November 25th 2021: Technical Outlook

Charts: Trading View

EUR/USD:

(Italics: previous analysis)

Weekly timeframe:

Down 0.8 percent on the week, support at $1.1237-1.1281—made up of a 61.8% Fibonacci retracement at $1.1281 and a 1.618% Fibonacci projection from $1.1237—has been overthrown.

This throws light on Quasimodo support as far south as $1.0778 and introduces a bearish environment. On top of this, technicians will acknowledge the pair took out 2^nd November low (2020) at $1.1603. This suggests the beginnings of a primary downtrend on the weekly timeframe, reinforced on the back of the monthly timeframe trending lower since mid-2008.

Daily timeframe:

Quasimodo support at $1.1213 (positioned beneath the weekly timeframe’s Fibonacci structure) has come under fire. Establishing a decisive close beneath the latter not only helps validate the bearish environment brewing on the weekly timeframe, but also exposes limited support on the daily timeframe until $1.0991 (not visible on the screen).

In terms of the relative strength index (RSI), the indicator’s value is exploring oversold territory and threatening a move to support from 21.87. While the oversold region can prompt a bullish phase, downward trending situations can have the indicator remain within the area for prolonged periods.

H4 timeframe:

In conjunction with the bigger picture portraying a downside bias, resistance emerged from $1.1215 on the H4. Note this level, as well as $1.1243, are previous Quasimodo support barriers.

19^th June (2020) low coming in from $1.1168 pulls in potential support, should sellers maintain their current setting beneath $1.1215.

H1 timeframe:

The view out of the H1 chart has buyers and sellers squaring off around the lower side of $1.12, following a break lower in early US hours on Wednesday.

$1.1265-1.1273 supply demands attention upstream, sheltered beneath supply at $1.1307-1.1283.

The $1.1113-1.1140 decision point is seen to the downside. Though do be aware sentiment clearly favours sellers right now and may discourage buying from the decision point.

From the relative strength index (RSI), the indicator dipped a toe back in oversold terrain in recent movement, shedding light on indicator support from 18.00.

Observed Technical Levels:

All four timeframes echo a bearish setting.

Holding sub $1.12 (H1), therefore, could be in the offing, targeting $1.1168 (H4), followed by the H1 decision point at $1.1113-1.1140.

AUD/USD:

(Italics: previous analysis)

Weekly timeframe:

Following a one-sided decline from $0.7501, prime support at $0.6968-0.7242 has entered the fray.

November is down 4.4 percent.

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

Daily timeframe:

Trendline resistance-turned support, etched from the high $0.7891, is on the point of breaking, movement placing Fibonacci support between $0.7057 and $0.7126 in the line of fire.

The trend on this timeframe remains in line with weekly movement: favours upside following the break of 3^rd September high at $0.7478. However, the deeper sellers push this market, the more unlikely a recovery phase is.

H4 timeframe:

$0.7213 support collapsed Wednesday, unlocking 29^th September low from $0.7170 and perhaps Quasimodo support at $0.7144.

Trend direction is clearly tilted lower on this scale, aligning with higher timeframe structure.

H1 timeframe:

Latest movement out of the H1 chart shows price engulfed $0.72.

South of here has 29^th September low from $0.7170 in sight.

From the relative strength index (RSI), we can see the value beginning to gather some traction above oversold.

Observed Technical Levels:

Similar to EUR/USD, AUD/USD puts forward a bearish setting beneath $0.72 on the H1, targeting 29^th September low at $0.7170 as an initial objective.

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