July 9th 2020: US Dollar Index Dips Under 96.50; Daily Support at 95.84 Eyed

July 9th 2020: US Dollar Index Dips Under 96.50; Daily Support at 95.84 Eyed, 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.

June extended gains to highs at 1.1422 and finished adding 1.19%, despite running into opposition at the lower ledge of nearby supply from 1.1857/1.1352 mid-month (unites with long-term trendline resistance [1.6038]).

July is currently seen toying with the aforesaid supply.

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

Daily timeframe:

Partially altered from previous analysis –

The month of June observed EUR/USD address a potential reversal zone (PRZ), derived from a harmonic bearish bat pattern. The base is comprised of an 88.6% Fib level at 1.1395, a 161.8% BC projection at 1.1410 and a 161.8% Fib ext. level at 1.1462 (red oval). It’s typical, in the case of bearish formations, to see traders sell PRZs and place protective stop-loss orders above the X point (1.1495). Common take-profit targets fall in at the 38.2% and 61.8% Fib levels (of legs A/D) at 1.1106 and 1.0926, respectively.

As you can see, buyers appear to be gathering traction, leaving sellers in a precarious situation as the Fib targets have yet to be met.

H4 timeframe:

Buyers and sellers exchanged words at channel support (prior resistance – 1.1422) in recent activity, leading to the pair advancing and crossing paths with resistance at 1.1348.

Price action is interesting on this timeframe, as space beyond 1.1348 underscores supply at 1.1415/1.1376, which happens to align with a potential three-drive pattern at the 127.2% Fib ext. level from 1.1383.

H1 timeframe:

US trade witnessed increased demand for euros as the DXY split 96.50 to the downside. EUR/USD on the H1 timeframe brushed aside 1.13, as well as supply at 1.1316/1.1306, which, as you can see, was later retested as demand before connecting with 1.1350 resistance. While current action is feasting on levels just south of the latter, a violation of the level provides a basis to approach the 1.14 level.

Structures of Interest:

1.1350 resistance on the H1 shares the same space with H4 resistance at 1.1348.

Ultimately, though, H4 price likely wants to bring in supply at 1.1415/1.1376, and its three-drive pattern at 1.1383.

This indicates a possible break above 1.1350 today and test of the aforesaid H4 supply, which may, owing to the area’s confluence, see traders pursue bearish strategies.

July 9th 2020: US Dollar Index Dips Under 96.50; Daily Support at 95.84 Eyed, 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’s follow-through, has supply at 0.7029/0.6664 echoing a vulnerable tone in early July, particularly as an intersecting long-term trendline resistance (1.0582) shows signs of giving way.

Regarding the market’s primary trend, a series of lower lows and lower highs have been present since mid-2011.

Daily timeframe:

Partially altered from previous analysis –

AUD/USD ousted resistance at 0.6931 Monday, with Wednesday elevating higher from the base as support.

The break to the upside shines focus on two trendline resistances close by (prior supports – 0.6744/0.6671); a violation here unmasks another resistance at 0.7197.

H4 timeframe:

Partially altered from previous analysis –

Since June 10, H4 has been in the process of establishing a (bullish) pennant pattern between 0.7064/0.6776, generally considered a continuation pattern among chart pattern traders.

As you can see, last week had price penetrate the upper boundary of the aforesaid pennant, unearthing a buy signal.

In light of daily price establishing support off 0.6931, H4 supply at 0.7058/0.7029 remains featured as the next obstacle on this timeframe.

H1 timeframe:

Renewed interest to the upside Wednesday, following a revisit to local demand at 0.6939/0.6952 (joins with the 0.6950 support and 100-period simple moving average), observed H1 complete a local ABCD correction at 0.6982, ahead of supply at 0.7003/0.6987 (houses 0.70 within its upper limits).

Candlestick traders will also acknowledge a recent shooting star pattern, generally considered a bearish reversal formation at peaks.

Structures of Interest:

Monthly price appears to be squeezing sellers out of the market as daily price holds 0.6931 as support. This, coupled with room to advance on the H4 to supply at 0.7058/0.7029, may see the H1 ABCD correction struggle to chalk up anything meaningful to the downside.

The most ABCD sellers will likely receive is the 38.2% Fib level at 0.6962 (of legs A/D), widely considered as an initial take-profit target.

July 9th 2020: US Dollar Index Dips Under 96.50; Daily Support at 95.84 Eyed, 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 busy 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 –

Despite failing to connect with the 200-day simple moving average at 108.37 last week, upside momentum came to an abrupt halt and fashioned a bearish outside day.

Having seen an indecisive tone take over the pair of late, light still shines on a possible run back to demand at 105.70/106.66.

H4 timeframe:

Partially altered from previous analysis –

Demand at 107.03/107.28 remains a key feature on the H4 timeframe, despite price failing to journey above 107.70. It should also be noted, in case we cross into deeper water, we have a trendline support lurking just beneath the current demand zone, drawn from 106.58.

H1 timeframe:

Intraday navigated through 107.50 during early US trade Wednesday and, within the space of three dominant H1 bearish candles, we witnessed price make contact with demand at 107.16/107.26 (located within the upper boundary of H4 demand).

Buyers, as you can see, are attempting to make a show, confirmed by bullish RSI divergence.

Failure to hold here will throw light on the 107 level and associated trendline support (prior resistance – 107.45).

Structures of Interest:

A rally from H1 demand at 107.16/107.26 is a possibility, due to its connection with H4 demand at 107.03/107.28.

Traders will also mark 107 as viable support on the H1, a level joining with H1 trendline support (107.45), as well as another trendline support from the H4 timeframe (106.58).

July 9th 2020: US Dollar Index Dips Under 96.50; Daily Support at 95.84 Eyed, 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) remains clear structure on the monthly timeframe at the moment, with the latter prompting a notable upper shadow in June.

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

Daily timeframe:

Partially altered from previous analysis –

Demand at 1.2192/1.2361 received price action last week, stirring a notable bid. This week has continued to build on recent momentum, sailing to highs at 1.2623.

To the upside, traders will still be looking at the 200-day simple moving average at 1.2687 as the next available resistance, with a violation uncovering supply at 1.3021/1.2844.

H4 timeframe:

Mid-morning trade in London observed a dip to lows at 1.2508, missing demand at 1.2462/1.2506 by a hair before rotating to the upside.

The pound’s aggressive appreciation against the greenback reclaimed Tuesday’s high at 1.2592 and landed within close proximity to resistance at 1.2629.

H1 timeframe:

It was revealed in Wednesday’s analysis that 1.25 offered well-grounded support, aligning with two trendline supports (1.2529/1.2257) and the 100-period simple moving average (red oval).

As visible from the chart, price fell short of the 1.25 level, though crossed paths with trendline support (1.2529) before spinning higher. Upside unseated 1.2550 resistance as well as the 1.26 level, which, as you can see, is currently being retested as support by way of a hammer candlestick pattern, a bullish signal among candlestick traders, with 1.2650 set as the next upside objective.

Structures of Interest:

The recent H1 retest at 1.26 is interesting, perhaps enough to draw in additional buyers today.

Buyers off 1.26 will look to address 1.2629 on the H4, 1.2650 resistance on the H1 and 200-day simple moving average at 1.2687, based on the daily timeframe.

July 9th 2020: US Dollar Index Dips Under 96.50; Daily Support at 95.84 Eyed, 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 - database | Page ID - 22521

Get instant Updates in Telegram