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December 9th 2020: Cable Swinging Amid Brexit Headlines; Dollar Contained South of 91.00

December 9th 2020: Cable Swinging Amid Brexit Headlines; Dollar Contained South of 91.00, 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, with buyers making an entrance in November and December trading higher by 1.6 percent, this 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.

Although shaping two shooting star patterns into the second half of last week, sellers failed to navigate space below 1.2095, a level now acting as support. A recovery here directs attention to the descending wedge pattern’s take-profit target at 1.2309 (yellow).

RSI fans, however, will note the value recently crossed paths with overbought space and is on track to exit the area.

H4 timeframe:

Brought forward from previous analysis –

EUR/USD enters Wednesday unmoved, as Tuesday unveiled a soft stance ranging between 1.2134/1.2095.

Supply at 1.2200/1.2170 remains present on the H4 chart, an area extended from April 2018. Monday, following an intraday slump to the 38.2% Fib level at 1.2080, moulded a shooting star just ahead of the aforesaid area.

Demand at 1.2040/1.2065 also merits attention on this timeframe, an area sharing space with a 127.2% Fib projection at 1.2052 and a 50.0% level at 1.2050.

H1 timeframe:

Modified from previous analysis –

The 1.21 level and supply coming in from 1.2152/1.2133, together with the 100-period simple moving average at 1.2127, were the central theme on Tuesday.

Demand at 1.2060/1.2076 and an AB=CD correction also remains in the range of vision. Traders will note that in order to reach this area, though, 1.21 must be taken.

It might also be of interest to some traders to note the RSI voyaged below 50.00.

Observed levels:

Brought forward from previous analysis –

H1 demand at 1.2060/1.2076 is likely to stir interest today if the area puts in an appearance. Glued to the upper rim of H4 demand at 1.2040/1.2065, as well as in line with monthly direction and also within close range of daily support at 1.2095, the H1 demand area communicates reasonably healthy confluence.

In addition to the above, liquidity (sell-stops) beneath the 1.21 level may also tempt buying.

December 9th 2020: Cable Swinging Amid Brexit Headlines; Dollar Contained South of 91.00, FP Markets

AUD/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 1 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:

Brought forward from previous analysis –

Supply at 0.7453/0.7384 remains under attack, as Tuesday delivered narrow movement.

With the trend on the daily timeframe depicting a northerly course since March, this places a question mark on the aforesaid supply. Absorbing the latter helps confirm the current trend and throws light on supply from 0.7587/0.7528.

The RSI indicator continues to hover beneath overbought conditions, following the removal of 52.00 resistance at the beginning of November.

H4 timeframe:

Demand at 0.7398/0.7420 remains in the mix on the H4 chart this morning, following a lacklustre Tuesday. A rebound from the aforesaid zone perhaps pulls in the ascending triangle take-profit target (pink) at 0.7463. Current demand giving way, on the other hand, could have the upper side of the ascending triangle region make a show at 0.7340.

H1 timeframe:

Although Tuesday demonstrated uninspiring movement, intraday activity did manage to cross paths with demand at 0.7391/0.7401, buttoned to the lower side of H4 demand at 0.7398/0.7420 and aligning with the 0.74 level. Candlestick traders will note the demand area was tested by way of a hammer candlestick configuration.

However, any upside attempts from the zone could be hindered by the 100-period simple moving average, currently circulating 0.7423.

Observed levels:

As communicated on Tuesday, with monthly price calling for higher levels, and daily supply from 0.7453/0.7384 in a fragile state, the test of H1 demand at 0.7391/0.7401 may spark follow-through interest to the upside.

December 9th 2020: Cable Swinging Amid Brexit Headlines; Dollar Contained South of 91.00, FP Markets

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 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.

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.

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

Light falls on demand at 100.68/101.85 (fixed to the upper base of monthly demand and drawn from September 2016) if sellers make a push.

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

H4 timeframe:

Brought forward from previous analysis –

Support at 103.70 made its presence known again last Thursday, arranged just ahead of demand from 103.04/103.58, extended from March 2020. Traders will also note resistance is seen at 104.73.

Having seen both support and resistance welcome at least two consecutive tests, the H4 chart is considered rangebound for the time being.

H1 timeframe:

With volatility considerably reduced Tuesday, H1 remained between the Fib combination around 104.20 (161.8% Fib projection at 104.20 and 50.0% level at 104.21) and the 104 level.

Another interesting feature on the H1 chart is the recent formation of a bearish flag (103.92/104.14). Although not the prettiest, a break of the lower side of the aforesaid bearish flag could signal sellers may attempt to overrun 104 to reach H4 support at 103.70.

In terms of the RSI indicator, the value is drifting above the 50.00 level.

Observed levels:

Modified from previous analysis –

Monthly price appearing to be on the verge of breaching descending triangle support at 104.62 continues to underline a relatively weak market.

The above implies H4 sellers could try to make an entrance off 104.20 today, perhaps breaching the lower base of the H1 bearish flag.

December 9th 2020: Cable Swinging Amid Brexit Headlines; Dollar Contained South of 91.00, FP Markets

GBP/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 currently higher by 0.3 percent 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:

Brought forward 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.

With monthly trendline resistance making an entrance and daily supply also recently joining the fight at 1.3622/1.3467, sellers may eventually take the lead despite Monday and Tuesday finishing off session lows.

RSI followers will also see the line is beginning to round ahead of overbought territory, currently navigating space below 60.00.

H4 timeframe:

Brexit headlines, once again, dominated GBP/USD Tuesday, though the pair ultimately finished the session off worst levels.

Resistance from 1.3396 remains core structure on the H4 timeframe, with a break unmasking resistance at 1.3483. Demand at 1.3240/1.3273 is also a primary area of interest on the H4 chart, plotted above support at 1.3182.

H1 timeframe:

An interesting consolidation is taking shape on the H1 chart between the 1.34 and 1.33 levels, with the upper handle sharing space with the 100-period simple moving average.

While a breakout to the downside shines light on the 1.32 region, a breakout higher could form the D-leg to an AB=CD pattern that concludes at supply from 1.3495/1.3462, around 1.3465.

Observed levels:

Modified from previous analysis –

Monthly price flirting with trendline resistance, as well as daily supply stepping forward last week at 1.3622/1.3467, communicates a bearish vibe. Although the immediate trend faces higher on the daily timeframe, the bearish structure and monthly downtrend suggests sellers still have the advantage.

From the above, 1.34 resistance and the 100-period simple moving average is potentially relevant. A H1 close above 1.34, though, shines light on H1 supply at 1.3495/1.3462 and the AB=CD bearish pullback as a potential base for sellers.

December 9th 2020: Cable Swinging Amid Brexit Headlines; Dollar Contained South of 91.00, FP Markets

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  • December 9th 2020: Cable Swinging Amid Brexit Headlines; Dollar Contained South of 91.00, FP Markets
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