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 demand-turned supply at 1.1857/1.1352 (intersects with a long-term trendline resistance [0.6038]) and demand at 1.0488/1.0912.
April, as you can see, spent the best part of the month feasting on the top edge of 1.0488/1.0912, though did manage to squeeze out a Japanese hammer candlestick pattern, viewed as a bullish reversal candlestick signal.
With reference to the primary trend, price has exhibited clear lower peaks and troughs since 2008.
Daily timeframe:
Partially altered from previous analysis –
Friday, as you can see, nudged through the April 15 high at 1.0990, unmasking the 200-day simple moving average (SMA) at 1.1034. Areas of relevance beyond the noted structures can be seen at the March 27 high from 1.1147 and supply at 1.1239/1.1179.
Leaving the said SMA value unchallenged, however, EUR/USD twisted lower Monday and wiped more than 70 pips into the close. This positions the 78.6% Fib level at 1.0745 back in the frame, with a break here underscoring demand at 1.0526/1.0638, an area extended from March 2017.
H4 timeframe:
Partially altered from previous analysis –
Friday unearthed a reasonably well-presented Japanese shooting star candlestick pattern, viewed as a bearish reversal signal. Interestingly, the pattern formed off the lower boundary of supply at 1.1057/1.1013, joined with a trendline support-turned resistance (1.0635), a 61.8% Fib level at 1.0989 and a Fib ext. level from 1.0987.
As shown on the chart, price action had little trouble pressing lower Monday, reaching 1.0906/1.0878, a supply-turned demand area. Ongoing downside from this angle would absorb bids from current demand and shift focus in the direction of a trendline resistance-turned support (1.1147).
H1 timeframe:
As the US dollar index put in a stronger-than-expected recovery from daily demand at 98.18/98.65, EUR/USD found itself under pressure Monday. Intraday flow toppled 1.0950, swiftly retested the base as resistance and subsequently made its way towards 1.09. Residing close by is the 100-period simple moving average (SMA) at 1.0908 and a trendline support (1.0727). Beyond this region we also have demand plotted at 1.0842/1.0857, which happens to intersect with 1.0850.
Structures of Interest:
1.09 on the H1 timeframe could firm out today, largely as a result of H4 demand at 1.0906/1.0878, monthly demand at 1.0488/1.0912 and additional support in the form of a H1 trendline. A H1 close above the 100-period SMA would help confirm interest from buyers and may pull for at least the 1.0950 base.
AUD/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Overwhelmed by the effects of the coronavirus pandemic, the month of March scored seventeen-year lows at 0.5506 ahead of demand pencilled in from 0.5219/0.5426, before staging an impressive recovery.
The recovery move, alongside April’s 370-pip advance, landed the unit within striking distance of supply fixed at 0.7029/0.6664, intersecting with a long-term trendline resistance (1.0582).
With reference to the market’s primary trend, a downtrend has been present since mid-2011.
Daily timeframe:
Partially altered from previous analysis –
Supply from 0.6618/0.6544 remains a dominant feature in this market. It should also be emphasised this area comes with a 127.2% Fib ext. level at 0.6578 and a nearby 161.8% Fib ext. level at 0.6642.
Thursday, as you can see, fashioned a bearish rotation candle out of the current supply, snapping a six-day winning streak, with Friday extending losses by nearly 100 pips. Monday, on the other hand, failed to follow-through, producing a Japanese hammer candlestick pattern off lows at 0.6372, regarded as a bullish reversal signal.
April 21 low at 0.6253 is seen as the next possible support band on this chart; breaking lower, nonetheless, shows demand at 0.5926/0.6062 may come under attack.
H4 timeframe:
Partially altered from previous analysis –
The harmonic Gartley formation, boasting a defining limit at the 78.6% Fib level from 0.6433, remains a focal point on the H4 timeframe. At the tail end of the week, fuelled (technically) on the back of selling from the current daily supply, price action leapt beneath H4 demand at 0.6432/0.6462.
Demand at 0.6356/0.6384 held firm in recent action, leading to a retest at the underside of 0.6432/0.6462.
Overall, the said harmonic pattern is still in motion and remains valid until breaking the X point at 0.6684.
H1 timeframe:
Despite early movement tunnelling through 0.64, price staged a modest intraday recovery off session lows at 0.6372 and formed what appears to be a bearish flag pattern, a popular formation to determine trend continuation that typically offers attractive risk/reward. Another constructive development is the H1 candles are seen grinding the underside of a trendline resistance (0.6253).
Structures of Interest:
Monthly supply at 0.7029/0.6664 remains a point of interest to the upside, though in order to reach this far north traders must first contend with the noted daily resistances.
With respect to short-term movement, should we break the lower edge of the current H1 bearish flag pattern, preferably engulfing 0.64 in the process as well, this could offer lucrative risk/reward on moves lower. The take-profit is generally measured by way of the preceding move (large black arrow) and added to the pattern’s breakout point. Protective stop-loss orders tend to be positioned above the upper boundary of the flag pattern.
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.
Areas outside of the noted pattern can be seen at supply from 126.10/122.66 and a demand coming in at 96.41/100.81.
Daily timeframe:
Brought forward from previous analysis –
Demand from 105.70/106.66 received price action last week after consolidating south of the 200-day simple moving average (SMA) at 108.28 since mid-April.
Thursday, as you can see, staged an impressive comeback from the aforesaid demand, snapping a six-day losing streak, though Friday fell flat with price action revisiting the said demand. Should the demand eventually abandon its position, we can look forward to demand plotted at 100.68/101.85 perhaps making an appearance.
H4 timeframe:
Partially altered from previous analysis –
A bearish pennant pattern between 106.92/108.07 took hold after having its lower boundary taken in recent weeks. Despite a modest recovery on Thursday last week, downside remains the favoured route, according to chart studies.
Traditionally, take-profit targets out of bearish pennant patterns are formed by measuring the preceding move (109.38-106.92) and adding this value to the breakout point (black arrows – 104.89).
Technical traders may also find use in noting the possibility of an AB=CD approach (orange), which completes at the top edge of H4 demand at 105.75/105.17, an area sited just above the bearish pennant’s take-profit target.
H1 timeframe:
Although we saw a fleeting move to 107 and surrounding supply at 106.99/107.16, enthusiasm was somewhat muted Monday.
Support can be found at the 106.50 band, while a run through 106.99/107.16 could see trendline resistance (108.04) make a show, along with supply formed at 107.40/107.29.
Structures of Interest:
As stated in Monday’s analysis:
Price action on the monthly timeframe could essentially pop either way. The response out of daily demand at 105.70/106.66, however, echoes a fragile tone, therefore 100.68/101.85 could be brought to light in the near future.
H4 price shows scope to navigate lower ground, possibly voyaging to demand at 105.75/105.17, followed by the bearish pennant take-profit target at 104.89. H1 flow could remain under 107, approaching 106.50 and beyond; alternatively, a break to supply at 107.40/107.29 may also draw sellers into the fight.
GBP/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Although March clocked levels not seen since the 1980s, ahead of a 127.2% Fib ext. level at 1.1297, price staged an impressive recovery and regained approximately 80% of the month’s losses.
Support at 1.1904/1.2235 remains in play in early May. Neighbouring resistance can be seen in the form of a trendline (1.7191).
Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008.
Daily timeframe:
Partially altered from previous analysis –
Upside momentum diminished into the week’s close as the pair crossed paths with the 200-day simple moving average (SMA) at 1.2644, a value that boasts a close connection to a demand-turned supply at 1.2649/1.2799. Monday’s action was somewhat tepid, though did extend losses by 0.30%.
Further selling could lead to demand at 1.2212/1.2075 entering play, whereas moves higher may whipsaw to supply at 1.3021/1.2844.
H4 timeframe:
Resistance at 1.2624 has contained upside since mid-March, with Friday fading the base and reaching lows at 1.2482.
Demand at 1.2399/1.2453 entered play Monday and is, for the time being, holding ground. Resistance, however, is seen reasonably close by at 1.2520. Demand failure could see another layer of demand enter sight at 1.2297/1.2350.
H1 timeframe:
Technical action on the H1 timeframe was (and still is) largely governed by trendline structures Monday. Early London witnessed trendline resistance (1.2298) cap upside, guiding the pair sub 1.2450 to trendline support (1.2247), a line sited a few pips north of the 1.24 handle.
As we write, price action is attempting to reclaim 1.2450+ status, unmasking the possibility of an approach to the aforesaid trendline resistance and a 100-period simple moving average (SMA), currently circulating around 1.2484. In addition, the RSI also recently crossed above its 50.00 point, representing a bullish vibe on this timeframe.
Structures of Interest:
Exiting H4 demand at 1.2399/1.2453, while H1 price is seen attempting to absorb offers around 1.2450, is a sign buyers may be in the driving seat right now. Therefore, breakout buying might be an option for some traders above 1.2450.
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