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:
Partially altered 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.
According to the harmonic pattern’s overall structure, price is tipped for more underperformance.
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 (legs A/D) at 1.1106 and 1.0926, respectively. Note in between the said Fib levels traders must also contend with the 200-day simple moving average at 1.1025.
In addition to the bearish configuration, the RSI indicator recently exited overbought territory and eyes the 50.00 value.
H4 timeframe:
As expected, sellers softened through familiar support from 1.1226 Thursday to greet demand at 1.1189/1.1158 (prior supply).
Another area that must be monitored is fresh demand coming in from 1.1115/1.1139, uniting with an ABCD formation and trendline support (1.0774).
H1 timeframe:
Upside attempts through 1.1250 proved unsustainable amid early London Thursday, eventually sparking a wave of selling heading into US trade towards 1.12.
As traders digest the possibility of 1.12 giving way, active demand to the left of price under this level appears limited, exposing 1.1150 as feasible support.
Structures of Interest:
The response out of monthly supply at 1.1857/1.1352, along with price respecting the daily harmonic bearish bat pattern and suggesting we may be headed for the 38.2% Fib ret level at 1.1106, promotes further selling on the bigger picture.
Short term, H4 demand at 1.1189/1.1158 is currently feeding a mild recovery, sponsored also by the 1.12 level on the H1. Buyers from here are urged to keep tabs on H4 resistance at 1.1226.
Dips from current price, nevertheless, will likely take aim at 1.1150 on the H1, located just ahead of H4 demand at 1.1115/1.1139 (along with H4 ABCD confluence).
AUD/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
May’s extension as well as June’s follow-through has seen price test the mettle of monthly supply at 0.7029/0.6664. Technically, the area also 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 –
Last week saw buyers and sellers on the daily timeframe square off under two trendline resistances (prior supports – 0.6744/0.6671), eventually shipping price through support from 0.6931. The beginning of the week returned with a bullish outside day formation, forcing a retest at the underside of 0.6931 on Tuesday that eventually delivered some downside on Thursday.
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 rotating higher, following months of drifting lower.
H4 timeframe:
Partially altered from previous analysis –
Tuesday threw AUD/USD into trendline resistance (prior support – 0.6856), a level joining with a 61.8% Fib ret level at 0.6947. Sellers struggled to pull anything out of the hat Wednesday, while Thursday trekked to lower terrain.
Demand at 0.6773/0.6814 deserves notice, an area that boasts a connection with a 38.2% Fib ret level at 0.6808 and sparked a 100+ pip advance at the beginning of the week.
H1 timeframe:
Since the beginning of the week, H1 has been in the process of forming a descending triangle pattern. Although it’s usual to see these form in a downtrend, they can represent reversal patterns. However, a break in either direction is equally possible.
Below, traders will note 0.68 resting as possible support. To the upside, the 100-period simple moving average may throw in some resistance, with a break pointing to 0.69/supply at 0.6932/0.6918.
Structures of Interest:
The combination of monthly supply at 0.7029/0.6664, along with monthly trendline resistance, and daily resistance at 0.6931, is likely to weigh on price today/next week, potentially guiding a move out of the H1 descending triangle to at least 0.68 (landing H4 price back at demand from 0.6773/0.6814).
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 0.8%.
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 Thursday and, as you can see, put forth a mild bullish recovery. Despite this, impetus is still lacking, threatening a dive into the aforesaid demand.
To the upside, the 200-day simple moving average at 108.40 can be seen as the next possible resistance.
H4 timeframe:
Supply at 107.51/107.76 (prior demand), albeit initially echoing a fragile tone, sent USD/JPY southbound Wednesday. Thursday followed through and whipsawed beyond support at 106.91 to challenge demand at 106.49/106.66, an area fixed at the top edge of daily demand at 105.70/106.66.
H1 timeframe:
Early trade watched H1 burrow through 107 and strike the top edge of H4 and daily demand at 106.66.
Sellers appear to be reluctant to commit under 107, with price attempting to retake control of the level into Asia this morning. Territory above 107 throws light on the 100-period simple moving average, followed by trendline resistance (prior support – 107.00).
Structures of Interest:
Protective stop-loss orders from traders that attempted to fade 107 were tripped in recent movement, and breakout sell-stop entry orders were also filled. In light of this liquidity, a long from daily and H4 demand made sense. Therefore, a H1 close above 107 could prove fruitful.
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 in view, with the latter so far prompting an attractive upper shadow this month.
Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008.
Daily timeframe:
Sterling maintained its offered tone Thursday, following Tuesday’s retest at the 200-day simple moving average from 1.2683, down more than 1% on the session.
Fresh selling shifts focus to demand at 1.2192/1.2361, an area not only fastened to the top edge of monthly support but also considered the decision point to break 1.2647 (April 14 high).
H4 timeframe:
Thursday left behind demand at 1.2476/1.2526, despite a clear attempt to defend the base. In one fell swoop, H4 action dethroned both the aforesaid demand and trendline support (1.2075), landing the pair within the walls of demand at 1.2374/1.2427.
Below this zone, a 61.8% Fib ret level is seen nearby at 1.2360.
H1 timeframe:
Sterling initially bounced Thursday after the Bank of England boosted QE by GBP 100bln (rates unchanged), though swiftly faded highs just ahead of the 100-period simple moving average. Downside momentum levelled off as we transitioned into US trading, aided by way of demand from 1.2375/1.2413 (located within the lower range of current H4 demand).
Any upside from current demand may be hindered at 1.2450, though a breach shines light on resistance at 1.2483 and the 1.25 handle.
Structures of Interest:
While H4 and H1 demand may tempt buying today, daily price eyeing demand at 1.2192/1.2361 is concerning and could force H1/H4 price to whipsaw through respective demands.
Tripping sell-stop liquidity under H1/H4 demands may fuel buyers off daily demand. Note the 61.8% Fib ret level on the H4 at 1.2360 also aligns with the upper boundary of daily demand.
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