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Dollar and euro bank notes on the table

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US Dollar Index (Daily Timeframe):

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According to the US dollar index, the greenback extended the recent retracement slide by 0.7 percent last week and concluded a touch off session lows.

Technical movement observed an early-week retest at the lower side of the 200-day simple moving average, currently circling 92.21. This followed the prior week’s downside breach of the said SMA, movement typically interpreted as a bearish cue. Chart studies also shine light on nearby Quasimodo support coming in from 91.36, with subsequent selling unmasking additional layers of support at 91.00 and 90.00.

For those who read the previous week’s technical market insight, you may recall the report underlined that trend studies have displayed a downside bias since topping in March 2020, shaped by way of clear lower lows and lower highs (black arrows). Interestingly, the 93.43 31st March peak echoes the early stages of a bearish wave within the current downtrend (dashed black arrow).

RSI movement travelled south of the 50.00 centreline last week, implying momentum remains to the downside for the time being. This unearthed support at 41.24, though a break of the level indicates oversold space could be challenged.

  • While an obvious downtrend is evident, the combination of support at 91.00 and Quasimodo support at 91.36 may underpin a short-term bullish scenario this week. A 91.00 breach, on the other hand, hints at bearish conviction, targeting 90.00 support.

EUR/USD:

Monthly timeframe:

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

Following the three-month retracement slide, demand at 1.1857-1.1352 sparked a resurgence of bullish activity in April, up 2.2 percent MTD. The possibility of fresh 2021 peaks is on the table, followed by a test of ascending resistance (prior support – 1.1641).

Spinning lower, on the other hand, shines the technical spotlight on trendline resistance-turned support, taken from the high 1.6038.

Based on trend studies, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

Largely unchanged reading from previous analysis.

A closer reading of price action on the daily scale reveals EUR/USD voyaged north of the 200-day simple moving average at 1.1900 the week ending April 9th. While interpreted as a bullish signal, buyers and sellers squared off around resistance at 1.1966 at the tail end of last week.

Additional bullish sentiment this week directs the technical radar to another layer of resistance at 1.2058, with further outperformance throwing light on Quasimodo resistance at 1.2278.

Despite the 2021 retracement slide, trend studies show the pair has been trending higher since early 2020.

RSI analysis has the value hovering within touching distance of resistance at 60.30. This follows a trendline resistance breach (taken from the peak 75.97) as well as the formation of a bullish failure swing.

H4 timeframe:

Resistance at 1.1990, sited above daily resistance at 1.1966, capped upside attempts heading into the closing stages of last week. The lack of energy from sellers hints at the possibility of a 1.1990 breach this week, with any bullish bets likely targeting supply at 1.2101-1.2059, which happens to rest on top of daily resistance at 1.2058.

H1 timeframe:

As can be seen from the H1 chart, 1.1956-1.1945 demand proved an effective floor last week, withstanding numerous downside attempts (representing a decision point to break through remaining offers within supply at 1.1956-1.1935).

Trendline support, extended from the low 1.1738, and the 100-period simple moving average at 1.1954, represent additional areas of importance. To the upside, nonetheless, technical analysts will note the 1.20 figure, a widely watched psychological level which may serve as resistance this week. Note that 1.20 resides ten pips above H4 resistance at 1.1990.

Above 1.20 on the H1, resistance is parked at 1.2026 (previous Quasimodo support).

The view from within the RSI oscillator has seen the value weave around the 50.00 centreline since early Thursday. Support to be mindful of rests at 35.45, with resistance tucked inside overbought space at 78.97.

Observed levels:

Long term:

The technical landscape on the bigger picture has buyers at the wheel for now, with monthly price attempting to claw its way out of demand at 1.1857-1.1352. This helps explain the lack of selling around daily resistance at 1.1966.

The above hints at bullish attempts this week, at least until price shakes hands with daily resistance at 1.2058.

Short term:

The bullish vibe stemming from higher timeframes places H4 resistance at 1.1990 in question, along side the 1.20 figure on the H1.

This underscores two possible scenarios:

  • A H1 breakout above 1.20, movement that could interest breakout buyers to H1 resistance at 1.2026, and then daily resistance at 1.2058 as well as H4 supply at 1.2101-1.2059.
  • A test of H1 demand at 1.1956-1.1945 could come about, with buyers likely targeting 1.20, followed by the aforementioned resistances.

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, AUD/USD has been consolidating just south of trendline resistance (prior support – 0.4776 high) and supply from 0.8303-0.8082.

Demand at 0.7029-0.6664 (prior supply) is featured to the downside, should we see a bearish showing over the coming months.

With respect to trend (despite the trendline resistance [1.0582] breach in July 2020), the primary downtrend (since mid-2011) remains in play until breaking 0.8135 (January high [2018]).

Daily timeframe:

The Australian dollar modestly snapped a three-day winning streak on Friday, within striking distance of resistance at 0.7817. North of the latter, supply at 0.8045-0.7985 is on the radar.

Lower on the curve, the 0.7563 February low has delivered support since March 25th.

Momentum remains above the 50.00 centreline, according to the RSI oscillator. Increased upside momentum this week is likely to elbow things to channel resistance, drawn from the high 80.12.

H4 timeframe:

Largely unchanged reading from previous analysis.

H4 shows price retested 0.7696-0.7715 as demand Thursday and held.

Quasimodo resistance at 0.7800 deserves notice as the next potential ceiling this week, closely stationed by demand-turned supply from 0.7848-0.7867.

H1 timeframe:

Demand at 0.7715-0.7737 served buyers in early trade on Friday, guiding the currency pair to tops around 0.7760, before collapsing back into the jaws of demand. Interestingly, this demand is glued to the upper side of H4 demand at 0.7696-0.7715.

Beneath 0.7715-0.7737, 0.77 is visible, fixed north of demand at 0.7679-0.7695. This is an important area as it was within this base a decision was made to break above 0.77. Should buyers command position off 0.7715-0.7737 this week, the 0.78 level is likely watched as probable resistance (also represents Quasimodo resistance on the H4).

RSI action dipped a toe in waters beneath 50.00 on Friday, threatening possible moves into oversold space, in particular support at 19.40.

Observed levels:

Long term:

The daily timeframe displays scope to approach resistance at 0.7817 this week. Overthrowing this level underscores a possible bullish phase to supply at 0.8045-0.7985.

Short term:

Lower on the curve, H4 is attempting to secure position above demand at 0.7696-0.7715, aided by H1 demand plotted at 0.7715-0.7737. Therefore, a run higher from the aforesaid demand areas this week is on the table, targeting 0.78 on the H1, closely followed by daily resistance at 0.7817.

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.

April, currently down 1.7 percent, is retesting the breached descending resistance, movement that may eventually ignite bullish flow. With respect to long-term upside targets, supply at 126.10-122.66 calls for attention.

Daily timeframe:

Largely unchanged from previous analysis.

Bids and offers were pretty much even on Friday, establishing what’s known as a doji indecision candle.

Despite supply at 110.94-110.29 limiting upside since the beginning of April, the monthly timeframe testing descending resistance-turned support questions further selling. Consequently, the collection of lows around 108.36ish (green oval) could limit downside moves.

Structure beyond said lows point to demand at 107.58-106.85, in conjunction with trendline support, etched from the low 102.59.

In terms of trend on the daily scale, we have been decisively higher since early 2021.

RSI action journeyed beneath support at 57.00, and recently dipped a toe under the 50.00 centreline. This implies momentum remains to the downside for the time being.

H4 timeframe:

The Fib cluster drawn between 108.44 and 108.66 (blue), a zone attached to the upper side of demand at 108.31-108.50, stimulated bullish interest on Friday. Sailing through resistance at 108.99 this week may stir additional buying, with the move perhaps underpinning an approach to supply at 109.97-109.72 (houses a 50.0% retracement within at 109.77).

H1 timeframe:

Demand at 108.60-108.71, an area sharing a connection with the H4 Fib cluster at 108.44-108.66, supported price action into the second half of the week.

109 calls for attention to the upside, while any bearish flow could lead to support at 108.39.

Momentum dipped in line with price action on Friday, with the RSI oscillator now facing trendline support, taken from the low 20.94. It’s also worth pointing out the RSI crossed beneath the 50.00 centreline, indicating the possibility of increased strength to the downside.

Observed levels:

Long term:

Monthly action testing descending resistance-turned possible support, alongside daily price testing an area of support around the 108.36 lows, emphasises a potential bullish atmosphere this week.

Short term:

H4 crossing swords with a Fib cluster at 108.44-108.66, fastened to the upper side of H4 demand at 108.31-108.50, reinforces the higher timeframe bullish vibe.

While the above H4 zones may be sufficient to encourage bullish interaction, Friday’s lacklustre buying from H1 demand at 108.60-108.71 suggests the unit could be headed for H1 support at 108.39 before buyers attempt to make a show. Note the aforesaid support resides within the lower range of H4 demand noted above at 108.31-108.50.

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 snapped a five-month winning streak and formed what candlestick enthusiasts call an inside candle pattern (represents a short-term consolidation with low volatility). A breakout lower would generally be viewed as a bearish signal.

April has offered limited action so far, currently up by 0.4 percent.

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

Daily timeframe:

Sterling recovered earlier losses against the buck Friday and finished around session tops.

Despite the near-two-month corrective slide, GBP/USD has been trending higher since early 2020.

The technical arrangement on the daily chart remains unchanged. Quasimodo support at 1.3609 is seen, a level associated with a 1.272% Fib expansion at 1.3631, as well as 1.618% and 1.272% Fib extension levels at 1.3614 and 1.3607, respectively. In terms of resistance, April 6th top at 1.3919 is likely considered, closely shadowed by a trendline support-turned resistance, taken from the low 1.1409.

RSI movement finished Friday a touch above the 50.00 centreline, suggesting momentum to the upside could continue to gather traction this week.

H4 timeframe:

Latest developments out of the H4 chart reveal Friday crossed swords with trendline support-turned resistance, taken from the low 1.3670. Note this structure is sheltered just under resistance parked at 1.3852.

A rejection from the said resistances this week throws light back on a possible 1.3680 support test, while scaling above resistance tips the scales in favour of a push to April 6th top at 1.3919 mentioned above on the daily timeframe, with further outperformance to perhaps take aim at H4 Quasimodo resistance at 1.4007.

H1 timeframe:

Friday swept through any offers around 1.38 on Friday and triggered buy-stops. Technicians will note that price formed a bearish outside reversal into the close, alongside RSI action testing a trendline support-turned resistance (taken from the low 27.61).

What’s also technically appealing on the H1 scale this week is the Fib cluster (resistance) around 1.3870.

Observed levels:

Long term:

Although the monthly trendline resistance breach in late 2020 promotes a long-term bullish vibe, traders will likely want to see 1.4376 taken out before committing.

Short term:

Over on the shorter-term charts, buyers face a potential ceiling on the H4 scale at trendline resistance and horizontal resistance at 1.3852. H1 also turns the headlights on a Fib cluster around 1.3870. Given this, between 1.3870 and 1.3840ish, sellers could make an entrance in early trading this week, perhaps zeroing in on the 1.38 figure on the H1.

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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