July 29th 2020: DXY Comeback Snaps 7-Day Losing Streak Though Fails to Grip 94.00

July 29th 2020: DXY Comeback Snaps 7-Day Losing Streak Though Fails to Grip 94.00, FP Markets

EUR/USD:

Monthly timeframe:

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

The month of May, as you can see, recovered off worst levels out of demand from 1.0488/1.0912 and closed firm. This prompted an extension in June to highs at 1.1422, adding 1.2% despite also running into opposition at the lower ledge of nearby supply from 1.1857/1.1352 (unites with long-term trendline resistance [1.6038]).

Interestingly, July, currently trading +4.3%, is on course to overthrow the aforesaid trendline resistance and supply.

With reference to the primary trend, the pair has exhibited lower peaks and troughs since 2008.

Daily timeframe:

Tuesday, as you can see, modestly snapped a seven-day winning streak out of supply at 1.1798/1.1723, and curved the RSI value from within overbought territory.

Seeking lands south of current supply today swings support at 1.1553 into the light, a level closely connected with trendline support (1.0774), whereas additional upside, moves that overrun supply, throws light on another supply from 1.2012/1.1937.

H4 timeframe:

In view of Tuesday’s pullback, an interesting demand area at 1.1682/1.1716 made its way into focus. Buyers have attempted to stamp authority from the area, though appear to lack follow-through enthusiasm to meet resistance parked at 1.1791.

Drilling under the noted demand today shines light on additional demand at 1.1582/1.1621 and trendline support (1.1254).

H1 timeframe:

1.17 made an entrance on Tuesday, exhibiting modest support heading into London trade. 1.1740, though, has proven a tough nut to crack in terms of intraday resistance. This increases the probability a 1.17 breach may materialise, perhaps feeding price towards demand at 1.1641/1.1658 and intersecting 1.1650 support and 100-period simple moving average.

Structures of Interest:

Partially altered from previous analysis –

Monthly price trades FIRMLY above trendline resistance, albeit sheltered within the upper parapets of supply.

Daily action tested supply at 1.1798/1.1723 and shows signs of bearish intent.

H4 rests at demand from 1.1682/1.1716, but buyers appear to be lacking. H1 has 1.17 on the radar as support, though capped under 1.1740 resistance.

Collectively, it seems sellers have the advantage heading into Wednesday. A H1 close under 1.17 not only serves as an intraday bearish cue to 1.1650 support, it offers an early signal current H4 demand is likely cave.

July 29th 2020: DXY Comeback Snaps 7-Day Losing Streak Though Fails to Grip 94.00, FP Markets

AUD/USD:

Monthly timeframe:

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

May’s extension, together with June and July’s follow-through, witnessed supply at 0.7029/0.6664 and intersecting long-term trendline resistance (1.0582), relinquish ground in recent trading. Technically, buyers are now potentially free to run as far north as 0.8303/0.8082, a supply zone that aligns closely with trendline resistance (prior support – 0.4776).

Despite the above, the market’s primary trend still points south, demonstrating a series of lower lows and lower highs since mid-2011.

Daily timeframe:

Partially altered from previous analysis –

Last Wednesday’s action came within a stone’s throw away from reaching 0.7197 resistance, with Thursday delivering a bearish candle and snapping a four-day winning streak. Monday replied with strength (full-bodied bullish candle), with Tuesday modestly following through and taking the currency pair to within touching distance of the aforesaid resistance.

In terms of the RSI oscillator, the value is still seen producing bearish divergence around overbought levels.

H4 timeframe:

Partially altered from previous analysis –

Following last Wednesday’s rejection at supply from 0.7198/0.7179, an area which houses daily resistance underlined above at 0.7197, Friday dipped a toe in waters just north of support at 0.7043.

Putting forward a mild recovery into the week’s end, Monday and Tuesday have extended recovery gains and brought the pair to within a few pips of the aforesaid supply.

H1 timeframe:

According to technical structure on the H1 timeframe, demand falls in around 0.7111/0.7122, sponsored by the 100-period simple moving average. To the upside, supply, by way of a rally-base-drop, is visible at 0.7183/0.7163.

Outside of the two aforesaid zones, 0.72/1 are seen as possible reversal points.

With respect to the RSI oscillator, we’re holding above 50.00 though remain reluctant to enter overbought terrain.

Structures of Interest:

Having noted monthly price sweeping through supply and associated trendline resistance, breaking daily resistance at 0.7197 should not raise too many eyebrows, also in line with the immediate trend.

This implies bullish strategies are possible north of the 0.72 region. In addition, it also implies current H1 and H4 supply areas may be fragile.

July 29th 2020: DXY Comeback Snaps 7-Day Losing Streak Though Fails to Grip 94.00, 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.

April and May were pretty uneventful, with June also wrapping up indecisively in the shape of a neutral doji candlestick pattern. July, nonetheless, currently trades lower by 2.6%.

Areas outside of the noted triangle can be seen at supply from 126.10/122.66 and demand coming in at 96.41/100.81.

Daily timeframe:

Partially altered from previous analysis –

Demand at 105.70/106.66 welcomed price action Friday, with Monday tunnelling through the base and Tuesday returning things to support coming in from 105.01. This marks the pair’s fourth successive daily decline. Beyond the latter, limited (obvious) support is seen until demand at 100.68/101.85, extended from October 2016.

Also noteworthy is the RSI indicator recently bottomed within oversold boundary.

H4 timeframe:

Partially altered from previous analysis –

Large demand at 104.50/105.29 made a showing Monday with early Tuesday challenging the lower boundary of a newly formed supply from 106.16/105.68. It should also be noted 104.50/105.29 houses daily support at 105.01 and the lower base of the monthly descending triangle pattern at 104.62.

H1 timeframe:

Early Europe, Tuesday, found itself above 105.50 resistance, but was unable to draw in supply at 105.94/105.76 before dropping back through 105.50 and crossing paths with 105.

Traders will note a break of 105 will likely see support at 104.82 make a show.

Structures of Interest:

USD/JPY is scratching some interesting support structure right now, enough to perhaps persuade a recovery.

Monthly price is heading to 104.62 (lower edge of descending triangle), daily price trades from support at 105.01, H4 tests demand at 104.50/105.29 and H1 flirts with the 105 level.

July 29th 2020: DXY Comeback Snaps 7-Day Losing Streak Though Fails to Grip 94.00, FP Markets

GBP/USD:

Monthly timeframe:

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

GBP/USD trades higher by 4.3% in July, with price action displaying signs of dethroning long-term trendline resistance (1.7191) after support at 1.1904/1.2235 withstood downside attempts in April and May.

Despite the primary trend facing lower since early 2008, rupturing current trendline resistance could have buyers work towards another prominent trendline resistance (2.1161).

Daily timeframe:

Partially altered from previous analysis –

After squeezing above the 200-day simple moving average and, after a fleeting retest of the latter, the pair is now seen drilling into supply from 1.3021/1.2844. Note also that sterling recorded its eighth successive daily gain against the buck yesterday.

Failure to hold supply, channel resistance (1.2813) is likely next in the firing range.

The RSI oscillator is also seen toying with the 75.00 overbought value.

H4 timeframe:

Partially altered from previous analysis –

Last week’s analysis noted the possibility of a bullish pennant formation between 1.2768/1.2644. As you can see, Friday kicked through the upper borderline of the aforesaid pattern and saw Monday overturn supply at 1.2851/1.2805, followed by a retest on Tuesday that tempted additional buying.

The break of the bullish pennant, generally considered continuation patterns, potentially stirred a buy signal, targeting 1.3008 (measured by calculating the preceding move and adding this value to the breakout point – pink).

H1 timeframe:

Partially altered from previous analysis –

Buyers pushed aside 1.29 heading into opening US trade Tuesday, clearing the path to 1.2950 resistance, which, for now, holds firm. Notably, recent optimism also established clear demand drawn from 1.2860/1.2880, an area where the decision was clearly made to violate 1.29.

Technical structure also puts forward a trendline support (1.2518).

With reference to the RSI oscillator, we’re seen trading around overbought territory, producing bearish divergence.

Structures of Interest:

Partially altered from previous analysis –

Monthly traders are attempting to secure position above trendline resistance, while daily price is engaging supply at 1.3021/1.2844.

With the H4 bullish pennant pattern recently making its presence felt, emphasising the possibility of reaching 1.30s, and monthly showing signs of reaching for higher levels, this could be enough to push through opposition at daily supply as well as 1.2950 resistance on the H1.

On account of the above, a test at H1 demand from 1.2860/1.2880 could be something to watch for today. This, of course, entails whipsawing through 1.29 and filling sell-stops, consequently providing fuel (liquidity) to buy into.

July 29th 2020: DXY Comeback Snaps 7-Day Losing Streak Though Fails to Grip 94.00, FP Markets

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  • July 29th 2020: DXY Comeback Snaps 7-Day Losing Streak Though Fails to Grip 94.00, FP Markets
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