US Dollar Index:
Mid-week movement witnessed the US dollar index, commonly referred to as the ‘DXY’, carve out a bottom a few points ahead of demand at 98.18/98.65 and finish the week 0.24% in the green. Technicians will also note the 200-day simple moving average (SMA) at 98.21 interacting with the underside of the aforementioned demand, along with a 61.8% Fib level residing a touch lower at 97.85.
As you can see, the week failed to maintain an upside presence north of 100.00, displaying two half-hearted back-to-back shooting star candlestick patterns. Therefore, the pendulum appears to be swinging towards more of a decline in early trade this week.
Yet, supply at 101.79/101.00, joined with a 127.2% Fib ext. at 101.75 and a 61.8% Fib retracement at 101.20, is still worthy of note in the event we turn higher.
The RSI, a momentum indicator measuring the scale of recent price changes, has circulated around the 50.00 value since the beginning of April, noting a high of 57.00 and low at 46.00.
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 and demand at 1.0488/1.0912.
The technical foundation has April rangebound between the two aforementioned price structures; notably, however, the current monthly candle is seen tunnelling into the upper boundary of 1.0488/1.0912.
The primary downtrend has remained in motion since 2008, exhibiting clear lower peaks and troughs.
Daily timeframe:
Partially altered from previous analysis –
The 78.6%/61.8% Fib zone at 1.0745/1.0830 (pink) remains a focal point on the daily timeframe, capping downside early April and again at the tail end of last week.
Last Wednesday’s high at 1.0990 may provide resistance this week, with a nudge above this point bringing on the 200-day simple moving average (SMA) at 1.1052. The inability to sustain upside out of 1.0745/1.0830, however, suggests demand at 1.0526/1.0638, an area extended from March 2017, may elbow its way back into the spotlight.
H4 timeframe:
Support at 1.0831 remains a dominant fixture on the H4 timeframe, closely linked with the top edge of the 78.6%/61.8% Fib zone at 1.0745/1.0830, based on the daily chart.
The path of least resistance, as of current price, appears to be northbound. Limited (obvious) supply is evident until crossing paths with 1.1044/1.0966, yet slipping beneath 1.0831 this week will expose a small demand area plotted at 1.0782/1.0807. Stepping south of here, nevertheless, may eventually see demand at 1.0602/1.0630 surface, drawn from April 2017.
H1 timeframe:
Heading into US hours Friday, just ahead of 1.08, Europe’s single currency found itself on the winning side of the table vs. the buck, paving its way through 1.0850 to highs at 1.0892. Things levelled off into the US afternoon session, however, leaving 1.09, and the nearby 100-period simple moving average (SMA) unchallenged.
With the RSI indicator poised to retest 50.00, an approach to 1.09 is possible, with a break likely seeing traders take aim at supply coming in from 1.0940/1.0920 which holds a 61.8% Fib retracement at 1.0922.
Structures of Interest:
Long term:
Monthly price is having a hard time printing anything of meaning out of demand at 1.0488/1.0912. It appears, from a technical perspective, the 78.6%/61.8% Fib zone at 1.0745/1.0830 on the daily timeframe is its last line of defence before attempting an approach toward its lower limit.
Short term:
H4 support at 1.0831 is in view, threatening the possibility we could explore higher ground in early trade this week. This could lead to a run above 1.09 on the H1 timeframe, potentially drawing in the 100-period SMA and supply at 1.0940/1.0920.
Despite monthly, daily and H4 timeframes showing supportive structure, a fakeout above 1.09 this week, one which tests the H1 supply at 1.0940/1.0920, could spark a wave of intraday selling, given buy-stop liquidity above 1.09.
Another possible scenario is a retest at 1.0850 on the H1, knowing where we’re coming from on the bigger picture, with 1.09 plotted an initial upside target.
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 advance so far, has 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 –
The Australian dollar broke down against its US counterpart Wednesday, snapping a seven-day winning streak a few points ahead of a 61.8% Fib level at 0.6449, accompanied closely by a trendline resistance (0.7031). Thursday failed to see much follow-through movement unfold, pencilling in a modest hammer candlestick formation off session lows at 0.6263 which led to a modest bid Friday.
It may be worth noting that a break above the said structures shines the spotlight on a nearby supply at 0.6618/0.6544, sited just south of a 161.8% Fib ext. level at 0.6642. To the downside, demand at 0.5926/0.6062 remains the next support target on this timeframe.
H4 timeframe:
Partially altered from previous analysis –
The harmonic Gartley formation, boasting its defining limit at the 78.6% Fib level from 0.6433, made its presence known Wednesday. Technicians will also note additional Fibonacci studies are present around this area in the form of a 127.2% Fib ext. level at 0.6421 and a 161.8% Fib ext. level at 0.6420.
Price action, despite Friday’s advance, continues to respect the harmonic Gartley pattern. As stated in previous analysis, where traders place their profit target using this formation is subjective. One method may entail reducing risk to breakeven once/if demand at 0.6192/0.6247 makes an entrance; others could hold for the 38.2% Fib retracement of legs A-D, standing within the lower boundary of demand from 0.6065/0.6106 at 0.6075.
H1 timeframe:
Technical developments on the H1 chart reveal the beginnings of an ascending channel from 0.6271/0.6383. Although the pair gathered momentum to the upside Friday, and appears to be establishing minor support off 0.6350, the 161.8% Fib ext. level at 0.6377 signifies resistance.
Northbound, we have 0.64 noted as another point of interest, with a violation of this level likely to see crosshairs transition to familiar supply at 0.6461/0.6435, which contains a 161.8% Fib ext. level at 0.6454.
Structures of Interest:
Long term:
Supply at 0.7029/0.6664 remains an obvious ceiling on the monthly timeframe to be aware of should we continue pursuing higher ground. Though before reaching this base, the noted daily resistances must be overthrown.
Short term:
In light of the recent pullback, testing 0.64 or H1 supply at 0.6461/0.6435 is an option this week. Given the current H4 Gartley pattern off 0.6433 and the 61.8% Fib retracement on the daily timeframe at 0.6449, this positions the H1 levels as possible reversal zones.
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.
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:
Leaving demand from 105.70/106.66 unopposed, USD/JPY seems to be in the process of forming a double-bottom support from 106.87 (black line). Although the 200-day simple moving average (SMA), currently circulating around 108.30, could hamper upside, pattern traders will still be watching/hoping for a break above the 109.38 April 6 high (red arrow) to confirm the double-bottom pattern. This potentially preps the ground for moves to 111.30ish based on the double-bottom’s take-profit target (usually measured from the lowest trough to the peak and then adding this value to the breakout point).
H4 timeframe:
Partially altered from previous analysis –
Demand at 106.75/107.22 remains a feature on the H4 timeframe, sited just ahead of daily demand underlined above at 105.70/106.66 and capping downside since the beginning of the month.
Interestingly, though, since the beginning of last week the candles have been compressing within what appears to be a bearish flag pattern between 106.92/107.86. A decisive move south will likely overwhelm buyers from H4 demand and potentially make a run for demand at 105.75/105.17.
H1 timeframe:
Price action on the H1 timeframe, overall, is seen rangebound between supply at 108.16/107.99 (holds 108 within) and demand coming in at 106.99/107.16 (holds 107 within). Inside the said consolidation, however, traders will acknowledge the 100-period simple moving average (SMA) at 107.54 and the 107.50 base along with trend line resistance (109.38).
Structures of Interest:
Long term:
Long-term direction is difficult right now. Monthly price could effectively pop either way, while daily price, although showing signs of a potential double-bottom pattern at 106.87, may be hindered by the 200-day SMA at 108.30.
Short term:
A decisive H4 close beneath the current bearish flag pattern (106.92/107.86) suggests we may be heading lower this week, though most traders will want to see H4 demand at 106.75/107.22 cleared before taking action. Do bear in mind, however, you will still be shorting into the current daily demand even with H4 demand taken out.
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 relevant in April, despite recent moves to said lows. Nearby resistance can be seen in the form of a trendline formation (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 –
Demand-turned supply at 1.2649/1.2799, an area that aligns with a 200-day simple moving average (SMA) at 1.2648, remains a dominant fixture to the upside on this timeframe.
Demand at 1.2509/1.2372 currently houses price as GBP/USD pencilled in a modest gain and snapped a two-day losing streak Friday. Dropping beneath the said demand shifts focus to 1.2212/1.2075.
H4 timeframe:
Partially altered from previous analysis –
Orders around supply at 1.2622/1.2517 remain fragile, following last Tuesday’s breach to a high of 1.2647. In spite of the recent pullback to lows at 1.2407, the break of 1.2622/1.2517 potentially builds a foundation to explore higher levels. Limited supply, according to chart studies, is evident on this timeframe until reaching 1.2854/1.2804, bringing with it a 78.6% Fib retracement level at 1.2809 (blue) and a 127.2% Fib ext. level at 1.2799.
H1 timeframe:
Supply at 1.2526/1.2510, an area that’s capped upside on three occasions in recent trade, made another showing at the tail end of Friday’s session, following a dominant run north of 1.24.
Located just above the 1.25 handle and mixing with the 100-period simple moving average (SMA) as well as being glued to the underside of H4 supply underlined above at 1.2622/1.2517, this positions the current H1 supply as a technically appealing base.
A run lower from supply has 1.2450 on the radar, whereas moves higher has the 1.2574 high offering possible resistance, with 1.26 following close by.
Structures of Interest:
Long term:
Monthly price is seen holding north of support at 1.1904/1.2235, alongside daily price displaying signs of strength from demand at 1.2509/1.2372.
Short term:
H1 supply at 1.2526/1.2510 may be on the watchlists for some traders today, hoping for another rejection. The concern, however, is that buying pressure from the monthly support area at 1.1904/1.2235 and daily demand at 1.2509/1.2372, alongside H4 supply at 1.2622/1.2517 echoing a fragile tone, may see higher prices unfold.
Friday’s high at 1.2522 is significant on the H1 timeframe (red arrow). A break above this base will (traditionally) confirm the H1 double-bottom support from 1.2408. The take-profit target, measured by taking the distance between the lowest trough and the corresponding peak (1.2408/1.2522) and adding this to the breakout point, shows price could potentially surpass 1.26 and test last Tuesday’s high at 1.2647 (black arrows), essentially drawing price action back to daily demand-turned supply at 1.2649/1.2799.
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