Charts: Trading View
(Italics: Previous Analysis Due to Limited Price Change)
EUR/USD:
Weekly timeframe:
Long-standing resistance at $1.1473-1.1583 (active S/R since late 2017) entertained a bearish showing early January; EUR/USD subsequently tumbled 3.0 percent, or 340 pips into the recent close.
Despite a bullish showing so far this week, territory below exhibits scope to fall as far south as Quasimodo support coming in at $1.0778.
Strengthening the bearish wind is the currency pair taking out 2nd November low (2020) at $1.1603 in late September (2021), indicating a downtrend on the weekly timeframe. This is reinforced by the monthly timeframe’s long-term (some would say ‘primary’) downtrend since mid-2008.
Daily timeframe:
Light remains on a decision point at $1.1369-1.1309, an area sharing chart space with trendline resistance, extended from the high $1.2254. Downstream, on the other hand, calls attention to prime support at $1.0941-1.1000, levels not seen since June 2020.
Momentum studies on this timeframe show the relative strength index (RSI) spun higher ahead of oversold waters and is poised to reconnect with the 50.00 centreline. Defending the latter would help validate the downtrend seen on the daily chart since late May 2021.
H4 timeframe:
H4 price action meanwhile is joining hands with a decision point coming in from $1.1300-1.1272, aided by $1.1272 resistance and two Fibonacci ratios: a 61.8% retracement at $1.1275 and a 38.2% retracement at $1.1261. The response to the aforementioned areas could lead to a return to support at $1.1193, and intersecting trendline resistance-turned support, drawn from the high $1.1483.
H1 timeframe:
H1 prime resistance made a show at $1.1283-1.1265 on Tuesday, adding weight to the H4 timeframe’s decision point at $1.1300-1.1272. The $1.1234-1.1246 decision point, consequently, is now active. While bulls have expressed interest in the area over the last hour, dropping through the zone highlights the $1.12 figure as a reasonable downside target, aligning with a 50.0% retracement.
Concerning the relative strength index (RSI), the value fell from overbought levels and is within earshot of the 50.00 centreline. Journeying under the latter is likely to be viewed as weakness and signals a fragile $1.1234-1.1246 zone.
Observed Technical Levels:
The H1 timeframe dropping through the $1.1234-1.1246 decision point unshackles a short-term bearish theme towards $1.12. A break/retest of $1.1234-1.1246, therefore, may be something to keep an eye on. Defending $1.1234-1.1246, on the other hand, could eventually lift the currency pair above H1 prime resistance at $1.1283-1.1265 and the H4 decision point at $1.1300-1.1272 to test the daily timeframe’s decision point at $1.1369-1.1309.
AUD/USD:
Weekly timeframe:
Deep within the walls of prime support at $0.6968-0.7242, AUD/USD bulls secured a strong bid. Up 1.72% on the week (reclaiming a large portion of the prior week’s losses), additional upside shines light on resistance at $0.7501. Manoeuvring beneath $0.6968-0.7242, however, reveals support at $0.6673 and a 50.0% retracement at $0.6764.
Since mid-Feb tops at $0.8007 (2021), sellers have taken the wheel. This followed a bullish period since pandemic lows of $0.5506 (March 2020). It is important to note the monthly timeframe has been entrenched within a large-scale downtrend from mid-2011.
Daily timeframe:
Support at $0.7021—a level boasting eye-watering historical significance since 1994—commanded attention on Monday, adding weight to the recent recovery within weekly prime support at $0.6968-0.7242. Quasimodo support at $0.6896 resides south of current support should sellers retake control.
January tops around $0.7283 are visible if buyers continue exploring higher levels, closely shadowed by trendline resistance, taken from the high $0.7891.
RSI studies (relative strength index) show the indicator bottomed north of oversold space and is exploring the possibility of connecting with the 50.00 centreline. In terms of trend, the daily timeframe remains underwater, shown by way of trendline resistances, taken from highs $0.8807/$0.7891.
H4 timeframe:
Bullish forces, following a successful retest of the $0.7046-0.7023 support zone, dethroned resistance at $0.7097 on Tuesday. This potentially sets the technical stage to resistance at $0.7169-0.7187, accompanied by two 61.8% Fibonacci retracements at $0.7182 and $0.7160.
H1 timeframe:
The $0.7042 support served this timeframe well in recent trading, allowing an early bid to overthrow supply from $0.7088-0.7073. Subsequent movement retested the aforementioned area, establishing enough of a floor to clear $0.71 in US trading.
Upriver, Quasimodo support-turned resistance warrants attention at $0.7129, followed by Quasimodo resistance at $0.7170 which happens to reside within the lower boundary of the H4 resistance zone underlined above at $0.7169-0.7187.
In spite of the $0.71 breach, a move typically implying bullish strength, the relative strength index (RSI) shows modest bearish divergence ahead of overbought space.
Observed Technical Levels:
The bullish showing within weekly prime support at $0.6968-0.7242 and from daily support at $0.7021 swings the pendulum in favour of further buying. The combination of H4 support at $0.7097 and the $0.71 figure, as well as the H1 support zone at $0.7088-0.7073, therefore, could be retested and hold. Ultimately, longs in this market will likely be anticipating a break of H1 Quasimodo support-turned resistance at $0.7129, targeting H1 Quasimodo resistance at $0.7170.
USD/JPY:
Weekly timeframe:
The 1.272% Fibonacci projection from ¥116.09 remains a technical headwind.
Channel support, taken from the low ¥102.59, inhabits neighbouring territory, emphasised by nearby support at ¥112.16. The aforementioned areas remain favoured locations on the weekly scale, in line with the underlying trend (advancing since the beginning of 2021).
Further buying, movement overtaking ¥116.09, may eventually underpin a move to channel resistance, extended from the high ¥110.97.
Daily timeframe:
The technical landscape on the daily chart reveals price engulfed the neckline of a double-top formation (¥113.48) at ¥115.06. Despite a recent three-day slide (0.9 percent), Quasimodo resistance at ¥116.33 remains a reasonable upside target.
The trend on this timeframe, like the weekly timeframe, faces northbound and supports a move higher. This is reinforced by the relative strength index (RSI) recoiling from support between 40.00 and 50.00 (a ‘temporary’ oversold range since 10th May—common view in trending markets).
H4 timeframe:
The ¥114.48-114.78 decision point welcomed price action on Tuesday. A recovery from here supports the higher timeframe view and could take aim at last Friday’s high ¥115.69, whereas a breach indicates weak interest in the daily timeframe’s double-bottom pattern, and a drop towards trendline resistance-turned support (taken from the high ¥116.35) could be in order, together with a decision point at ¥113.54-113.78.
Therefore, ¥114.48-114.78 is a key watch.
H1 timeframe:
USD/JPY rolled into notable technical confluence in recent trading, made up of a 50.0% retracement at ¥114.58, a 1.618% Fibonacci projection at ¥114.68 and a trendline support, pencilled in from the low ¥113.47.
In addition to the noted structure, the relative strength index (RSI) rebounded from oversold levels on Tuesday and is currently circling above 40.00 and threatening a test of the 50.00 centreline.
Observed Technical Levels:
The H4 decision point at ¥114.48-114.78, coupled with H1 trendline support and a 1.618% Fibonacci projection at ¥114.68, in addition to the underlying trend facing higher, buyers may show from noted H1 and H4 structure. ¥115, therefore, serves as a local target to the upside, with a break perhaps eyeing last Friday’s high around ¥115.69.
GBP/USD:
Weekly timeframe:
Reaching a top at $1.3749 in early January watched GBP/USD bears assume control. While this re-opens the door to the double-top pattern’s ($1.4241) profit objective around $1.3093 (red boxes), traders will note the currency pair is up by 1.0 percent this week, reclaiming the prior week’s downside.
‘Consumed supply’ (blue area) remains nearby between $1.4001 and $1.3830. Considering this, candle action might be guided as far north as resistance from $1.4371-1.4156 in the event price climbs above $1.3830.
Trend studies, despite the 7.5 percent dip from ‘double-top’ peaks at 1.4250ish, show the weekly timeframe has been higher since early 2020. However, it’s important to recognise that while the trend on the weekly timeframe demonstrates a moderate upside bias, the monthly timeframe’s long-term trend has been lower since late 2007.
Daily timeframe:
Dollar softness, combined with the Bank of England (BoE) expected to hike rates on Thursday, GBP/USD bulls remained in the driving seat on Tuesday, extending recovery gains ahead of support at $1.3355. Additional interest to the upside draws resistance into the fold at $1.3602, followed by the 200-day simple moving average (currently circling $1.3713).
A break of noted support exposes Quasimodo support at $1.3119, a base situated just under December bottoms around $1.3172.
Trend on this timeframe remains biased to the downside; the relative strength index (RSI) holding a test of the 50.00 centreline could reaffirm the downside bias.
H4 timeframe:
Quasimodo resistance at $1.3498 was overpowered on Tuesday, a level which has subsequently delivered support. Resistance at $1.3572 is seen to the upside, with a break showing resistance at $1.3622-1.3646.
H1 timeframe:
Last Wednesday’s tops at $1.3523 are currently being challenged, arranged north of $1.35. This followed an earlier break of trendline resistance, drawn from the high $1.3743. Upstream throws interest on resistance at $1.3549, with $1.36 seen higher.
In line with recent upside, the relative strength index (RSI) ventured into overbought territory, a location upside momentum typically fades.
Observed Technical Levels:
The psychological figure $1.36 (H1) and daily resistance from $1.3602 serves as reasonably strong confluence to be mindful of.
Nevertheless, knowing the H1 RSI is recording overbought conditions, more immediate levels to be aware of on the H1 scale are last Wednesday’s tops at $1.3523 and resistance at $1.3549.
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