US Dollar Index:
Down 3.57%, the US dollar index, or ‘DXY’, witnessed an unwinding of long positions last week south of multi-year highs a touch off the 103.00 handle.
Bolstered by clear-cut RSI bearish divergence, supply-turned demand at 101.79/101.00 broke down, as did supply-turned demand at 100.03/99.37, exposing the 200-day SMA, currently circulating nearby the 98.00 handle at 97.98.
Sustained selling past the said SMA value this week may see downside unshackled towards a demand base marked at 96.88/96.60, with subsequent moves potentially eyeing demand at 96.00/95.63.
EUR/USD:
Monthly timeframe: (Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
In the early stages of March, price manoeuvred EUR/USD into a heavyweight demand-turned supply zone at 1.1857/1.1352. Leaving long-term trendline resistance (1.6038) unopposed, the pair reversed gains and burrowed into demand at 1.0488/1.0912.
The recent recovery, nevertheless, reclaimed monthly losses, and concluded the week in the mould of a long-legged doji indecision monthly candle. So, to a degree, we’re now rangebound between the two aforementioned price structures.
The primary downtrend remains in motion, trading lower since 2008, exhibiting clear lower peaks and troughs.
Daily timeframe:
After crossing paths with demand at 1.0526/1.0638, formed by way of two back-to-back doji indecision candles, EUR/USD pencilled in one-way traffic to the upside last week. Four reasonably dominant bullish candles unfolded, overthrowing supply at 1.0925/1.0864 and, in the later stages of the week, a supply zone parked at 1.1120/1.1076 which intersects with a 200-day SMA value, currently circulating around 1.1082.
Any upside in the euro this week faces nearby supply derived from 1.1239/1.1179, that merges closely with a trendline formation (1.0879), with moves higher underlining familiar supply at 1.1323/1.1268.
H4 timeframe:
Demand-turned supply at 1.1038/1.1074 came under fire Friday, shining the spotlight on a possible 5-3-5-3-5 Elliot Wave sequence from 1.0636, with a possible termination point at demand-turned supply drawn from 1.1218/1.1245. We’re going on the basis when wave 3 of an impulse wave is extended, wave 5 tends to equal in size to wave 1. Note 1.1218/1.1245 is also glued to the top edge of daily supply priced in at 1.1239/1.1179.
H1 timeframe:
Based on renewed downside in the US dollar index from 99.81, shaped by a H1 gravestone doji candlestick formation, EUR/USD H1 movement, in the form of a hammer candlestick pattern, bottomed off lows at 1.0953.
US hours Friday observed a near-150-point run above the key figure 1.10 and the 1.11 base to highs just short of 1.1150 and channel resistance (1.1086). A supply at 1.1255/1.1198 is visible, in the event we pop higher, which holds 1.12 within and encloses H4 demand-turned supply 1.1218/1.1245.
Interestingly, with reference to the RSI indicator, we are seeing price test the underside of overbought terrain, producing bearish divergence.
Structures of Interest:
Long term:
Direction on the monthly timeframe is considered range bound between demand at 1.0488/1.0912 and a supply-turned demand at 1.1857/1.1352. Right now, we’re meandering mid-way between these two zones. Daily price, on the other hand, suggests we’re headed to supply at 1.1239/1.1179.
Short term:
H4 demand-turned supply at 1.1218/1.1245 comes with a possible wave 5 termination. It is also stationed around the upper boundary of daily supply at 1.1239/1.1179 and encapsulated within H1 supply at 1.1255/1.1198.
On account of the above, price could make a run for H1 supply at 1.1255/1.1198 this week, which, given the notable convergence around this neighbourhood, is an area active sellers may make an appearance and head for 1.1120 (top edge of daily supply-turned demand) and the 1.11 handle on the H1.
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, March scored seventeen-year lows at 0.5506 ahead of demand pencilled in from 0.5219/0.5426. The move also whipsawed through the 0.6006 October 1st low (2008).
Recent action, however, chalked up an impressive recovery, reclaiming more than 80% of March’s losses, consequently drawing the pair to 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:
Demand-turned supply at 0.5926/0.6062 yielded Friday, with price recording its sixth successive daily advance.
Structurally, the break higher has free reign to approach a demand-turned supply at 0.6330/0.6245 this week, which holds a 50.0% retracement band at 0.6271.
With reference to the RSI indicator, the value is seen making headway north of 30.00, though has yet to challenge 50.00.
H4 timeframe:
Supply at 0.6147/0.6078 made a showing Friday, albeit delivering little, before exploring higher ground. As you can see, trendline support (0.5506) was left unchallenged.
Immersing the aforementioned zone has perhaps laid the foundation for a climb to 0.6314/0.6235, an area comprised of a support-turned resistance at 0.6314, a 161.8% Fib ext. level at 0.6273 and a 61.8% Fib retracement at 0.6235 (yellow).
H1 timeframe:
Despite a mild slump amid London on Friday, the US session latched onto a firm bid, leaping back above 0.61 and journeying towards 0.62. Price marginally pared gains into the close off the latter, emphasising a retest at 0.61 could be in store this week, with the possibility of a whipsaw to demand at 0.6034/0.6087. Also note, we have the 100-period SMA closing in on the said demand after recently turning higher. It may also be of interest that we’re producing bearish RSI divergence.
Headspace above 0.62 this week reveals room to approach 0.63, enclosed by a supply zone drawn in at 0.6325/0.6275.
Structures of Interest
Long term:
It’s likely daily demand-turned supply at 0.6330/0.6245 will make a showing this week. Though traders are urged to pencil in the possibility of a retest forming at 0.5926/0.6062 before rising to higher ground.
Short term:
H1 supply at 0.6325/0.6275 inhabits the daily demand-turned supply at 0.6330/0.6245 and grips the upper boundary of the current H4 resistance zone between 0.6314/0.6235.
Therefore, the said H1 supply is likely to pack a punch if tested this week.
In the event of a further rejection off 0.62, 0.61 is feasible intraday support, though echoes the possibility of a fakeout play into H1 demand coming in from 0.6034/0.6087. Do bear this in mind if considering bullish themes off 0.61.
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).
March breached the lower edge of the descending triangle, yet has recovered in strong fashion, leaving nearby demand at 96.41/100.81 unchallenged. Note current action also faded the descending triangle’s upper boundary, with the month now trading in neutral territory by way of a long-legged doji candlestick pattern.
In the event of a breakout higher, traders’ crosshairs will likely be fixed on long-term supply at 126.10/122.66.
Daily timeframe:
Buyers lost grip amid the later stages of last week, after earlier action chalked up back-to-back indecision candlestick patterns ahead of supply at 112.64/112.10.
Thursday put in a dominant bearish candle, filling a large portion of its body, with Friday following suit and taking hold of the 200-day SMA value, currently circulating around the 108.30 region.
Beyond the noted SMA, price is tipped to soften towards demand posted at 105.70/106.66.
H4 timeframe:
Technicians will note the ascending triangle formation (black lines 111.47/109.33) had price break to the downside in early trade Thursday which dethroned channel support (101.18).
As stated in Friday’s analysis, active buying is unlikely to emerge on this timeframe until crossing paths with the 38.2% Fib retracement at 107.66. Beneath here, the supply-turned demand base at 105.75/105.17 is the next obvious platform on the radar.
H1 timeframe:
As US traders made an appearance Friday, in line with the US dollar index plunging from peaks of 99.81, USD/JPY tumbled south from 109, enclosed within a demand-turned supply at 108.84/109.23.
Aside from potential support developing off the 38.2% Fib retracement at 107.66, based on the H4 timeframe, the recent break of 108 to the downside provides a foundation for a run to H1 demand at 107.07/107.34 and the 107 handle.
Structures of Interest:
Long term:
With the 200-SMA under fire at 108.30, and monthly price offering a somewhat indecisive tone within its descending triangle formation, sellers appear to have the upper hand with eyes on demand at 105.70/106.66 this week.
Short term:
With longer-term flow echoing a bearish vibe, bearish intraday scenarios might be an idea off the underside of 108. H1 demand at 107.07/107.34 is likely next in the firing range as support, with subsequent moves lower targeting 107 and then the top edge of daily demand at 106.66.
GBP/USD:
Monthly timeframe: (Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Bottoming at lows not seen since the 1980s, ahead of a 127.2% Fib ext. level at 1.1297, March’s candle is staging an impressive recovery and has regained approximately 80% of the month’s losses.
Support at 1.1904/1.2235 may, albeit having its lower edge recently shattered, remain relevant should price close the month above its base. 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.
Trendline supports drawn from 1.2373 and 1.2041 continue to serve as a technical ‘floor’ in this market, with price recently going toe-to-toe with an interesting area of supply from 1.2212/1.2075, with the bulls clearly the victor here.
Supply at 1.2509/1.2372 entered view as a result of further buying Friday, closing not too far off best levels and potentially threatening moves to demand-turned supply at 1.2649/1.2799, which holds the 200-day SMA at 1.2663.
The RSI indicator continues to extend off lows at 17.00, recently crossing through 50.00.
H4 timeframe:
Reinforced by softening demand for the greenback, Friday watched sterling reach for higher ground after retesting a supply-turned demand base at 1.2136/1.2049. Upside landed the candles within close proximity of a reasonably robust supply at 1.2622/1.2517, close by a 61.8% Fib retracement value at 1.2499. Another supply worthy of note is 1.2854/1.2808, effectively representing the decision point that broke the 1.2725 28th February low.
Also significant on this timeframe is the recent formation of demand plotted at 1.2147/1.2257.
H1 timeframe:
Supply at 1.2520/1.2455 made its debut ahead of the weekly close Friday, offering minimal reaction. Note this area comes with additional resistance in the form of a round number at 1.25, a possible wave 5 completion and the RSI indicator pencilling in bearish divergence from overbought space.
Selling could land 1.24 in view, with a break drawing focus towards 1.23 and channel resistance-turned support (1.1972).
Structures of Interest:
Long term:
We trade within daily supply at 1.2509/1.2372, though possible moves above this region are in sight to demand-turned supply at 1.2649/1.2799 which holds the 200-day SMA at 1.2663.
Short term:
H1 supply, given its current local confluence on the H1 timeframe, is likely of interest today – even more so knowing the base is tied to the underside of H4 supply at 1.2622/1.2517 and glued to the top edge of daily supply at 1.2509/1.2372.
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