June 17th 2020: DXY Resurgence Reclaims 97.00 Consequently Throwing 98.00 in Sight

June 17th 2020: DXY Resurgence Reclaims 97.00 Consequently Throwing 98.00 in Sight, FP Markets

EUR/USD:

Monthly timeframe:

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

April spent the best part of the month feasting on the top edge of demand from 1.0488/1.0912, squeezing out a Japanese hammer candlestick pattern, typically viewed as a bullish reversal signal.

May, as you can see, recovered off worst levels and wrapped up a few pips shy of monthly highs, with June extending gains and recently reconnecting with the lower shelf of supply at 1.1857/1.1352 (unites with long-term trendline resistance [1.6038]).

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

Daily timeframe:

Brought forward from previous analysis –

Last week had EUR/USD address a potential reversal zone (PRZ), derived from a harmonic bearish bat pattern (comprised of an 88.6% Fib ret level at 1.1395, a 161.8% BC projection at 1.1410 and a 161.8% Fib ext. level at 1.1462 [red oval]), and rotate lower into the week’s end. Price has so far remained under the aforesaid area this week.

In addition to the bearish configuration, the RSI indicator recently exited overbought territory.

It’s common to see traders sell PRZs and place protective stop-loss orders above the X point, in this case at 1.1495. Common targets fall in at the 38.2% and 61.8% Fib ret levels (derived from legs A/D) at 1.1106 and 1.0926, respectively.

H4 timeframe:

Heading into the second half of the London session Tuesday, EUR/USD exhibited a one-sided display to the downside. Leaving supply at 1.1415/1.1376 (an area boasting a connection to the daily PRZ structure) unopposed, support at 1.1226 came within inches of making an entrance.

Demand at 1.1189/1.1158 (prior supply) must be monitored upon breaking support at 1.1226, along with fresh demand coming in from 1.1115/1.1139.

H1 timeframe:

Sellers off the underside of the 100-period simple moving average proved too much for the 1.13 handle into early US trade Tuesday, dropping to lows under 1.1250.

1.12 may serve as support going forward, as might the 1.13 handle as resistance and nearby supply at 1.1343/1.1317 (boasts a relationship with trendline resistance [1.1422]).

RSI traders will also note we just rebounded from oversold territory.

Structures of Interest:

With orders weakened at 1.1250 as support on the H1 timeframe, and considering the higher-timeframes landscape, we could be heading for 1.12 today and possibly even H4 demand at 1.1189/1.1158 located just under it. As such, bearish signals below 1.1250 may be welcomed by sellers today.

Otherwise, an advance to H1 supply at 1.1343/1.1317 could be thrown in sight, an area likely to cap upside and deliver a healthy move lower.

June 17th 2020: DXY Resurgence Reclaims 97.00 Consequently Throwing 98.00 in Sight, 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 and June’s current rally has seen price test the mettle of monthly supply at 0.7029/0.6664. Technically, the area benefits from additional resistance by way of a long-term trendline formation (1.0582).

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 –

Buyers and sellers on the daily timeframe recently squared off under two trendline resistances (prior supports – 0.6744/0.6671), eventually shipping price through support from 0.6931. Monday returned with a bullish outside day formation, forcing a retest at the underside of 0.6931 on Tuesday.

Support at 0.6755 also remains in view.

It may also interest traders to note the 200-day simple moving average at 0.6664 is in the process of flattening/marginally turning higher, following months of drifting lower.

H4 timeframe:

Partially altered from previous analysis –

Following Monday’s recovery out of demand at 0.6773/0.6814, joined with a 38.2% Fib ret level at 0.6808, AUD/USD found trendline resistance (prior support – 0.6856) to be welcoming on Tuesday. This base, together with a 61.8% Fib ret level at 0.6947, sent the pair to lows at 0.6833, throwing light on the possibility of another test of demand at 0.6773/0.6814.

H1 timeframe:

Early US prompted a meaningful decline through 0.69 and the 100-period simple moving average into the 0.6850 base and local support at 0.6845.

The day concluded retesting 0.69 as resistance. Supply at 0.6932/0.6918 offers the next upside objective along with neighbouring resistance at 0.6950.

Structures of Interest:

Monthly supply at 0.7029/0.6664, along with monthly trendline resistance, and daily resistance at 0.6931, could have H1 candles run stops above 0.69 today and test H1 supply at 0.6932/0.6918 for moves back to at least 0.6850.

June 17th 2020: DXY Resurgence Reclaims 97.00 Consequently Throwing 98.00 in Sight, 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.

The month of March concluded by way of a long-legged doji candlestick pattern, ranging between 111.71/101.18, with extremes piercing the outer limits of the aforementioned descending triangle formation. April was pretty uneventful, ranging between 109.38/106.35. May also remained subdued, ranging between 108.08/105.98, with June currently off best levels, down 0.4%.

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

Daily timeframe:

Partially altered from previous analysis –

Demand at 105.70/106.66 welcomed price action late last week and, as you can see, put forth a bullish phase Friday. Despite the recovery, impetus lacked Monday and Tuesday, both days finishing indecisively.

The question going forward, therefore, is the rebound from current demand enough to impress buyers to draw in a retest at the 200-day simple moving average at 108.41?

H4 timeframe:

Brought forward from previous analysis –

Supply at 107.51/107.76 (prior demand) remains a visible fixture on this timeframe, holding price beneath its walls so far this week. What’s interesting here is the area has failed to deliver much in the way to the downside, unable to even reach support at 106.91. This suggests buyers have the advantage right now, shining light on resistance at 108.09.

H1 timeframe:

107 made a showing at the beginning of the week, pulling the candles above the 100-period simple moving average, which, as you can see, held as support. Tuesday, as expected, price made an attempt to bring in supply at 107.86/107.67, sheltered a few pips under the 108 level.

Structures of Interest:

Daily demand at 105.70/106.66 re-entering vision is an encouraging sign for buyers, though, as underlined in Tuesday’s analysis, still faces opposition by way of H4 supply at 107.51/107.76.

Having noted H4 sellers out of current supply at 107.51/107.76 lacking impetus, technical studies point to a move into H1 supply at 107.86/107.67 (located around the upper edge of H4 supply). Further to this, a whipsaw through supply in favour of a test at 108 should not surprise.

A break of 108 today may also send price to 108.50, a level aligning closely with the 200-day simple moving average.

June 17th 2020: DXY Resurgence Reclaims 97.00 Consequently Throwing 98.00 in Sight, 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 remains in motion in June, with the month currently recording gains of more than 1.7% despite facing long-term trendline resistance (1.7191).

Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008.

Daily timeframe:

Recent developments witnessed buyers and sellers butt heads around the 200-day simple moving average at 1.2682. Sellers held the moving average in strong form, producing a Japanese shooting star candlestick pattern, considered a bearish signal.

Another day dominated by sellers shifts focus to demand at 1.2192/1.2361, an area glued to the top edge of monthly support and considered the decision point to crack 1.2647 (April 14 high). Yet, seeking higher ground moves supply at 1.3021/1.2844 into the firing range.

H4 timeframe:

H4 price failed to muster enough oomph to maintain a presence above resistance at 1.2629, in spite of testing the base as support. This is likely to see candle action work its way to demand at 1.2476/1.2526, an area boasting a close connection with a 38.2% Fib ret level at 1.2534.

Should 1.2476/1.2526 fail, neighbouring demand rests at 1.2374/1.2427, bringing with it a trendline support (1.2075).

H1 timeframe:

Crossing under 1.26 and retesting the level as resistance amid US trade Tuesday, may see further softening today to 1.25. This is largely due to the chart being starved of support until 1.25. The upper demand (upper blue arrow) around 1.2565 was likely consumed yesterday. Lower demand (lower blue arrow) around 1.2535 gives the impression buy orders were collected soon after forming.

Structures of Interest:

The retest at 1.26 is interesting. Sellers are likely to pack a punch here, backed by all three higher timeframes exhibiting scope to press lower.

1.25 makes for an interesting downside target as well as a platform to consider buying opportunities, having seen the round number located within H4 demand at 1.2476/1.2526.

June 17th 2020: DXY Resurgence Reclaims 97.00 Consequently Throwing 98.00 in Sight, FP Markets

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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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