July 22nd 2020: Single Currency Breached 1.15 Post Recovery Fund Agreement

July 22nd 2020: Single Currency Breached 1.15 Post Recovery Fund Agreement, FP Markets

EUR/USD:

Monthly timeframe:

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

The month of May, as you can see, recovered off worst levels out of demand from 1.0488/1.0912 and closed firm. This prompted an extension in June to highs at 1.1422, adding 1.2% despite running into opposition at the lower ledge of nearby supply from 1.1857/1.1352 (unites with long-term trendline resistance [1.6038]).

Interestingly, July, currently trading +2.6%, is crossing paths with the aforesaid trendline resistance.

With reference to the primary trend, the pair has exhibited lower peaks and troughs since 2008.

Daily timeframe:

EUR/USD retained a strong underlying bid Tuesday, pushing to highs at 1.1539 and throwing light on resistance from 1.1553.

Fresh demand is seen close by at 1.1369/1.1414, along with trendline support (1.0774).

Indicator-based traders will also want to note the RSI oscillator recently crossed into overbought territory.

H4 timeframe:

With the US dollar index plunging towards 95.00, EUR/USD made a run higher and crossed paths with supply at 1.1545/1.1518 on Tuesday, an area intersecting closely with channel resistance (1.1447).

What’s also notable from a technical viewpoint is recent buying established firm demand at 1.1422/1.1456. Additionally, traders also have nearby channel support (1.1255) to work with on this timeframe.

H1 timeframe:

Fed by a wave of USD selling, EUR/USD chewed through 1.15 yesterday, leaping to levels just south of 1.1550 resistance. A dip to 1.15, and joining channel support (prior resistance – 1.1466), could be in the offing owing to the mild end-of-day correction.

Also of note is the 100-period simple moving average, since July 13, has provided intraday action a dynamic trendline support to work with. Furthermore, the RSI value is currently seen turning south within overbought terrain.

Structures of Interest:

1.15 is likely on the radar as support for intraday buyers today, though many will be fearful of a breach given we’re coming from H4 supply at 1.1545/1.1518.

Daily resistance at 1.1553 is interesting, lending weight to 1.1550 resistance on the H1 timeframe as a possible reversal zone.

July 22nd 2020: Single Currency Breached 1.15 Post Recovery Fund Agreement, FP Markets

AUD/USD:

Monthly timeframe:

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

May’s extension, together with June and July’s follow-through has seen supply at 0.7029/0.6664, and intersecting long-term trendline resistance (1.0582), give way in recent trading. Technically, this may liberate buyers to as far north as 0.8303/0.8082, a supply zone that aligns closely with trendline resistance (prior support – 0.4776).

Despite this, the market’s primary trend points south, demonstrating a series of lower lows and lower highs since mid-2011.

Daily timeframe:

Since ousting resistance at 0.6931 the level has been featured as support, with price, thanks to robust upside yesterday, now on course to tackle 0.7197 resistance.

In terms of the RSI oscillator, the value recently entered overbought territory.

H4 timeframe:

Tuesday, as you can see, welcomed supply at 0.7158/0.7137, an area extended from April 2019. Rotating from this area today shines light on 0.7102/0.7084, a supply-turned demand zone, with a break unmasking demand at 0.7015/0.7035 (notable decision point to break the 0.7064 high [June 10]).

H1 timeframe:

Tuesday’s decisive advance sailed through 0.7050 resistance and also the 0.71 level, reaching levels just shy of 0.7150 resistance. Traders will note the RSI value also reached as far north as 93.00.

Lacking active demand, price action traders will likely be watching for 0.7150 or 0.71 to make an appearance today.

Structures of Interest:

Having noted monthly price climbing through supply at 0.7029/0.6664 and daily price exhibiting scope to press towards 0.7197 resistance, as well as the immediate trend pointing northbound, H4 supply at 0.7158/0.7137 may struggle.

Nevertheless, a mild response out of the aforesaid H4 supply could be sufficient enough to draw in 0.71 support on the H1 for a possible retest (merges with H4 demand at 0.7102/0.7084), in line with direction on monthly and daily timeframes.

July 22nd 2020: Single Currency Breached 1.15 Post Recovery Fund Agreement, FP Markets

USD/JPY:

Monthly timeframe:

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

Since kicking off 2017, USD/JPY has been carving out a descending triangle pattern between 118.66/104.62.

April and May were pretty uneventful, with June also wrapping up indecisively in the shape of a neutral doji candlestick pattern.

Areas outside of the noted triangle can be seen at supply from 126.10/122.66 and demand coming in at 96.41/100.81.

Daily timeframe:

Brought forward from previous analysis –

Demand at 105.70/106.66 remains in focus on the daily timeframe. Although a reasonably hardwearing zone since early May, buyers appear to be lacking spirit. The previous reaction on June 23, as you can see, failed to reach the 200-day simple moving average at 108.34 before rotating lower, emphasising buyer weakness.

Moves below current demand re-opens the risk of a return to support at 105.01.

H4 timeframe:

Brought forward from previous analysis –

Recent developments on the H4 timeframe reveal price movement to be carving out a consolidation between supply at 107.60/107.42 and demand coming in from 106.39/106.64.

Traders will also note the latter comes with a 161.8% Fib ext. level at 106.67 and is situated within the upper boundary of daily demand from 105.70/106.66.

Outside of the aforesaid range, peaks around 107.77 and the 108.09 level represent resistance, while through demand we can see support at 105.99.

H1 timeframe:

Trendline support (106.66) and the 100-period simple moving average, along with the 107 level, all gave way to reach support at 106.70 yesterday, a level that’s withstood two major downside attempts. 106.50 support remains in place should the pair decide on lower levels.

In terms of the RSI momentum oscillator, the value dug in and tested 22.00 yesterday and appears to want to now exit oversold territory.

Structures of Interest:

Failure to respond to H1 support at 106.70 today, 106.50 is likely on the cards as feasible support. Traders will note the level shares space with H4 demand at 106.39/106.64, which, as underlined above, is plotted inside daily demand at 105.70/106.66.

July 22nd 2020: Single Currency Breached 1.15 Post Recovery Fund Agreement, FP Markets

GBP/USD:

Monthly timeframe:

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

Support at 1.1904/1.2235 and long-term trendline resistance (1.7191) offers clear structure to work with on the monthly timeframe, with the latter recently welcoming price action.

Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008, placing 1.1904/1.2235 support in a vulnerable position.

Daily timeframe:

After mingling below the 200-day simple moving average at 1.2698 since July 9, yesterday’s action squeezed above the aforesaid value. This could witness price action work its way back to supply coming in from 1.3021/1.2844.

Furthermore, the RSI is seen closing in on overbought levels.

H4 timeframe:

Supply from 1.2720/1.2682 ceded ground Tuesday, with price action currently retesting the latter as demand. A GBP revival today has the 127.2% Fib ext. level at 1.2783 to target, closely followed by supply at 1.2851/1.2805.

H1 timeframe:

Tuesday, despite a brief flicker of activity around 1.27, observed price action push for space above 1.2750 resistance. As you can see, though, price movement failed to sustain gains above 1.2750 and, at the time of writing, has retreated to within a stone’s throw away from 1.27.

Interestingly, bearish divergence out of overbought waters was also seen yesterday, as we journeyed into 1.2750+ territory.

Structures of Interest:

With trade recently nudging into monthly trendline resistance, this could perhaps hinder upside attempts. Despite this, crossing the 200-day simple moving average on the daily timeframe is likely to lift the pair to supply at 1.3021/1.2844, a potential location active sellers reside.

With this being the case, dip-buying strategies off 1.27 (H1) could be seen today, having noted the psychological level sharing space with H4 demand at 1.2720/1.2682.

July 22nd 2020: Single Currency Breached 1.15 Post Recovery Fund Agreement, 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.




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