EUR/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
March, evident from the monthly chart, left behind a long-legged doji indecision candle, with its extremes crossing paths with heavyweight supply at 1.1857/1.1352 (intersects with a long-term trendline resistance [1.6038]) and demand at 1.0488/1.0912.
April spent the best part of the month feasting on the top edge of 1.0488/1.0912, squeezing out a Japanese hammer candlestick pattern, typically viewed as a bullish reversal signal. May, as you can see, is recovering off worst levels, on track to form another Japanese hammer candlestick pattern out of current demand.
With reference to the primary trend, price has exhibited clear lower peaks and troughs since 2008.
Daily timeframe:
Brought forward from previous analysis –
Pattern traders will note a large potential bearish pennant configuration on the daily timeframe, forming since late March between 1.1147/1.0635.
Mid-week watched price breach the upper border of the current pennant formation. Yet, after Thursday failed to deliver much follow through, missing the 200-day simple moving average at 1.1012 by a whisker, Friday wrapped up the week probing lows at 1.0885.
Given Monday’s lacklustre movement, the floor still appears free to test lower levels on this timeframe this week.
H4 timeframe:
Monday saw price flatline between supply at 1.0925/1.0897 and a 50.00% ret level support at 1.0890.
Breaching 1.0890 highlights fresh demand at 1.0799/1.0827, which, as you can see, crosses with trendline support (1.0635). Above 1.0925/1.0897, on the other hand, leads price up to a recognised supply from 1.1057/1.1013.
H1 timeframe:
With US and UK markets closing Monday, liquidity thinned across the board. Intraday flow did manage to dip through 1.09 in early Asia, though reclaimed lost ground in London ahead of demand at 1.0850/1.0866. Not only does the demand come with generous momentum out of the base, it is also considered a decision point to approach 1.09.
Above 1.09, traders face supply at 1.0936/1.0947 (prior demand), joined closely with a 100-period simple moving average at 1.0933.
Structures of Interest:
Conflict remains between higher-timeframe structures. Monthly price displays scope to cross into higher ground out of demand at 1.0488/1.0912, while daily price suggests moves back into the bearish pennant pattern’s frame.
Short term, 1.09 offers a feeble tone, unable to provide much in the way of support/resistance yesterday. With price testing the aforesaid round number, as we write, what way we break here is largely determined on the back of H4 direction out of the tight range formed between 1.0925/1.0897 and a 50.00% ret level at 1.0890.
AUD/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
April’s 370-pip advance has, as you can see, landed May within striking distance of supply fixed at 0.7029/0.6664, an area intersecting with a long-term trendline resistance (1.0582).
May is proving lacklustre, however, up 0.38% as of writing.
Regarding the market’s primary trend, a series of lower lows and lower highs has been present since mid-2011.
Daily timeframe:
Partially altered from previous analysis –
Supply at 0.6618/0.6544 remains in the fight, albeit holding on by a thread.
Circling the upper border, the 161.8% Fib ext. level resides at 0.6642, secured a handful of pips from the 200-day simple moving average seen around 0.6656.
H4 timeframe:
Last Wednesday witnessed a dip from channel resistance (0.6561), with latest action probing lows at 0.6505. Corresponding channel support (0.6378) resides around the 0.6430ish neighbourhood, though before reaching here, we have another layer of channel support to contend with (0.6253) around 0.6470ish.
In regards to technical zones, supply at 0.6695/0.6664 is on the hit list. Demand at 0.6356/0.6384 also offers a base of focus.
H1 timeframe:
The area between a 50.00% ret level at 0.6551 and a 38.2% Fib ret level at 0.6540 (yellow), an area containing the 0.6550 base and 100-period simple moving average at 0.6552, capped upside Monday.
Aside from local low points at 0.6519 and 0.6505, 0.65 offers possible support. To the upside, fresh supply is seen close by at 0.6572/0.6561, with a break clearing the pathway to 0.66.
Structures of Interest:
As stated in Monday’s weekly report, daily supply at 0.6618/0.6544 appears to be holding on by a thread, despite recent action pulling back. This unlocks the possibility of bringing in the nearby 161.8% Fib ext. level at 0.6642 and 200-day simple moving average at 0.6656, a dynamic value connecting closely with the underside of monthly supply at 0.6664.
Intraday, buy-stops above the Fib area on the H1 between 0.6551/0.6540 may help facilitate a dip from nearby H1 supply today at 0.6572/0.6561.
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 remains subdued, ranging between 108.08/105.98.
Areas outside of the noted pattern 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 –
Since registering a top from 109.38 at the beginning of April, USD/JPY moulded a falling wedge pattern, which had its upper limit breached on May 11 in strong fashion, boosted by demand at 105.70/106.66. The take-profit target out of the said pattern, traditionally measured by taking the value of the base and adding this to the breakout point (purple), sets an objective of around 109.30.
However, in order to reach the noted take-profit target, the 200-day simple moving average at 108.29 will need to be defeated.
H4 timeframe:
Structurally, supply at 108.10/107.79 remains present on the H4 timeframe, along with a local demand area at 107.21/107.41. A break of the latter advertises moves to support priced in from 106.91, whereas navigating waters above the aforesaid supply could lead to resistance at 108.53 making an appearance.
H1 timeframe:
Friday and Monday found a home under a trendline resistance (prior support – 106.85), despite price action crawling higher by the close. With reference to supply, active supply is limited to the left of current price until reaching 108, a level holding the pair lower since the middle of April. Lower on the curve, demand is not expected to emerge until reaching 107.15/107.23.
Structures of Interest:
Daily price displays room to approach the 200-day simple moving average at 108.29 and the falling wedge take-profit target of around 109.30.
H4 supply at 108.10/107.79 could hamper upside on the daily timeframe, with 108 and H1 trendline resistance offering particularly familiar intraday ceilings.
GBP/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Though under pressure, support at 1.1904/1.2235 remains in motion in May. Neighbouring resistance, should we see an attempt at recovery, can be found in the form of a trendline (1.7191). A violation of support, nevertheless, puts forward a 127.2% Fib ext. level at 1.1297.
Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008.
Daily timeframe:
Partially altered from previous analysis –
A few pips south of supply at 1.2649/1.2799 (prior demand), a double-top pattern formed at 1.2647, with May 13 consuming the neckline (April 21 1.2247) and establishing a potential take-profit target (purple) around 1.1855.
In light of the minor recovery off 1.2075, traders, particularly pattern traders, will note the double-top neckline at 1.2247 holds firm as resistance.
H4 timeframe:
Overall, price movement was incredibly thin Monday as a result of US and UK markets taking a back seat.
According to the H4 chart, price action has been grinding channel support (1.2642 – prior resistance) since topping last Tuesday at 1.2296. Supply at 1.2244/1.2209 also remains in the picture.
H1 timeframe:
Since early last week, H1 carved out a falling wedge pattern between 1.2287/1.2219, which, as you can see, recently had its upper boundary penetrated as price closed in on the apex. The take-profit target, measured by taking the base value and adding this to the breakout point (yellow), can be found at 1.2270, sited within the lower limits of supply at 1.2295/1.2266. However, in order to reach this far north, dethroning 1.22, along with local supply at 1.2220/1.2199 and the 100-period simple moving average at 1.2212, would be required.
Structures of Interest:
Conflict remains present on the bigger picture. Monthly price holds 1.1904/1.2235, despite positioned against the major trend. Sellers on the daily timeframe, though, appear to be taking charge around the underside of the daily double top neckline at 1.2247.
On the lower timeframes, particularly the H1 chart, we are likely to see traders make an attempt to push higher, as traders seek the H1 falling wedge take-profit target at 1.2270. Yet, whether buyers will be able to maintain a position faced with selling opposition out of H4 supply at 1.2244/1.2209 and daily sellers coming off 1.2247 is difficult to judge.
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