July 6th 2021: Markets Quiet; Fed Minutes Awaited.

July 6th 2021: Markets Quiet; Fed Minutes Awaited., FP Markets

Charts: Trading View

EUR/USD:

Monthly timeframe:

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

Closing the book on the month of June witnessed EUR/USD—in the shape of a near-full-bodied bearish candle—touch gloves with familiar support at $1.1857-1.1352 and erase 3.0 percent. A bullish revival from the aforesaid support shines the technical spotlight on 2021 peaks at $1.2349; additional enthusiasm may welcome ascending resistance (prior support [$1.1641]).

Based on trend studies, the primary uptrend has been underway since price broke the $1.1714 high (Aug 2015) in July 2017. Furthermore, price breached major trendline resistance, taken from the high $1.6038, in July 2020.

Daily timeframe:

Analysis largely unchanged from previous report.

Albeit off session tops around 92.41, the US dollar index (ticker: DXY) concluded largely unmoved Monday. Meanwhile, Europe’s single currency wrapped up in the shape of a doji indecision candle in response to US banks closing their doors in observance of Independence Day.

Technically, following Friday’s hammer pattern (often viewed as a bullish signal) off Quasimodo support at $1.1836, the 200-day simple moving average at $1.1998 remains overhead. Failure to build off current support shifts attention to Quasimodo support at $1.1688.

Underpinning a potential advance from $1.1836, the RSI pencilled in bullish divergence, with the indicator’s value venturing out of oversold space. This implies that despite price registering fresh lows, downside momentum has slowed and cautions that buyers could make an entrance.

As for trend on the daily scale, the currency pair has exhibited a consolidation phase since 2021, following healthy gains in 2020.

H4 timeframe:

Analysis unchanged from previous report.

Drawn from early April, $1.1794-1.1822 demand recently made an appearance, an area located just north of daily Quasimodo support plotted at $1.1836.

Occupying higher space is resistance at $1.1937, a level that withstood numerous upside attempts between the 22nd and 25th June. Notably, clouding the level is supply at $1.2006-1.1983—sharing its range with resistance at $1.1990. What’s also technically interesting is the supply forms a decision point (a decision to rupture the $1.1990 support base, and 5th May low at $1.1986).

H1 timeframe:

Analysis largely unchanged from previous report.

A closer reading of price action on the H1 scale reveals the currency pair hovering above demand at $1.1838-$1.1850 (and support from $1.1848), aided by the 100-period simple moving average around $1.1864.

Buyers maintaining position today throws light on demand-turned supply at $1.1895-1.1911, joined by a 61.8% Fib retracement at $1.1910 and the $1.19 round number.

The RSI value remains within touching distance of overbought territory—housing resistance at 78.97 (active since the beginning of this year).

Observed levels:

Outlook largely unchanged from previous report.

Acknowledging monthly flow trades at support from $1.1857-1.1352, together with the monthly trendline resistance, extended from the high $1.6038, giving way mid-2020, buyers could make a show in the summer months. On top of this, the daily chart shows price hugging Quasimodo support from $1.1836. Consequently, price may knock on the door of the 200-day simple moving average around $1.1998.

In conjunction with higher timeframes pointing north, H4 action extending recovery gains from demand at $1.1794-1.1822 (aligns closely with daily Quasimodo support at $1.1836) shifts attention to H4 resistance at $1.1937. Before reaching this far north, H1 demand-turned supply at $1.1895-1.1911 is on the radar. Note that above here, H1 Quasimodo resistance is visible at $1.1956, arranged a touch above $1.1937 on the H4.

Therefore, buyers standing ground off the current 100-period simple moving average today to take aim at $1.19 should not surprise.

July 6th 2021: Markets Quiet; Fed Minutes Awaited., FP Markets

AUD/USD:

Monthly timeframe:

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

Since the beginning of 2021, buyers and sellers have been squaring off south of trendline resistance (prior support – $0.4776 low) and supply from $0.8303-0.8082. Thanks to June’s 3.0 percent decline, however, support is featured at $0.7394. Additional downside pressure brings light to demand at $0.7029-0.6664 (prior supply).

July is currently up 0.4 percent.

Trend studies (despite the trendline resistance [$1.0582] breach in July 2020) show the primary downtrend (since mid-2011) remains in play until breaking $0.8135 (January high 2018).

Daily timeframe:

Analysis largely unchanged from previous report.

The daily chart found itself off supply-turned demand at $0.7453-0.7384 Friday, recovering from year-to-date lows and developing a bullish outside reversal candle. Interest to the upside has the 200-day simple moving average at $0.7566 to target, closely followed by resistance at $0.7626.

The outlook from the RSI shows the indicator is forming bullish divergence, informing traders that while price recorded lower lows, downside momentum has decelerated, proposing the $0.7453-0.7384 response may pull in additional buying.

In terms of trend, 2020 was a good year for AUD/USD, though 2021 is on the back foot.

H4 timeframe:

Analysis unchanged from previous report.

Ahead of support at $0.7440, bulls made their way through consumed supply between $0.7527 and $0.7508 (blue), with the path of least resistance seen to the upside until $0.7570-0.7554 supply. Sheltered south of resistance at $0.7588 and Quasimodo resistance from $0.7599, this is an area sellers could be seen.

H1 timeframe:

Analysis largely unchanged from previous report.

Although Monday finished moderately higher, buyers appear unconvinced.

Technical structure shows $0.75 as feasible support, connected closely with support at $0.7504, a previous Quasimodo resistance, and the 100-period simple moving average. Resistance, on the other hand, calls for attention around $0.7546, a prior Quasimodo support level, and a resistance area from $0.7561-0.7548 (glued to the lower side of H4 supply at $0.7570-0.7554).

The chart’s RSI value finished the week exploring overbought space. Subsequently, Monday fashioned bearish divergence, notifying chartists upside momentum is losing speed.

Observed levels:

Outlook unchanged from previous report.

Daily supply-turned demand at $0.7453-0.7384, mingling with monthly support at $0.7394, is central focus on the bigger picture. $0.7453-0.7384 buyers are likely to take aim at the 200-day simple moving average from $0.7566 on the daily timeframe, with movement above positioning resistance at $0.7626 in the fight.

Scope to advance is also visible on the lower timeframes, targeting H1 resistance at $0.7561-0.7548 and H4 supply at $0.7570-0.7554. Should a retracement take shape, prior to connecting with H1 and H4 zones, and $0.7504 H1 support and $0.75 is brought into the frame, a bullish scenario could develop.

July 6th 2021: Markets Quiet; Fed Minutes Awaited., FP Markets

USD/JPY:

Monthly timeframe:

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

Following January’s bullish engulfing candle and February’s outperformance, March concluded up by 3.9 percent and cut through descending resistance, etched from the high ¥118.66.

Although April finished lower by 1.3 percent and snapped the three-month winning streak, May (+0.2 percent) held the breached descending resistance and echoed support in June, higher by 1.4 percent.

July currently trades 0.1 percent in the red.

Daily timeframe:

Technically speaking, the candles are at an interesting juncture.

Price is sandwiched between trendline support, taken from the low ¥102.59, and long-term resistance at ¥ 111.88-111.20 (supply at ¥112.68-112.20 is directly above).

Trend studies reveal the pair has been trending higher since the beginning of the year.

The RSI has stepped higher since May, limited within the walls of an ascending channel between 58.82 and 47.51.

H4 timeframe:

Resistance from ¥111.56 made a show at the tail end of last week, delivering a bearish bias on Friday. Territory north of current resistance shines light on Quasimodo resistance at ¥112.17.

Continued interest to the downside positions Quasimodo support at ¥110.48 in the crosshairs, sharing chart space with Fib retracement levels (Fib cluster) and trendline support, extended from the low ¥108.56.

H1 timeframe:

Heading into the early hours of London on Monday, ¥111 bids were absorbed and the currency pair touched a low of ¥110.80. Recent hours, however, witnessed price hammer out an AB=CD pattern, completing at the 100% Fib projection from ¥111.06, accompanied by a 100-period simple moving average and neighbouring resistance at ¥111.16.

Should sellers emerge between ¥111.16 and ¥111, demand at ¥110.47-110.55 is perhaps in store.

Activity out of the RSI reveals the value spent Monday engaging with oversold territory, though left support at 18.76 unchallenged. As of current price, the indicator trades at 44.00.

Observed levels:

The long-term monthly chart is in the process of taking on higher levels, following the recent retest of descending resistance-turned support. This places a question mark on daily resistance at ¥111.88-111.20 and, ultimately, throws light on daily supply from ¥112.68-112.20. This also implies daily trendline support, taken from the low ¥102.59, is in a favourable position.

Against the backdrop of higher timeframe flow, H4 indicates an absence of support until around the ¥110.50ish region. This, therefore, supports a short-term bearish theme from between ¥111.16 and ¥111 on the H1 scale, targeting H1 demand at ¥110.47-110.55 (aligns with H4 support at around ¥110.50).

¥110.50, assuming a bearish scene unfolds, is also a zone likely to be of interest for buyers seeking longs in line with higher timeframes.

July 6th 2021: Markets Quiet; Fed Minutes Awaited., FP Markets

GBP/USD:

Monthly timeframe:

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

Since February this year, GBP/USD has echoed a rangebound environment just south of $1.4377: April high 2018. This follows December’s (2020) trendline resistance breach, taken from the high $2.1161, which could serve as support if retested.

Primary trend structure has faced lower since early 2008, unbroken (as of current price) until $1.4377 gives way.

Daily timeframe:

Quasimodo support priced in at $1.3609 is likely on a number of watchlists, having seen the base dovetail closely with a 38.2% Fib retracement at $1.3641 and the 200-period simple moving average, currently circling $1.3648.

Friday’s bullish outside reversal also places emphasis on a possible test of resistance coming in at $1.4003.

Momentum, measured by the RSI, has slowed to the downside of late, despite fresh (price) lows forming. This is shown by way of RSI bullish divergence, with the indicator also approaching the lower side of the 50.00 centreline.

H4 timeframe:

The second half of last week saw price bond with Quasimodo support from $1.3761, handing over the baton to buyers on Friday. Monday, as you can see, extended recovery gains, yet was not really anything to write home about.

Ultimately, scope to climb is present on this chart. Between $1.3879 and $1.3821, consumed supply is evident, while north of here the technical radar points in the direction of supply at $1.3986-1.3958. Note that a resistance zone is also present directly above at $1.4027-1.3998.

H1 timeframe:

Lower on the curve, Quasimodo resistance made its presence felt on Monday at $1.3861. Easing from this region today could land the currency pair at the 100-period simple moving average around $1.3814, closely followed by $1.38.

Travelling higher, however, unlocks $1.39, together with nearby resistance at $1.3935.

With reference to the RSI, end-of-week trading introduced a top around oversold resistance from 72.00, with the indicator heading for a possible test of the 50.00 centreline on Monday.

Observed levels:

Having last week form a bullish outside reversal on the daily scale, either a retest of $1.38 or a break of H1 Quasimodo resistance at $1.3861 is likely to be considered bullish, with $1.39 and H1 resistance at $1.3935 on the radar as possible near-term targets.

July 6th 2021: Markets Quiet; Fed Minutes Awaited., 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • July 6th 2021: Markets Quiet; Fed Minutes Awaited., FP Markets
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