Charts: Trading View
(Italics: previous analysis due to limited price change)
Since mid-November (2021), buyers and sellers have been squaring off around support at $1.1237-1.1281—made up of a 61.8% Fibonacci retracement at $1.1281 and a 1.618% Fibonacci projection from $1.1237. ‘Harmonic’ traders will acknowledge $1.1237 represents what’s known as an ‘alternate’ AB=CD formation.
Any upside derived from current support will likely be capped by resistance at $1.1473-1.1583; navigating lower, on the other hand, throws light on Quasimodo support as far south as $1.0778. Given the subdued bullish vibe in recent months, the latter appears the more likely scenario.
Interestingly, the pair took out 2nd November low (2020) at $1.1603 in late September (2021), suggesting the early stages of a downtrend on the weekly timeframe. This is reinforced by the monthly timeframe’s primary downtrend since mid-2008.
Quasimodo support drawn from mid-June at $1.1213 (positioned beneath the weekly timeframe’s Fibonacci structure) made an entrance on 24th November (2021) and remains committed, despite a passionless attempt from bulls so far. A run higher casts light on trendline resistance, extended from the high $1.2254. Establishing a decisive close beneath $1.1213, however, exposes support on the daily timeframe at $1.0991 (not visible on the screen).
The relative strength index (RSI) remains hugging the 50.00 centreline, a level delivering resistance since mid-October (2021). Overthrowing the latter helps validate interest to the upside from current price support (shown through average gains exceeding average losses), yet defending 50.00 as resistance connotes a bearish picture, in line with the immediate downtrend (since May 2021).
Key levels to be mindful of on the H4 scale are:
- Quasimodo support from $1.1272.
- Resistance at $1.1379, accompanied by a 38.2% Fibonacci retracement at $1.1381.
- Beyond the above, a 100% Fibonacci projection is visible at $1.1422, followed by Quasimodo support-turned resistance at $1.1438. Lower on the curve, support falls in around $1.1235.
$1.13 proved soft support on Thursday, whipsawed on two occasions. Supply from $1.1350-1.1341 remains an area of note to the upside, joined by the 1.272% Fibonacci projection at $1.1342. Beneath $1.13, technical eyes will likely be on Quasimodo support at $1.1280, followed closely by a 100% Fibonacci projection coming in from $1.1269. Harmonic traders will note this Fibonacci ratio represents an AB=CD bullish formation. The 100% level also coincides with a 1.27% Fibonacci extension at $1.1272 and a 78.6% Fibonacci retracement at $1.1267 (blue line).
The relative strength index (RSI) is offering little in terms of direction at this point; the indicator is circling the 50.00 centreline.
In terms of the day’s risk events, US jobless unemployment claims rose by 207,000, versus 199,000 expected. US ISM services PMI recorded a lower-than-expected print at 62.0 (consensus: 67.0), though remains above expansionary territory (> 50.00).
Observed Technical Levels:
H1 Fibonacci support between $1.1267 and $1.1272 deserves attention, as it shares chart space with H4 Quasimodo support at $1.1272 and weekly Fibonacci support between $1.1237 and $1.1281. Furthermore, driving into H1 Fibonacci support would entail whipsawing through H1 Quasimodo support ($1.1280) stops, consequently providing a pool of liquidity for bigger players to bid into.
Bulls embraced a modest offensive phase deep within prime support at $0.6968-0.7242, though current trade echoes a bearish tone (AUD/USD down -1.4 percent on the week).
Should buyers regain footing, resistance is formed at $0.7501.
Manoeuvring beneath $0.6968-0.7242 reveals support at $0.6673 and a 50.0% retracement at $0.6756.
Trend on the weekly timeframe has been higher since pandemic lows of $0.5506 (March 2020); however, the monthly timeframe has been entrenched within a large-scale downtrend since mid-2011.
Leaving resistance—made up of a 61.8% Fibonacci retracement at $0.7340, a 100% Fibonacci projection at $0.7315 and an ascending resistance, drawn from the low $0.7106—unchallenged, the currency pair is currently pursuing lower levels.
Support at $0.7021 calls for attention to the downside.
The relative strength index (RSI) elbowed beneath the 50.00 centreline on Thursday, movement informing traders and investors this market is beginning to produce negative momentum (average losses exceeding average gains).
Latest developments out of the H4 chart reveals the technical pendulum is swinging in favour of sellers at the moment. A Quasimodo resistance-turned support at $0.7187 was overthrown, and now serves as possible resistance going forward.
As a consequence, short-term flow is tipped to further underperform until support between $0.7097 and $0.7121 (composed of a 1.618% Fibonacci projection, a 61.8% Fibonacci retracement and horizontal price support). Traders, therefore, may watch for short opportunities on any retest of $0.7187.
Prime support at $0.7138-0.7151 made an entrance in early European hours on Thursday, though struggled to hold beyond $0.7172. Interestingly, the noted area is underpinned by demand at $0.7126-0.7141.
Upstream, supply is visible at $0.7195-0.7207; beneath the aforesaid demand areas, nevertheless, is Quasimodo support at $0.7103 and $0.71.
The relative strength index (RSI) is making its way out of oversold territory, a move that will be looked upon by some technicians as bullish.
Observed Technical Levels:
According to chart studies, sellers appear to have the upper hand right now. Follow-through selling could emerge on the H1 chart, taking out prime support at $0.7138-0.7151 and demand at $0.7126-0.7141 to reach the H4 support area $0.7097 and $0.7121.
Alternatively, H1 bulls could make a stand from current prices and attempt to retest supply from $0.7195-0.7207, arranged just north of H4 resistance at $0.7187.
USD/JPY kicked off the year touching gloves with a 1.272% Fibonacci projection from ¥116.09, following a one-sided break of resistance from ¥114.38, a level capping upside since early 2017 which now represents support. Also of technical note is the currency pair recently refreshing multi-year pinnacles.
In terms of trend, the unit has been advancing since the beginning of 2021, welcoming a descending resistance breach, drawn from the high ¥118.61.
Quasimodo resistance at ¥114.97 was overthrown on Tuesday, allowing a test of Quasimodo resistance at ¥116.33. Mid-week trading, as you can see, has held south of the level, threatening a potential dip back to ¥114.97.
The technical picture from the relative strength index (RSI) shows the indicator on the verge of exiting overbought space. This is generally considered a bearish signal. The caveat, of course, is the RSI can remain within overbought territory for a prolonged period amidst trending environments.
Regarding trend, the unit has been higher since 2021.
Alternative trendline support (drawn from the low ¥113.14) is within range of price, following rejection from Daily Quasimodo resistance at ¥116.33. Support is also seen a handful of pips south of the current trendline at ¥115.38.
$117.76-117.07 supply is fixed above the daily level (not visible on the screen); therefore, a break of the latter shows room to press higher, in line with the current uptrend.
Fibonacci support between ¥115.59 and ¥115.71, once again, demonstrated its value as a technical floor on Thursday, accepting a modest rebound during the early stages of both London and US sessions.
Overhead, ¥116 awaits and could establish resistance. Quasimodo resistance-turned support at ¥115.48 also stands nearby in the event ¥115.59-115.71 cedes ground.
Observed Technical Levels:
In similar fashion to Wednesday’s technical report, despite the clear uptrend, weekly resistance at ¥116.09 (the 1.272% Fibonacci projection) and daily Quasimodo resistance at ¥116.33 remains a concern for bullish setups.
The above indicates ¥116 could hamper upside attempts on the H1 timeframe and perhaps ignite a wave of selling, action consistent with higher timeframe resistances. ¥115 (applied to the H1) serves as a reasonable downside target, converging closely with daily Quasimodo resistance-turned support at ¥114.97.
Resistance at $1.3629-1.3456 made a show in recent weeks—current candle action displaying a doji indecision candle—following a mild pullback from December lows of $1.3160.
Sellers responding to current resistance will likely take aim at the double-top pattern’s ($1.4241) profit objective—measured by taking the distance between the highest peak to the neckline and extending this value lower from the breakout point—around $1.3093.
While the trend on the weekly timeframe demonstrates an upside bias, the monthly timeframe’s primary setting has been lower since late 2007.
Trendline resistance, taken from the high $1.4250, together with neighbouring resistance from $1.3602, remains a possible headwind for GBP/USD. The 200-day simple moving average is also circling above current resistance at $1.3737.
The relative strength index (RSI) is hovering nearby overbought levels. In addition to this, hidden bearish divergence is a possibility.
Quasimodo resistance at $1.3580 remains a key base on the H4 chart at the moment, with a breach of this level shining the technical spotlight on supply coming in at $1.3665-1.3625.
Demand is equally important to note at $1.3428-1.3444, receiving price action at the beginning of the week as traders capitalised on ‘dip-buying’ movement.
Demand at $1.3488-1.3503 (enclosing the $1.35 psychological figure) witnessed decisive buying early Europe on Thursday, enough to pull the currency pair to highs of $1.3559 and shake hands with a 61.8% Fibonacci retracement from $1.3557.
Despite the H1 (and H4) showing bulls governing control, we can see from weekly and daily charts (resistance) sellers could soon take the wheel.
Observed Technical Levels:
The combination of weekly resistance at $1.3629-1.3456, daily resistance at $1.3602 (and daily trendline resistance) and H4 Quasimodo resistance at $1.3580 shows an area between $1.3629 and $1.3580 sellers have shown interest in.
As a result, breaching H1 demand at $1.3488-1.3503 is in the offing, with technical traders perhaps eyeballing the H1 decision point at $1.3441-1.3423 as a viable target, which joins forces with H4 demand from $1.3428-1.3444.
EXENCIÓN DE RESPONSABILIDAD:
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.