June 9th 2021: Markets Rangebound Ahead of Key Events—BoC Today and ECB Thursday

June 9th 2021: Markets Rangebound Ahead of Key Events—BoC Today and ECB Thursday, 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)

Following a three-month retracement, support at 1.1857-1.1352 made an entrance and inspired a bullish revival in April, up 2.4 percent at the close. May also extended recovery gains, trading higher by 1.7 percent. June, however, is off to a mildly rocky start, down 0.4 percent as of current trade.

April upside—alongside May’s optimism—throws light on the possibility of fresh 2021 peaks in the months ahead, followed by a test of 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. Additionally, price breached major trendline resistance, taken from the high 1.6038, in July 2020.

Daily timeframe:

Technical structure largely unchanged from previous analysis.

Since mid-May, technicians will note the unit has been hovering (consolidating) within reach of Quasimodo resistance at 1.2278. Territory south of current price unearths dynamic support around 1.1983: the 200-day simple moving average.

From the perspective of the RSI, the indicator remains engaging with support at 51.36, with the value demonstrating signs of strength off the base.

H4 timeframe:

Ahead of the impending ECB meet on Thursday, Europe’s single currency eked out a modest bearish tone on Tuesday against a somewhat stronger greenback across the board.

Technically speaking, Tuesday’s retreat shaped just south of a 61.8% Fib retracement at 1.2206. Harmonic traders will note the aforesaid Fib represents a second take-profit target derived from the recently completed AB=CD formation off the 100% Fib projection at 1.2123 (arranged just south of a 61.8% Fib retracement at 1.2094).

Traders may also acknowledge additional resistance resides at 1.2244.

H1 timeframe:

Volatility thinned heading into the early hours of London on Tuesday, balancing off the 100-period simple moving average around 1.2169. Price action traders will be monitoring the 1.22 figure, a level in the company of another layer of resistance from 1.2211. As noted in Monday and Tuesday’s technical briefings, the ‘H4 AB=CD’ pattern’s 61.8% Fib retracement is located between the aforesaid H1 levels at 1.2206.

Downstream, south of the 100-period simple moving average, underperformance shines the technical spotlight on support at 1.2132, located nearby trendline resistance-turned support, extended from the high 1.2254.

In terms of where we’re positioned on the RSI, resistance at 67.65 is a prominent level right now, with additional resistance plotted nearby at 78.97. As for support, the 50.00 centreline appears to be serving as a relatively strong floor.

Observed levels:

Technical structure largely unchanged from previous analysis on the higher timeframes. Scope for further upside is visible on the monthly scale, with the daily timeframe chalking up a potential line in the sand at 1.2278: a Quasimodo resistance level.

Against the backdrop of higher timeframe structure, the space between the 1.22 figure and resistance at 1.2211 on the H1 may still be of interest to lower timeframe traders, which houses the H4 timeframe’s 61.8% (AB=CD) Fib level at 1.2206. Yet, seeing as price cleared a chunk of offers from 1.22 late Monday, the 1.2211/1.2200 region could be fragile. The question, therefore, is are we heading north of 1.22 to shake hands with H1 Quasimodo resistances at 1.2257 and 1.2241, and, by extension, H4 resistance at 1.2244?

June 9th 2021: Markets Rangebound Ahead of Key Events—BoC Today and ECB Thursday, 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 battling for position south of trendline resistance (prior support – 0.4776 low) and supply from 0.8303-0.8082. Should a bearish scenario unfold, support at 0.7394 is featured to the downside, with additional downside pressure targeting demand at 0.7029-0.6664 (prior supply).

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:

Technical structure largely unchanged from previous analysis.

Despite the second half of last week snapping to a low of 0.7645, since April 20th, resistance at 0.7816 and support from 0.7699 continues to work with a defined range (yellow).

Support at 0.7563 remains in view as a potential objective should sellers take the wheel, a level deriving additional (dynamic) support from the 200-day simple moving average circling 0.7535. Above 0.7816, supply falls in around 0.8045-0.7985.

With respect to trend, we have been higher since the early months of 2020. However, we must take into account the currency pair has been mostly directionless since the beginning of 2021.

The RSI shows the value attempting to secure position above the 50.00 centreline, a move not only signalling strength to the upside, but also highlighting trendline resistance, drawn from 80.12.

H4 timeframe:

AUD/USD left behind a modestly negative tone on Tuesday, weighed on the back of USD bids.

As underlined in Tuesday’s technical briefing, overhead resistance is arranged at peaks around 0.7769 and Quasimodo resistance from 0.7782, shadowed by daily resistance noted above at 0.7816.

In the event of a 0.7726 breach—Monday’s session low—the technical landscape indicates a 0.7632-0.7653 demand revisit may be on the menu.

H1 timeframe:

Supply at 0.7783-0.7771—capped upside pressure at the beginning of June—and the 100-period simple moving average at 0.7724 remain clear technical levels on the H1 chart.

Outside of the aforementioned areas unearths the 0.78 and 0.77 psychological figures. For any Fibonacci traders, the 38.2% value falls in at 0.7720, with a 61.8% value seen from 0.7692.

The modest rise in selling interest on Tuesday also pulled the RSI through the 50.00 centreline, which, as you can see, now currently serves as indicator resistance. To the downside, support resides within the walls of oversold space at 19.30.

Observed levels:

Short-term chart studies suggest the H1 timeframe is bound for the 100-period simple moving average, currently circling 0.7724. What’s technically noticeable is this dynamic value joins forces with a 38.2% Fib retracement at 0.7720.

H1 supply at 0.7783-0.7771, which houses H4 Quasimodo resistance at 0.7782, deserves attention should buyers make an appearance.

Another level worth keeping an eye on is the 0.78 psychological figure—aligning with daily (range) resistance at 0.7816.

June 9th 2021: Markets Rangebound Ahead of Key Events—BoC Today and ECB Thursday, 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, echoing potential support for the month of June, currently trading unchanged.

Daily timeframe:

Technical structure largely unchanged from previous analysis.

Long-term resistance at 110.94-110.29 (posted under supply at 111.73-111.19) remains centre of attention on the daily timeframe, with downside flow targeting 108.60ish lows (green oval), followed by supply-turned demand at 107.58-106.85.

Trend studies reveal the pair has been trending higher since the beginning of 2021.

The RSI remains stationed under resistance at 57.00 and is tackling the 50.00 centreline. Should a break come to pass, a test of oversold might be in store, targeting support at 28.19.

H4 timeframe:

Limited change was observed on Tuesday, though bulls did manage to maintain position north of demand at 109.02-109.20, which, as underlined in previous writing, represents a decision point to initially push above 109.71 tops. Also technically notable is trendline support, drawn from the low 107.48, intersecting with the noted demand base.

Assuming the market remains bid, supply is seen fixed just north of tops (110.33—last Thursday’s peak) at 110.85-110.46, which happens to house a 100% Fib projection at 110.59 and a 1.618% Fib expansion at 110.69.

H1 timeframe:

For those who read Tuesday’s technical briefing you may recall the following (italics):

Demand at 109.07-109.19, given the base is fixed within H4 demand mentioned above at 109.02-109.20, welcomed price action on Monday and has so far held position.

What’s interesting is the RSI shows bullish divergence forming as the value left oversold territory. This informs traders that downside momentum could be pressing the pause button for the time being, consequently allowing bulls to make a show, which may see price upside make its way to the 100-period simple moving average around 109.71.

As evident from the H1 scale, we have seen buyers hold levels above 109.07-109.19 demand, with the majority of traders now likely eyeing the 100-period simple moving average now circling around 109.66. A break higher could see the unit touch gloves with the 110 neighbourhood (as well as H1 resistance from 109.95 and a trendline support-turned resistance, taken from the low 108.56).

Observed levels:

As noted in Tuesday’s analysis (italics):

Technically, we have H1 demand in play at 109.07-109.19 and H4 demand also active at 109.02-109.20, alongside the monthly timeframe attempting to forge support off a recently breached descending resistance line. Aside from the daily timeframe fading long-term resistance at 110.94-110.29, technical elements suggest a bullish wave is around the corner, targeting at least the 100-period simple moving average around 109.71 on the H1.

Given the SMA is a dynamic value, traders are now likely watching this indicator around the 109.66ish region on the H1 as the initial upside target, with subsequent buying to perhaps take aim at 110.

June 9th 2021: Markets Rangebound Ahead of Key Events—BoC Today and ECB Thursday, FP Markets

GBP/USD:

Monthly timeframe:

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

The pendulum swung in favour of buyers following December’s 2.5 percent advance, stirring major trendline resistance (2.1161). February subsequently followed through to the upside (1.7 percent).

May, despite diminished volatility during March and April, traded firmly on the front foot, up by 2.8 percent. June, however, is somewhat depressed, albeit recording fresh YTD peaks at 1.4250.

Despite the trendline breach (which could serve as support if retested), primary trend structure has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way (April high 2018).

Daily timeframe:

Technical structure largely unchanged from previous analysis.

Quasimodo resistance at 1.4250 and support at 1.4003 remain pivotal barriers on the daily chart.

Demand at 1.3857-1.3940—an important technical area where a decision was made to break above 1.4003 resistance—is also perhaps on the radar.

Interestingly, trend in this market has remained to the upside since March 2020.

Trendline support, taken from the low 36.14 on the RSI, gave up position last week and recently witnessed the value bottom ahead of the 50.00 centreline.

H4 timeframe:

Technical structure largely unchanged from previous analysis.

Since mid-May, the H4 chart has been busy carving out a consolidation between 1.4096 and 1.4219. In spite of a handful of whipsaws (fakeouts beyond range extremes are common), the range remains intact.

Technical structure above the current consolidation has daily Quasimodo resistance from 1.4250 in place; below the range, the chart points to trendline support, drawn from the low 1.3668, and support priced in at 1.4007.

H1 timeframe:

Aside from short-term fluctuations developing around the 100-period simple moving average at 1.4148 on Tuesday, focus, as noted in previous reports, remains on the 1.42 and 1.41 figures (the latter joins with a 61.8% Fib), echoing a similar picture to the H4 (see above).

Outside of these levels, focus is drawn to support at 1.4078 and resistance formed from 1.4246.

The technical position of the RSI has the value navigating space just south of the 50.00 centreline, following a recovery ahead of oversold territory.

Observed levels:

Technical structure largely unchanged from previous analysis.

Aside from the monthly and daily timeframes showing us price trades near 2021 highs at 1.4250, immediate technical structure on these timeframes is limited for the time being. Despite this, traders are urged to keep an eye on daily Quasimodo resistance at 1.4250 and daily support at 1.4003.

The H4 timeframe’s range between 1.4096 and 1.4219 is likely still on the radar for medium-term traders, looking to fade range extremes. This will see H1 traders hone in on the 1.41/42 figures.

It’s also worth pointing out the technical convergence existing between H4 support at 1.4007 and the key figure 1.40 on the H1 (below current structure—not visible on the screen). The 1.40 zone could actually prove a solid platform to help facilitate a fakeout through H4 trendline support seen just above it around 1.4030ish.

June 9th 2021: Markets Rangebound Ahead of Key Events—BoC Today and ECB Thursday, FP Markets

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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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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