1. Home
  2. »
  3. Technical Analysis
  4. »
  5. December 16th 2020: USD...

December 16th 2020: USD Lower Amid Risk-on Sentiment

December 16th 2020: USD Lower Amid Risk-on Sentiment, FP Markets

EUR/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

Following the break of long-term trendline resistance (1.6038) in July, and subsequent break of supply from 1.1857/1.1352 in August, a modest correction surfaced. However, buyers making an entrance in November and December trading higher by 2.0 percent argues additional upside may be on the horizon, with ascending resistance (prior support – 1.1641) perhaps targeted.

The primary downtrend, nevertheless, remains unbroken until 1.2555 is engulfed (Feb high [2018]).

Daily timeframe:

Brought forward from previous analysis –

In tandem with monthly buyers, daily activity squeezed through the upper perimeter of a descending wedge pattern (correction) between 1.2011 and 1.1612 (some may interpret this arrangement as a descending triangle pattern) heading into the final rounds of November, with December also overrunning resistance at 1.2095.

In recent movement, price has also processed a bullish flag pattern (1.2177/1.2078) off 1.2095, a level now serving as support. As you can see, the pair modestly closed above the bullish flag’s upper side, suggesting not only could EUR/USD reach for the descending wedge pattern’s take-profit target at 1.2318 (yellow), but also the bullish flag’s take-profit level at 1.2384 (purple).

H4 timeframe:

Following last week’s recovery off demand at 1.2040/1.2065 (an area sharing space with a 127.2% Fib projection at 1.2052, a 50.0% level at 1.2050 and a trendline support [1.1602]), supply at 1.2200/1.2170, extended from April, 2018, has recently put a cap on upside. Puncturing the aforementioned supply communicates an early cue the pair may head for the daily descending wedge pattern’s take-profit target at 1.2318.

H1 timeframe:

Tuesday’s writing revealed H1 chiselled out an ascending wedge (1.2147/1.2059), with the lower side having been under pressure since Friday.

As anticipated, though, sellers lacked oomph Tuesday, falling short of the ascending wedge take-profit zone around 1.2060. Buyers made a show off the 100-period simple moving average around 1.2125 heading into the US session and recaptured 1.2150 resistance to test the lower side of the aforesaid ascending wedge.

Observed levels:

According to higher timeframe technicals and the prevailing uptrend, any bearish setups are likely to struggle.

H1 closing above 1.2150 resistance and retesting the level as support echoes a bullish scene, with enough force to perhaps dethrone H4 supply at 1.2200/1.2170 and reach for the daily timeframe’s pattern targets (1.2318/1.2384).

December 16th 2020: USD Lower Amid Risk-on Sentiment, FP MarketsAUD/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

Following a mild correction that addressed the upper border of demand at 0.7029/0.6664 (prior supply), buyers have so far responded well. Up by 4.5 percent in November, with December also trading higher by 2.9 percent, buyers appear free to explore as far north as 0.8303/0.8082 in the coming months, a supply zone aligning closely with trendline resistance (prior support – 0.4776).

In terms of trend, the primary downtrend (since mid-2011) remains south until breaking 0.8135 (January high [2018]).

Daily timeframe:

Partly modified from previous analysis –

Last week brushed aside feeble supply at 0.7453/0.7384 and consequently waved RSI flow into overbought space and handed over supply at 0.7587/0.7528. The aforesaid supply, despite recent bearish candlestick formations, was under pressure on Tuesday. Attention will be on 0.7674 resistance if 0.7587/0.7528 allows buyers to push through.

With reference to the immediate trend, AUD/USD has been higher since bottoming in March.

H4 timeframe:

Partly modified from previous analysis –

Having seen the US dollar index (DXY) navigate terrain below 90.50, AUD/USD adopted a bullish stance off lows ahead of support at 0.7482 on Tuesday.

North of price, supply is seen at 0.7616/0.7591, an area that sits on top of daily supply at 0.7587/0.7528.

H1 timeframe:

Partly modified from previous analysis –

As described in Tuesday’s analysis, the slowdown in momentum led H1 to form a consolidation between 0.7521/0.7572. The report went on to outline external levels rest around the 0.75/76 psychological barriers.

Tuesday witnessed the lower side of the consolidation surrender, allowing a test of the 100-period simple moving average at 0.7508 in early Europe, which attracted fresh buying. The session concluded with price testing the upper side of the consolidation.

Observed levels:

Daily supply at 0.7587/0.7528 displaying signs of weakness, together with monthly price calling for higher levels, places a question mark on the upper side of the H1 range at 0.7572. This could give rise to fresh buying today, with 0.76 targeted (and H4 supply at 0.7616/0.7591).

December 16th 2020: USD Lower Amid Risk-on Sentiment, FP MarketsUSD/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 carving out a descending triangle pattern between 118.66/104.62.

November, as you can see, worked with the lower edge of the aforesaid pattern and finished the month down by 0.3 percent – a third successive monthly loss. December currently trades lower by 0.6 percent.

104.62 ceding ground shines light on demand from 96.41/100.81, followed by trendline support (76.15) and the descending triangle’s take-profit level at 91.04 (red).

Daily timeframe:

Brought forward from previous analysis –

Since November 20, price movement on the daily chart has offered a low-key stance. Technical levels, therefore, remain unchanged.

Trendline resistance (111.68) and supply from 106.33/105.78 are prominent areas north of price.

Light falls on demand at 100.68/101.85 (fixed to the upper base of monthly demand) if sellers make a push.

RSI enthusiasts will note the pair has remained under 57.00 resistance since July.

H4 timeframe:

H4 is currently working with rather large demand at 103.04/103.58 and the lower side of the H4 range between 103.70 support and resistance at 104.73.

H1 timeframe:

After failing to find acceptance above the 104 level, hampered by the 100-period simple moving average around 104.12, USD/JPY nosedived back to support at 103.60 on Tuesday, dragging the RSI value into oversold territory along with it.

Space beneath 103.60 shows room for sellers to make a play for support at 103.18, fixed deep within H4 demand at 103.04/103.58.

Observed levels:

Monthly price appearing to be on the verge of breaching descending triangle support at 104.62 continues to underline a relatively weak market. This, in addition to H4 buyers failing to hold gains out of demand at 103.04/103.58, may watch sellers dig deeper into the aforesaid demand today, perhaps headed for H1 support at 103.18 and the 103 level.

December 16th 2020: USD Lower Amid Risk-on Sentiment, FP MarketsGBP/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

November trading higher by 2.9 percent and December pushing to highs at 1.3539 recently stirred trendline resistance (2.1161).

In terms of trend, the primary trend has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way – April high 2018.

Daily timeframe:

Partly modified from previous analysis –

Since crossing paths with demand at 1.2645/1.2773 and the 200-day simple moving average in late September, GBP/USD has displayed a gradual interest to the upside and generated an AB=CD pullback concluding at 1.3392. Despite mixing with monthly trendline resistance and also recently connecting with daily supply at 1.3622/1.3467 at the beginning of December, sellers are struggling to find grip, with Tuesday rallying higher by 1.0 percent.

The RSI reveals the value rebounded strongly from support around 47.00, on course to perhaps retest overbought space.

H4 timeframe:

With the dollar folding over on Tuesday, and the British pound receiving an additional Brexit boost, demand at 1.3325/1.3281 (prior supply) provided a platform for buyers to work with. The session, as you can see, wrapped up within close range of resistance at 1.3483, a level which if surpassed could lead bullish flow towards resistance parked at 1.3607.

H1 timeframe:

1.33 proved efficient support as we shifted into London on Tuesday, toppling nearby 100-period simple moving average as well as the 1.34 level to link up with supply at 1.3495/1.3462 at the close.

Having seen the aforesaid supply fixed to the lower side of daily supply at 1.3622/1.3467, sellers are showing some interest off the zone in early Asia Wednesday.

From the RSI, traders will note bearish divergence forming.

Observed levels:

Monthly price remains flirting with trendline resistance and daily price revisited supply at 1.3622/1.3467. Although sellers have yet to make a significant showing, overlooking the aforesaid areas is perhaps hasty.

H1 offers at supply from 1.3495/1.3462 are currently active, yet to draw in more heavy-handed sellers a pop to H4 resistance at 1.3483 (placed within the H1 supply) may be necessary.

December 16th 2020: USD Lower Amid Risk-on Sentiment, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • December 16th 2020: USD Lower Amid Risk-on Sentiment, FP Markets
    • Articles
    • Views
    AUTHOR

    FP Markets

    FP Markets is an Australian regulated broker established in 2005 offering access to Derivatives across Forex, Indices, Commodities, Stocks & Cryptocurrencies on consistently tighter spreads in unparalleled trading conditions. FP Markets combines state-of-the-art technology with a huge selection of financial instruments to create a genuine broker destination for all types of traders.

    PROFILE