February 21st 2020: Printing its Third Successive Gain, Dollar Index Now Eyes 100.00.

February 21st 2020: Printing its Third Successive Gain, Dollar Index Now Eyes 100.00., FP Markets

EUR/USD:

Monthly timeframe:

Outlook brought forward from previous analysis –

Despite a healthy attempt at recovery from demand at 1.0488/1.0912 in October 2019 – a particularly noteworthy area given the momentum derived from its base – EUR/USD failed to sustain gains, and had the unit retesting its upper boundary last week. Price, however, as you can see, has begun to tunnel its way deeper into the range this week.

Although down 2.74% on the month and in-line with the primary downtrend, which has been lower since 2008, we cannot rule out the possibility of fresh upside attempts from current demand.

Additional structure worth noting on the monthly timeframe is demand-turned supply at 1.1857/1.1352, a long-term trendline resistance (1.6038) and a reasonably ‘fresh’ demand area coming in at 0.9581/1.0221. Note this area boasts history dating back as far as 2003.

Daily timeframe:

Partially altered outlook from previous analysis –

Since retesting supply at 1.1117/1.1078, the unit has retained a strong underlying offer, consuming a demand zone at 1.1001/1.0946, dethroning the 1.0879 October 1st low and recently getting to know demand at 1.0680/1.0781. This area, formed April 2017, also houses a 127.2% Fibonacci ext. point within at 1.0724. Although this is an area buyers may find appealing, Thursday finished in the shape of a daily bearish outside pattern consequently suggesting sellers may look to strengthen their grip further here.

The RSI indicator remains pretty much unchanged, seen attempting a recovery from channel support, though still remains within its oversold range at 23.09.

H4 timeframe:

Thursday’s report informed readers price recently bottomed a few points ahead of supply-turned demand drawn from 1.0738/1.0774, snapping a five-day losing streak. The piece also underscored supply areas in view at 1.0838/1.0823 (yellow), glued to the lower boundary of a larger demand-turned supply at 1.0832/1.0877. The yellow zone marks a decision point to press lower, and welcomed a near-test of the area yesterday, before swinging back to the lower edge of the day’s range.

H1 timeframe:

Intraday action for EUR/USD staged a mini-revival to reclaim 1.08 in early US trade, though sentiment remained moderately negative, victim to a resilient US dollar index. In terms of the ECB minutes, little in the way of fresh insight was seen.

Technical developments reveal the pair topped a few points ahead of familiar supply at 1.0837/1.0824 (essentially the same as current H4 supply), garnering resistance off the 100-period SMA. 1.08 gave way in the later hours of US trade, potentially exposing demand at 1.0682/1.0700.

Direction:

The primary trend in this market has faced south since 2008; monthly demand at 1.0488/1.0912 shows signs of weakening, and daily price recently pencilled in a bearish outside day around the top edge of demand at 1.0680/1.0781. This, alongside H1 price languishing south of 1.08 with room to press as far south as demand at 1.0682/1.0700, could be sufficient to entice further selling today, and next week.

Intraday traders likely have their crosshairs fixed at the 1.08 boundary for potential bearish themes.

February 21st 2020: Printing its Third Successive Gain, Dollar Index Now Eyes 100.00., FP Markets

AUD/USD:

Monthly timeframe:

Outlook brought forward from previous analysis –

Demand at 0.6358/0.6839 remains in the fight, yet struggling to chalk up anything meaningful to the upside. An eventual break of the said demand zone has another layer of demand close by at 0.6094/0.5866, while a recovery could lead to trendline support-turned resistance (0.4776) making an appearance, followed by supply at 0.8303/0.8082.

Currently, the pair trades -1.20% on the month.

Daily timeframe:

Down nearly 1.00%, Thursday, by way of a near-full-bodied bearish candle, dug in and drove into supply-turned demand at 0.6642/0.6520. Note we’re now trading at decade lows.

0.6642/0.6520 is a bulky zone and fills a large portion of the current monthly demand highlighted above at 0.6358/0.6839.

The RSI, for those who follow indicators, recently re-entered oversold territory, after failing to reach the 50.0 mid-way value.

H4 timeframe:

Recent action on the H4 timeframe, thanks to yesterday’s downside, now has eyes for an area of support comprised of Fibonacci studies (161.8% Fibonacci ext. point and the 127.2% Fibonacci ext. point – green) between 0.6591/0.6606. Trendline support-turned resistance (0.6683), however, could hinder any upside attempts.

H1 timeframe:

Following a near to-the-point retest at 0.6650, AUD/USD journeyed to multi-year lows ahead of the 0.66 handle in the shape of a descending wedge pattern (0.6654/0.6630). In terms of the RSI indicator, mild bullish divergence is seen forming out of oversold terrain.

Direction:

The fact we have monthly price trading within demand at 0.6358/0.6839, daily price also recently entering an area of demand, H4 price circling ahead of Fibonacci support (green) at 0.6591/0.6606 and the H1 candles declining by way of a falling wedge pattern towards 0.66 support, a rebound from the 0.66 region could be at hand today, with the underside of the H4 trendline support-turned resistance set as the initial upside target.

February 21st 2020: Printing its Third Successive Gain, Dollar Index Now Eyes 100.00., FP Markets

USD/JPY:

Monthly timeframe:

Partially altered outlook from previous analysis –

Since kicking off 2017, USD/JPY has been busy carving out a descending triangle pattern. The breakout for this configuration is common to the downside, but an upward breakout is considered more reliable and profitable.

Outside of the current pattern, a supply area is visible at 126.10/122.66, while lower on the curve we have a demand area at 96.41/100.81.

In recent movement, price elbowed a touch outside the upper boundary of the aforementioned descending triangle.

Currently, the pair trades +3.40% on the month.

Daily timeframe:

Partially altered outlook from previous analysis –

Wednesday’s 150-point advance jumped through channel resistance (109.48) and reached highs of 111.59. Thursday capitalised on recent upside, journeying to highs at 112.22 and linking with channel resistance (red) from 108.47, and supply at 112.66/112.08.

Recent moves higher also formed a ‘rally-base-rally’ demand at 109.52/109.99.

H4 timeframe:

Supply at 111.68/111.42 made way yesterday, consequently unfastening the door to a supply area seen at 112.63/112.25.

Both noted zones are in focus on this scale, though the supply has backing from the daily supply/channel resistance combination and the upper edge of the monthly descending triangle pattern.

H1 timeframe:

Despite closing higher Thursday, the majority of the day’s gains were seen amid Asia and early Europe. US hours entered into a consolidation around the 112 handle, which, as of current price, is seen holding a touch above the psychological base.

Interestingly, the RSI indicator demonstrates bearish divergence (black line).

Direction:

Knowing we’re trading from daily supply at 112.66/112.08, monthly structure as well as within striking distance of H4 supply at 112.63/112.25, breakout longs above 112 may struggle. In its place, traders could be watching H1 price for signs of selling, such as a break of 111.70, or a decisive break beneath 112 followed up with a successful retest.

February 21st 2020: Printing its Third Successive Gain, Dollar Index Now Eyes 100.00., FP Markets

GBP/USD:

Monthly timeframe:

Brought forward from previous analysis –

Early February 2018 saw the pair reject 1.4520/1.3893, a 50.0% retracement and 38.2% Fibonacci retracement combination (red). This, along with trendline resistance (2.1161), remains a well-rounded resistance area to keep an eye on long term.

In recent months, we’ve seen a recovery form off 1.1904/1.2235, clocking highs of 1.3514 in December 2019. Breaking the 1.3380 March 2019 high may eventually see a retest of 1.4520/1.3893.

Currently, the pair trades at -2.39% on the month.

Daily timeframe:

Partially altered outlook from previous analysis –

Sterling continued to tunnel its way into demand at 1.2823/1.2910 Thursday, registering its fourth consecutive loss against the buck. The said demand represents the lower edge of a multi-month range (supply at 1.3303/1.3184 caps upside). Note we also have a local trendline resistance (1.3514) that could come into effect, should we rebound from the current demand base.

Beyond the said demand, another port of demand, a touch larger than the current, resides at 1.2649/1.2799, which happens to house the 200-day SMA (1.2688).

H4 timeframe:

Demand from 1.2868/1.2894 suffered a mild breach yesterday, with price clocking session lows at 1.2849. Violating this zone has perhaps cleared the river south for an approach to a nearby supply-turned demand zone at 1.2806/1.2833. A pullback, on the other hand, could see demand-turned supply re-enter the fold at 1.2916/1.2942.

H1 timeframe:

Thursday’s headline UK retail sales for January came in better than expected, lifting GBP/USD. The Office for National Statistics noted: Retail volumes increased by 0.9% in January 2020, recovering from the falls in the previous two months; the increase was mainly because of moderate growth in both food stores (1.7%) and non-food stores (1.3%).

Though scoring a high at 1.2926, the pair failed to capitalise on recent UK data, largely pressured by a strong USD bid across the board. Support emerged off the 1.2850 point (stationed just north of a demand area coming in at 1.2826/1.2841) following a decisive move south of 1.29.

Direction:

Technical studies show price trading reasonably deep within daily demand at 1.2823/1.2910. This area is questionable, not only because it has been tested a number of times already, but also due to H4 price recently overthrowing demand at 1.2868/1.2894. Note the H4 demand zone at 1.2806/1.2833 is positioned at the underside of the current daily demand and rests a touch above daily demand at 1.2649/1.2799.

Shorter-term flow has 1.29 potentially offering resistance today, with a break likely pushing for the 50-period SMA and trendline support-turned resistance (1.3001). In fact, a whipsaw through 1.29 to the aforementioned trendline resistance could be a potential bearish theme to watch for.

February 21st 2020: Printing its Third Successive Gain, Dollar Index Now Eyes 100.00., FP Markets

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.




Start Trading
in Minutes

bullet Access 10,000+ financial instruments
bullet Auto open & close positions
bullet News & economic calendar
bullet Technical indicators & charts
bullet Many more tools included

By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.




Source - cache | Page ID - 22405

Get instant Updates in Telegram