Weekly Technical Market Insight: 15th – 19th November 2021

Weekly Technical Market Insight: 15th – 19th November 2021, FP Markets

Charts: Trading View

US Dollar Index (Daily Timeframe):

(Italics: previous analysis)

Dollar bulls entered an offensive phase last week, rising 1.0 percent and refreshing year-to-date peaks, according to the US dollar index—measures USD value against a basket of six international currencies.

Wednesday’s near-full-bodied ascent (0.9 percent) toppled resistance at 94.65, movement unmasking resistance at 95.86 and perhaps setting the technical stage for further outperformance over the coming weeks. Fibonacci enthusiasts will note the 100% Fibonacci projection at 95.94 sharing chart space with 95.86, together with a 50.00% retracement (green) at 96.10, a 200% Fibonacci extension at 95.80 and a 1.618% Fibonacci projection from 96.37.

Also underpinning the upbeat outlook is current trend: established through a series of higher highs and higher lows since price made contact with support from 89.69 in May.

In terms of the relative strength index (RSI), momentum has continued to increase after forming an advance out of familiar support between 40.00 and 50.00. Technicians familiar with the aforementioned indicator will acknowledge support often develops around this region in trending environments. Maintaining position north of 50.00, therefore, may be interpreted as a sign of strength until connecting with overbought space.

  • Dip-buying strategies are likely to observe resistance-turned support at 94.65 closely this week, targeting resistance between 96.37 and 95.80.

Weekly Technical Market Insight: 15th – 19th November 2021, FP Markets

EUR/USD:

(Italics: previous analysis)

Weekly timeframe:

Down 1.1 percent on the week, prime support at $1.1473-1.1583 had its lower wall clipped. As a result, further selling could materialise, targeting a 61.8% Fibonacci retracement at $1.1281 as well as a 1.618% Fibonacci projection from $1.1237. Harmonic traders may acknowledge the 1.618% ratio represents an ‘alternate AB=CD bullish pattern’.

This, coupled with the possibility of additional USD outperformance (see above), and recognising EUR/USD price took out 2nd November low (2020) at $1.1603, suggests the currency pair is transitioning to a downtrend.

Daily timeframe:

Meanwhile, buyers and sellers remain squaring off within the walls of Fibonacci support from $1.1420-1.1460 (comprises a 78.6% Fibonacci retracement and a 1.272% Fibonacci projection) on the daily scale.

Noted support appears vulnerable to the downside, according to the weekly timeframe’s technical position. A decisive move lower this week unlocks Quasimodo support from $1.1213, arranged a handful of pips south of the weekly timeframe’s Fibonacci structure. In the event buyers regain consciousness, trendline resistance, taken from the high $1.2254, is in range, shadowed by Quasimodo support-turned resistance at $1.1689.

Immediate flow has been trending lower since late May tops at $1.2266. Also confirming downside is the relative strength index (RSI) accepting the 50.00 centreline as indicator resistance since late October. This tells traders momentum is lower (average losses exceeding average gains) and might continue until shaking hands with oversold territory.

H4 timeframe:

Friday echoed a subdued tone, buoyed by Quasimodo support at $1.1438—joined by a 1.618% Fibonacci expansion at $1.1441, a 1.618% Fibonacci projection coming in from $1.1444 and a 100% Fibonacci projection from $1.1431.

Resistance at $1.1495 demands attention to the upside; navigating lower levels this week, nonetheless, directs the technical spotlight to a narrow Quasimodo support priced in at $1.1380.

Continuation moves below current H4 support also tips the weight in favour of daily price engulfing its Fibonacci support this week.

H1 timeframe:

Technical structure is somewhat limited.

Local support at $1.1438 has functioned effectively in recent candles, aided by the relative strength index (RSI) pencilling in clear bullish divergence (positive momentum: average gains beginning to exceed average losses). Resistance can be found at $1.1467, with a break unmasking the $1.15 figure. Downstream, chart studies indicate a clear run to $1.14.

Observed Technical Levels:

Long term:

Buyers losing flavour at weekly prime support from $1.1473-1.1583 communicates a bearish shade this week, placing a question mark on daily Fibonacci support from $1.1420-1.1460.

South of daily support throws light on the weekly timeframe’s Fibonacci structure at $1.1281 and $1.1237.

Short term:

An absence of buying interest from H4 support between $1.1431 and $1.1444 underlines the possibility of fragile support on the H1 timeframe from $1.1438. With this, a test of H1 resistance at $1.1467 may be enough to pull in additional selling towards at least $1.14.

Weekly Technical Market Insight: 15th – 19th November 2021, FP Markets

AUD/USD:

(Italics: previous analysis)

Weekly timeframe:

Resistance at $0.7501 proved notable, slotted just under prime resistance from $0.7849-0.7599. Notching up back-to-back weekly bearish candles reignites prime support at $0.6968-0.7242 this week, with subsequent interest below shifting focus to support at $0.6673.

Despite current resistance, trend studies show we’ve been higher since early 2020.

Daily timeframe:

Following an early November slide from resistance between $0.7621 and $0.7551, an area housing a 61.8% Fibonacci retracement and a 100% Fibonacci projection, the week ended on the doorstep of a 61.8% Fibonacci retracement at $0.7271 (sheltering Quasimodo support at $0.7220).

The trend on this timeframe, however, remains in line with weekly movement: favours upside following the break of 3rd September high at $0.7478.

Dip-buyers could emerge between $0.7220 and $0.7271 this week.

H4 timeframe:

Early Friday logged a bottom at $0.7277—leaving Quasimodo support at $0.7250 unchallenged—and staged an impressive recovery to resistance at $0.7332 (a prior Quasimodo support level). Trendline resistance, drawn from the high $0.7532, catches the eye higher up, closely shadowed by Quasimodo resistance at $0.7380 and a 38.2% Fibonacci retracement at $0.7384.

H1 timeframe:

Shaking hands with Quasimodo support from $0.7280 early Friday, buyers, boosted by bullish divergence out of the relative strength index (RSI), subsequently overrun $0.73 and shifted attention towards a 1.618% Fibonacci projection at $0.7341, a resistance level at $0.7349, a 61.8% Fibonacci retracement also at $0.7349 and a 50.00% retracement at $0.7355.

RSI followers will also acknowledge the indicator’s value moved through the 50.00 centreline and trendline resistance, taken from the high 68.66, to register overbought conditions.

Observed Technical Levels:

Long term:

Despite Friday’s bullish showing, scope to pop lower remains in this market until we challenge the daily timeframe’s support between $0.7220 and $0.7271.

Short term:

In conjunction with higher timeframe direction, a test of H1 resistance between $0.7355 and $0.7341 may serve as a platform for sellers this week, helped by RSI overbought conditions.

As for support targets, $0.73 on the H1 calls for attention, followed by Quasimodo support from $0.7280 and the upper edge of daily support at $0.7271.

Weekly Technical Market Insight: 15th – 19th November 2021, FP Markets

USD/JPY:

(Italics: previous analysis)

Weekly timeframe:

Mid-October had candles embrace resistance from ¥114.38 and touch a fresh three-year peak of ¥114.70. Since then, we’ve seen a back and forth between bids and offers and established what appears to be a bullish flag between ¥114.70 and ¥113.41.

Should resistance step aside, traders are urged to pencil in the 1.272% Fibonacci projection from ¥116.09. Further selling, on the other hand, sets the stage for bringing in support at ¥112.16.

In terms of trend, the unit has been advancing since the beginning of this year.

Daily timeframe:

Resistance between ¥114.94 and ¥114.61 is back in the line of fire (Fibonacci ratios), thanks to a spirited mid-week advance. However, do note Friday generated a modest bearish outside reversal (similar formation to a bearish engulfing, though requires entire range to be engulfed).

Lower on the curve, attention remains on supply-turned demand at ¥112.66-112.07 and a 38.2% Fibonacci retracement at ¥112.57.

RSI (relative strength index) analysis reveals the value rebounded from support between 40.00 and 50.00, with range to climb until reaching overbought. Note that amid prolonged uptrends, indicator support often forms around the 50.00 area and operates as a ‘temporary’ oversold base, as has been the case since May.

H4 timeframe:

Interestingly, on the H4 chart, limited resistance is visible until the Quasimodo formation at ¥114.46, suggesting weekly price is likely to welcome resistance at ¥114.38 this week.

To the downside, a newly formed decision point at ¥112.78-112.96 is on the radar, with a break exposing support from ¥112.63.

H1 timeframe:

Support at ¥113.82 provided an efficient floor since Wednesday, withstanding numerous downside attempts.

Friday greeted another test, though for the first time since the aforementioned support was born, the ¥114 figure shows signs of establishing resistance.

Looking forward, a short-term sell-off emphasises additional layers of support at ¥113.50 and ¥113.67, accompanied by a neighbouring decision point at ¥113.14-113.24.

Underpinning bearish forces, the relative strength index (RSI) submerged the 50.00 centreline, action informing traders that average losses on this timeframe exceed average gains. Oversold territory this week?

Observed Technical Levels:

Long term:

Weekly resistance at ¥114.38 is a key level this week, together with daily resistance between ¥114.94 and ¥114.61 (Fibonacci ratios).

The weekly timeframe’s bullish flag is also interesting; still, buyers face considerable resistance before that’s brought to life (see above).

Short term:

Having seen ¥114 display signs of bearish intent, a dip beneath H1 support at ¥113.82 to address H1 supports at ¥113.67 and ¥113.50 is in the wind early week.

Joined by an RSI oversold/divergence signal, the said supports could draw in a bullish reaction.

Weekly Technical Market Insight: 15th – 19th November 2021, FP Markets

GBP/USD:

(Italics: previous analysis)

Weekly timeframe:

Supply-turned demand at $1.3629-1.3456 surrendered position last week, following a third consecutive weekly decline in the red.  Month to date, November is down 2.0 percent. Couple this with price closing under a double-top pattern’s ($1.4241) neckline at $1.3669 in August, the weekly chart reflects a bearish outlook.   

The double-top pattern’s profit objective—measured by taking the distance between the highest peak to the neckline and extending this value lower from the breakout point—delivers a downside target around $1.3093.

Daily timeframe:

Sterling fell to fresh 2021 troughs against its US counterpart at the tail end of the week, fuelled by a mid-week plunge through support at $1.3449 (-1.10 percent).

$1.3449 delivers potential resistance this week, with Fibonacci support in view between $1.3262 and $1.3337.

The relative strength index (RSI) continues to emphasise resistance between 60.00 and 50.00 (since August); the indicator’s value, as you can see, is now within striking distance of the 30.00 oversold threshold, a level that’s provided equally impressive support since mid-June.

With respect to trend on the daily scale, the unit has been lower since June.

H4 timeframe:

Leaving a Fibonacci combination untouched (a 100% Fibonacci projection at $1.3333 and a 1.618% Fibonacci extension at $1.3311, which happens to reside within daily Fibonacci support mentioned above) Friday framed a bottom at $1.3353 and finished on the front foot.

With Friday’s pullback clearly against the tide, resistance between $1.3472 and $1.3447 as well as trendline resistance, taken from the high $1.3800, may develop in the days ahead (green).

H1 timeframe:

Quasimodo support from $1.3363 was thrown into the limelight Friday. Reinforced by the relative strength index (RSI) developing bullish divergence (action demonstrating downside momentum is in the process of slowing), buyers muscled through $1.34 and ‘confirmed’ short-term sentiment to the upside.

Should $1.34 assume supportive structure, H4 resistance at $1.3472 is in the air, a level taking shelter beneath $1.35.

With reference to the relative strength index (RSI), following earlier bullish divergence, the indicator pushed through the 50.00 centreline and is on the verge of drawing an overbought signal.

Observed Technical Levels:                            

Long term:

The weekly timeframe shows scope to approach the $1.31ish range after closing under supply-turned demand at $1.3629-1.3456.

The daily timeframe’s Fibonacci support between $1.3262 and $1.3337, however, is recognised as an immediate downside objective on the higher timeframes.

Short term:

Knowing higher timeframe flow points lower, H4 resistance between $1.3472 and $1.3447 may be a location sellers make a show from this week. Having said this, the H1 timeframe shows a spike into $1.35 before sellers take the wheel is a possibility.

Weekly Technical Market Insight: 15th – 19th November 2021, FP Markets

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.




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