed at $1.1473-1.1583.

Despite current support, trend studies reveal the pair took out 2^nd November low (2020) at $1.1603. This suggests the beginnings of a primary downtrend on the weekly timeframe and questions the value of current support ($1.1237-1.1281). What’s interesting is the monthly timeframe has been trending lower since mid-2008.

Daily timeframe:

Quasimodo support at $1.1213 (positioned beneath the weekly timeframe’s Fibonacci structure) is central on the daily chart. Defending the latter backs weekly support, yet rupturing the daily level reinforces a bearish environment, targeting support around the $1.0991ish neighbourhood.

While immediate flow has been trending lower since late May tops at $1.2266, momentum, according to the relative strength index (RSI), is engaging oversold space and launched the beginnings of potential bullish divergence. Ultimately, technicians will want to see continued upside within the indicator, preferably testing the 50.00 centreline.

H4 timeframe:

Between $1.1215 and $1.1243, two Quasimodo support levels constructed a floor on Tuesday. A bullish showing from the aforementioned area directs attention towards the $1.1387-1.1366 decision point—an area serving sellers well in the second half of last week.

Note the H4 Quasimodo at $1.1215 essentially represents the same level as the daily timeframe’s Quasimodo formation at $1.1213.

H1 timeframe:

According to the technical landscape offered on the H1 chart, thin support is evident until $1.12. Upstream, resistance is delivered in the shape of a supply from $1.1307-1.1283 and the $1.13 figure.

Territory above $1.13 shines the technical spotlight on a decision point at $1.1361-1.1351.

Out of the relative strength index (RSI), the value shows a bullish RSI failure swing developed on a break of 48.48. Independent of price action, this shows momentum gaining traction to the upside. A decisive push north of the 50.00 centreline will emphasise this.

Observed Technical Levels:

Weekly support at $1.1237-1.1281 remains key, in addition to neighbouring daily Quasimodo support at $1.1213 and H4 support between $1.1215 and $1.1243. Before a bullish scenario unfolds (if at all), however, a dip to $1.12 (H1) could form.

Alternatively, breaking beneath said supports emphasises the weekly timeframe’s early primary downtrend, and could pull in further selling.

AUD/USD:

(Italics: previous analysis)

Weekly timeframe:

Three back-to-back bearish candles taking shape from $0.7501 resistance landed price at the door of prime support from $0.6968-0.7242 last week—November is down 4.0 percent.

The longer-term trend has been higher since pandemic lows of $0.5506 (March 2020). Though do note on the monthly timeframe we have been entrenched within a downtrend since mid-2011.

As a consequence of the weekly timeframe’s pullback, however, dip-buying could be on the cards from $0.6968-0.7242.

Daily timeframe:

Embracing the idea of moves from weekly prime support is the daily timeframe’s Quasimodo support at $0.7220 and intersecting trendline resistance-turned support, etched from the high $0.7891.

As evident from the daily chart, resistance between $0.7621 and $0.7551 is visible to the upside, sharing space with the 200-day simple moving average around $0.7532. Territory below $0.7220, on the other hand, points to nearby Fibonacci support between $0.7057 and $0.7126.

The trend on this timeframe remains in line with weekly movement: favours upside following the break of 3^rd September high at $0.7478.

H4 timeframe:

Support at $0.7213 is currently active on the H4 chart. If a break comes to pass, technical eyes may be drawn to 29^th September low from $0.7170 and perhaps Quasimodo support at $0.7144.

Also notable is resistance priced in at $0.7287.

H1 timeframe:

Quasimodo support calls for attention at $0.7208, arranged above the $0.72 figure. Higher on the curve, however, prime resistance is at $0.7278-0.7262, followed by the $0.73 figure and a well-placed prime resistance at $0.7324-0.7309.

The relative strength index (RSI) shows the value is on the doorstep of the 50.00 centreline. Breaking the latter echoes a bullish tone: average gains exceeding average losses: positive momentum.

Observed Technical Levels:

Between $0.72 and $0.7220 is an area (green: applied to the H1) likely to remain on the watchlist for many buyers: the $0.72 figure on the H1 and the daily timeframe’s Quasimodo support from $0.7220.

USD/JPY:

(Italics: previous analysis)

Weekly timeframe:

Recently clocking a fresh 4-year pinnacle at ¥115.15, the unit is now trading above resistance from ¥114.38 and the upper edge of a bullish flag between ¥114.70 and ¥113.41. Traders, therefore, are urged to pencil in the 1.272% Fibonacci projection from ¥116.09.

In terms of trend, the unit has been advancing since the beginning of this year.

Daily timeframe:

The 78.6% Fibonacci retracement at ¥114.94 (drawn from 15^th December 2016 high at ¥118.66) is under attack, opening the door to a possible run to Quasimodo resistance at ¥116.33.

Lower, technicians will note attention remains on supply-turned demand at ¥112.66-112.07.

RSI (relative strength index) analysis reveals clear support between 40.00 and 50.00 (amid prolonged uptrends, indicator support often forms around the 50.00 area and operates as a ‘temporary’ oversold base). The rally from the aforesaid support has landed the value within touching distance of overbought.

H4 timeframe:

Following last week’s recovery from prime supports between ¥113.28 and ¥113.66, and subsequent breach of two Quasimodo resistances at ¥114.46 and ¥114.76, the latter established support on Tuesday.

To the upside, resistance falls in around ¥115.38.

H1 timeframe:

A closer assessment of price action on the H1 chart reveals the currency pair is on the verge of securing position north of ¥115. Movement above here sets the stage for a run to H4 resistance highlighted above at ¥115.38.

Prior to reaching ¥115, the unit brought in a Quasimodo resistance-turned support at ¥114.49 (an area to watch should sellers hold the round number).

As for the relative strength index (RSI), we recently pencilled in bearish divergence within overbought territory and subsequently bounced from the 50.00 centreline to hold at 60.00ish into the close.

Observed Technical Levels:

Having noted weekly price commanding attention above resistance from ¥114.38, together with the daily timeframe’s 78.6% Fibonacci retracement at ¥114.94 appearing fragile, further buying could be seen on the H4 chart to resistance at ¥115.38. This implies a H1 breach of ¥115 and offers short-term players a potential breakout play higher.

GBP/USD:

(Italics: previous analysis)

Weekly timeframe:

Supply-turned demand at $1.3629-1.3456 recently surrendered position. Month to date, November is down 2.2 percent.

Couple this with price closing under a double-top pattern’s ($1.4241) neckline at $1.3669 in August, and the monthly timeframe trading lower since late December 2007, the weekly chart reflects a bearish technical outlook.

The double-top pattern’s profit objective—measured by taking the distance between the highest peak to the neckline and extending this value lower from the breakout point—delivers a downside target around $1.3093.

Daily timeframe:

Fibonacci support between $1.3262 and $1.3337 is firmly in the headlights on this timeframe.

Resistance remains at $1.3602, plotted nearby trendline resistance, taken from the high $1.4250—both forming upside objectives should buyers regain consciousness.

Longer-term sentiment has remained biased to the downside since June. This has caused the relative strength index (RSI) to form indicator resistance between 60.00 and 50.00 (common in downtrends).

H4 timeframe:

Plotted just ahead of daily Fibonacci support at $1.3262-1.3337, 12^th November low at $1.3353 made an entrance yesterday and is, for the time being, delivering a modest floor.

The $1.3450-1.3427 decision point demands attention higher on the curve, should buyers take the wheel.

H1 timeframe:

The combination of Quasimodo resistance at $1.3405 and the $1.34 big figure offers a possible ceiling for short-term players. A bearish response is emphasised on the back of scope to approach lower levels until shaking hands with the $1.33 number.

While further downside is favoured, traders are urged to note resistance at $1.3449 in the event $1.34 is taken.

In terms of where we stand on the relative strength index (RSI), the indicator is fast approaching the lower side of the 50.00 centreline. Holding this barrier helps validate potential resistance around $1.34. Breaking the centreline, however, sheds light on a possible run to $1.3449.

Observed Technical Levels: 

                           

Having higher timeframe flow pointing to the downside, short-term sellers will be watching either H1 resistance around $1.34ish or the H4 timeframe’s decision point coming in from $1.3450-1.3427.

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.