EUR/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
The month of February witnessed EUR/USD revisit the upper limit of demand at 1.0488/1.0912 – a noteworthy area given the momentum derived from its base – and pencil in an appealing (bullish) hammer candlestick pattern.
Upside this month manoeuvred the pair into demand-turned supply at 1.1857/1.1352. Leaving long-term trendline resistance (1.6038) unchallenged, the pair is on track to chalk up a shooting star bearish candlestick signal and revisit demand mentioned above at 1.0488/1.0912.
The primary downtrend remains in motion and has remained lower since 2008, exhibiting clear lower peaks and troughs.
Daily timeframe:
The 200-day SMA made an appearance yesterday, currently circulating around the 1.1100 neighbourhood, as did a familiar trend line support (1.0879), active since October 2019. Recently violated supply at 1.1323/1.1268 is in view to the upside, in the event further recovery emerges from the said support structures today. A violation to the downside, nonetheless, suggests scope towards demand plotted at 1.0680/1.0781.
What’s also notable from a technical perspective is the RSI indicator recently exiting overbought levels, fading peaks at 82.00, values not seen since March 2008, and poised to shake hands with the 50.00 value.
H4 timeframe:
Demand at 1.1038/1.1072 entered view yesterday after the market recorded lows of 1.1055, a few points ahead of a 61.8% Fib retracement at 1.1049. The demand itself is considered significant, given it was likely the decision point to break the 1.1095 January 31st high. Demand-turned supply at 1.1218/1.1245 also made an entrance yesterday, currently fading upside from the aforementioned demand.
Higher prices on this timeframe has supply at 1.1332/1.1298 in sight, whereas a turn lower underlines demand at 1.1005/1.0979.
H1 timeframe:
Intraday movement explored higher ground after the European Central Bank (ECB) stood pat on rates Thursday, passing through 1.1250 and testing 1.13. Things turned sour from here, nevertheless, eventually guiding the pair to lows south of 1.11 at 1.1055, likely running stops. The baton quickly changed hands from bears to bulls in early US trade, reclaiming 1.11+ status and retesting the underside of 1.12 into the close.
Structures of Interest:
With monthly price fading structure, as well as H4 price holding demand-turned supply at 1.1218/1.1245 and 1.12 welcoming a retest on the H1, moves lower could be in store. The problem arises when taking daily supports into account.
Traders still seeking short positions off 1.12 will likely target 1.11, followed by H4 demand at 1.1038/1.1072.
AUD/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Demand at 0.6358/0.6839 surrendered yesterday, after capping downside since 2016. Refreshing multi-year lows, demand at 0.6094/0.5866 is next in the firing range, an area formed back in 2003 that held price higher in late 2008.
The primary trend in this market continues to face a southerly trajectory.
Daily timeframe:
AUD/USD powered into demand at 0.6330/0.6245 Thursday, clipping its lower boundary and likely filling a portion of sell stops, both from traders attempting to fade the demand and those anticipating the breakout. Sustained downside from this point may shine the spotlight on demand coming in at 0.5926/0.6062.
The RSI also recently re-entered its oversold range, currently trading around 26.40.
H4 timeframe:
The 161.8% Fib ext. level at 0.6241 elbowed its way into the spotlight Thursday and, in recent hours, staged a half-hearted recovery, stationed beneath resistance at 0.6314, Monday’s low.
H1 timeframe:
Weighed by robust USD gains, the Australian dollar extended its slide Thursday, clocking lows a few points ahead of the 0.62 handle and retesting 0.63 as resistance. 0.63 happens to link closely with channel support-turned resistance (0.6462).
Structures of Interest:
Monthly price shifting focus to demand at 0.6094/0.5866, after taking out the lower edge of demand at 0.6358/0.6839, daily price toying with the lower edge of demand at 0.6330/0.6245, H4 price failing to sustain gains past 0.6314 and H1 action retesting the underside of 0.63/channel resistance, could be enough to entice sellers into this market today and push for a run to 0.62.
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 (118.66/104.62). February had price elbow a touch outside the upper boundary of the aforementioned descending triangle to 112.22, though retreated lower and produced a shooting star pattern into February’s end.
March, so far, breached the lower edge of the descending triangle, yet has recovered in reasonably strong fashion, leaving nearby demand at 96.41/100.81 unchallenged.
Daily timeframe:
Partially altered from previous analysis –
Monday’s near-300-point decline dipped through a number of key technical supports and landed within demand fixed from 100.68/101.85 (an area glued to the top edge of monthly demand underscored above at 96.41/100.81).
Tuesday chalked up a sizable counterattack, reclaiming all of Monday’s losses and retesting demand-turned supply at 105.57/106.17, along with joining 38.2% Fib retracement at 105.39. Wednesday pencilled in a bearish position off the said zone, with Thursday pouring cold water on hopes of a down move, forming a long-legged doji indecision candle. In the event we pop higher today, keep an eye on supply-turned demand at 106.60/107.09.
H4 timeframe:
Supply at 105.75/105.17, although having its upper boundary tested a number of times, remains a reasonably dominant fixture on this timeframe. The recent pullback from the said zone to lows at 103.08 produced what appears to be the C-leg of an AB=CD bearish pattern. Should further buying be seen, the AB=CD termination point is seen within supply at 108.15/107.64.
H1 timeframe:
Although global equities experienced punishing selloffs Thursday, USD/JPY concluded pretty much unmoved. Technically, we settled south of 105, currently consolidating within a narrow range ahead of Asia today. 104 appears to be calling for attention, surrounding itself with H4 confluence in the shape of a channel support (101.18) and a smaller, more local, trendline resistance-turned support (105.33).
Structures of Interest:
Monthly price suggests buyers might now have the upper hand after regaining a foothold within its descending triangle. Contrary to this, daily price fades a demand-turned supply zone at 105.57/106.17.
In line with daily structure, H4 movement continues to defend supply at 105.75/105.17. H1, however, highlights a particularly interesting point of support around the 104 handle, marked in green, where additional points of support converge.
GBP/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Early February 2018 saw the pair reject 1.4520/1.3893, a 50.0% retracement and 38.2% Fib retracement combination (red). This, along with trendline resistance (2.1161), remains a well-rounded resistance area to keep an eye on long term.
In recent months, a recovery formed off 1.1904/1.2235, clocking highs of 1.3514 in December 2019 and breaking the 1.3380 March 2019 high. The month of February declined nearly 3.00%, with March currently extending losses, poised to reconnect with 1.1904/1.2235.
Daily timeframe:
Demand at 1.2649/1.2799 and the 200-day SMA gave way Thursday in strong fashion, shedding nearly 2.00%. A 127.2% Fib ext. point at 1.2509 nudged into view, located a few points above another layer of demand at 1.2404/1.2470.
In terms of the RSI indicator, we can see the value dipped through 50.00 and is headed for oversold territory.
H4 timeframe:
After tunnelling through a number of key demand areas, H4 price hovers above daily demand mentioned at 1.2404/1.2470. To the upside, however, we can see a demand-turned supply at 1.2696/1.2602, with a break exposing notable supply at 1.2768/1.2813.
H1 timeframe:
1.25 made an appearance in the early hours of US trade Thursday, providing fresh impetus to GBP/USD. Failing to sustain gains north of 1.26, the pair once again found itself under significant pressure, with 1.25 likely to be retested today. With the possibility of a break lower being seen, traders may want to note demand at 1.2405/1.2460, essentially offering pretty much the same range as daily demand mentioned above at 1.2404/1.2470.
Additional resistance seen on this timeframe is channel support-turned resistance (1.2865). Also worthy of note is the RSI attempting to regain footing within oversold levels and the 100-period SMA drifting south.
Structures of Interest:
Daily demand at 1.2404/1.2470, along with H1 demand at 1.2405/1.2460, and RSI indicators on both daily and H1 timeframes showing oversold conditions, opens the door to a possible fakeout scenario. A whipsaw through 1.25 today would likely fill sell stops (providing liquidity to buy into) and draw in buyers from the said demand areas. This, coupled with a H1 close back above 1.25 today, might be sufficient enough to encourage an approach to 1.26.
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.
Access 10,000+ financial instruments