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March 31st 2020: DXY Rebounds – Retrieves 99.00 To the Upside While G10 Peers Trade Subdued

March 31st 2020: DXY Rebounds – Retrieves 99.00 To the Upside While G10 Peers Trade Subdued, FP Markets

EUR/USD:

Monthly timeframe:

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

In the early stages of March, price manoeuvred EUR/USD into a heavyweight demand-turned supply zone at 1.1857/1.1352. Leaving long-term trendline resistance (1.6038) unopposed, the pair reversed gains and burrowed into demand at 1.0488/1.0912.

The recent recovery, nevertheless, reclaimed monthly losses, and trades pretty much unchanged as we head into April, formed in the mould of a long-legged doji indecision monthly candle. So, to a degree, we’re now rangebound between the two aforementioned price structures.

The primary downtrend remains in motion, trading lower since 2008, exhibiting clear lower peaks and troughs.

Daily timeframe:

Shaped by way of a bearish inside candlestick pattern, EUR/USD snapped a six-day winning streak Monday. Circulating around the 200-day SMA value at 1.1081, sited a few points ahead of supply derived from 1.1239/1.1179 that merges closely with a trendline formation (1.0879), recent movement proposes further downside could be on the cards towards demand at 1.0925/1.0864.

H4 timeframe:

What’s interesting on this timeframe from a technical standpoint is the small demand, the decision point to break 1.1045, at 1.0889/1.0937. This is certainly an area to keep an eye on in the event we revisit lower levels, since sell-stop liquidity beneath Friday’s low makes this an interesting base to bounce price from.

To the upside, supply around 1.1210ish appears fragile (arc pattern), leaving supply at 1.1336/1.1272 exposed, intersecting with a 78.6% Fib retracement at 1.1310.

H1 timeframe:

EUR/USD grinded south Monday, following the completion of a 5-wave impulse move, retesting the underside of 1.11 and tunnelling through channel support (1.0784). As of current price, we’re retesting the underside of 1.1050, close by the channel support-turned resistance. The 1.10 handle is in sight as the next possible support target on this timeframe, with a break potentially setting the stage for a move towards the 100-period SMA, followed by H4 demand pencilled in at 1.0889/1.0937 (encapsulates the round number 1.09).

Structures of Interest:

The daily bearish inside candle, as well as H1 price retesting resistance at 1.1050/channel resistance and H4 action showing some leg room to push lower, places sellers in the driving seat it would seem.

Intraday bearish themes off 1.1050 are an option, though may require drilling down to the lower timeframes in order to secure more appealing risk/reward. A break through 1.10 also underlines an additional bearish scenario and has H4 demand in sight at 1.0889/1.0937, glued to the top edge of daily demand at 1.0925/1.0864.

March 31st 2020: DXY Rebounds – Retrieves 99.00 To the Upside While G10 Peers Trade Subdued, FP Markets

AUD/USD:

Monthly timeframe:

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

Overwhelmed by the effects of the coronavirus pandemic, March scored seventeen-year lows at 0.5506 ahead of demand pencilled in from 0.5219/0.5426. The move also whipsawed through the 0.6006 October 1st low (2008).

Recent action, however, chalked up an impressive recovery, reclaiming more than 80% of March’s losses, consequently drawing the pair to within striking distance of supply fixed at 0.7029/0.6664, intersecting with a long-term trendline resistance (1.0582).

With reference to the market’s primary trend, a downtrend has been present since mid-2011.

Daily timeframe:

Brought forward from previous analysis –

Demand-turned supply at 0.5926/0.6062 yielded Friday, with price recording its sixth successive daily advance.

Structurally, the break higher has free reign to approach a demand-turned supply at 0.6330/0.6245 this week, which holds a 50.0% retracement band at 0.6271.

With reference to the RSI indicator, the value is seen making headway north of 30.00, though has yet to challenge 50.00.

H4 timeframe:

Partially altered from previous analysis –

Supply at 0.6147/0.6078 made a showing Friday, albeit delivering little, before exploring higher ground. As you can see, trendline support (0.5506) was left unchallenged.

Monday produced little in terms of market movement, confined within a narrow range around the top edge of the recently engulfed supply base.

Immersing the aforementioned zone has perhaps laid the foundation for a climb to 0.6314/0.6235, an area comprised of a support-turned resistance at 0.6314, a 161.8% Fib ext. level at 0.6273 and a 61.8% Fib retracement at 0.6235 (yellow).

H1 timeframe:

Despite a healthy rebound witnessed out of the US dollar index Monday, AUD/USD emphasised a directionless state, mid-way between the 0.61/2 levels.

Should intraday flow address 0.61 today, traders are urged to pencil in the possibility of a whipsaw to demand at 0.6034/0.6087. Also note, we have the 100-period SMA intersecting with the said demand after recently turning higher.

Headspace above 0.62 reveals room to approach 0.63, enclosed by a supply zone drawn in at 0.6325/0.6275.

Structures of Interest:

It’s likely daily demand-turned supply at 0.6330/0.6245 will make a showing this week.

H1 supply at 0.6325/0.6275 inhabits the daily demand-turned supply at 0.6330/0.6245 and grips the upper boundary of the current H4 resistance zone between 0.6314/0.6235. Therefore, the said H1 supply is likely to pack a punch if tested.

In addition to the above, a test of 0.61 echoes the possibility of a fakeout play into H1 demand coming in from 0.6034/0.6087. Do bear this in mind if considering bullish themes off 0.61. A bullish hammer candlestick signal that whipsaws through 0.61 into the said demand would, by most technicians, be considered a potential bullish scenario.

March 31st 2020: DXY Rebounds – Retrieves 99.00 To the Upside While G10 Peers Trade Subdued, 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 busy carving out a descending triangle pattern (118.66/104.62).

March breached the lower edge of the descending triangle, yet has recovered in strong fashion, leaving nearby demand at 96.41/100.81 unchallenged. Note current action also faded the descending triangle’s upper boundary, with the month now trading in neutral territory by way of a long-legged doji candlestick pattern.

In the event of a breakout higher, traders’ crosshairs will likely be fixed on long-term supply at 126.10/122.66.

Daily timeframe:

Partially altered from previous analysis –

Buyers lost grip amid the later stages of last week, after earlier action chalked up back-to-back indecision candlestick patterns ahead of supply at 112.64/112.10. Thursday put in a dominant bearish candle, filling a large portion of its body, with Friday following suit and taking hold of the 200-day SMA value, currently circulating around the 108.30 region.

Monday wrapped up pretty much unchanged, ranging between 108.29/107.12 and forming a doji candlestick pattern, often interpreted as indecision. Traders will note the candlestick configuration was capped by the 200-day SMA at 108.30, suggesting price may step towards demand at 105.70/106.66.

H4 timeframe:

As stated in recent analysis, active buying is unlikely to emerge on this timeframe until crossing paths with the 38.2% Fib retracement at 107.66, which, as you can see, did indeed occur. Though it took a move to lows of 107.12 before buyers stepped in.

Beneath here, the supply-turned demand base at 105.75/105.17 is the next obvious platform on the radar, while to the upside nearby supply resides at 108.88/108.49.

H1 timeframe:

Likely reinforced by the strong DXY bid Monday, USD/JPY H1 movement tested demand at 107.07/107.34, sited just ahead of the 107 handle.

Orders surrounding the 108 handle suffered both ends yesterday; breakout buyers’ orders were tripped as were sellers’ buy stops. Although the H1 candles closed the day south of 108, the path north towards demand-turned supply at 108.84/109.23 is reasonably clear, which holds 109 within and has the 100-period SMA heading towards the upper boundary of the said supply.

Structures of Interest:

In view of Monday’s lacklustre performance, the outlook remains unchanged from Monday’s report.

With the 200-day SMA holding as resistance at 108.30, and monthly price offering a somewhat indecisive tone within its descending triangle formation, sellers appear to have the upper hand with eyes on demand at 105.70/106.66.

With longer-term flow echoing a bearish vibe, bearish intraday scenarios might be an idea off the underside of 108 today. H1 demand at 107.07/107.34 is likely next in the firing range as support, with subsequent moves lower targeting 107 and then the top edge of daily demand at 106.66.

March 31st 2020: DXY Rebounds – Retrieves 99.00 To the Upside While G10 Peers Trade Subdued, FP Markets

GBP/USD:

Monthly timeframe:

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

Bottoming at lows not seen since the 1980s, ahead of a 127.2% Fib ext. level at 1.1297, March’s candle has staged an impressive recovery and regained approximately 80% of the month’s losses.

Support at 1.1904/1.2235 may, albeit having its lower edge recently shattered, remain relevant should price close the month above its base. Nearby resistance can be seen in the form of a trendline formation (1.7191).

Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008.

Daily timeframe:

Partially altered from previous analysis –

Trendline supports drawn from 1.2373 and 1.2041 continue to serve as a technical ‘floor’ in this market, with price recently going toe-to-toe with an interesting area of supply from 1.2212/1.2075, with the bulls clearly the victor here.

Supply at 1.2509/1.2372 entered view as a result of further buying Friday, closing not too far off best levels and potentially threatening moves to demand-turned supply at 1.2649/1.2799, which holds the 200-day SMA at 1.2663.

Monday closed in the form of a doji candlestick pattern around the top edge of Friday’s range.

The RSI indicator continues to extend off lows at 17.00, though struggling to gain north of 50.00.

H4 timeframe:

Partially altered from previous analysis –

In recent sessions we watched sterling mildly fade levels a touch south of a reasonably robust supply at 1.2622/1.2517, close by a 61.8% Fib retracement value at 1.2499. Another supply worthy of note is 1.2854/1.2808, effectively representing the decision point that broke the 1.2725 28th February low.

Also significant on this timeframe is the recent formation of demand plotted at 1.2147/1.2257, just north of a supply-turned demand at 1.2136/1.2049.

H1 timeframe:

Supply at 1.2520/1.2455 made its debut ahead of the weekly close. Note this area came with additional resistance in the form of a round number at 1.25, a wave 5 completion and the RSI indicator pencilling in bearish divergence from overbought space.

Selling, as underlined in Monday’s analysis, could land 1.24 in view, with a break drawing focus towards channel resistance-turned support (1.1972), and possibly 1.23.

Structures of Interest:

It was stated in Monday’s report H1 supply, given its local confluence on the H1 timeframe, is likely of interest– even more so knowing the base is tied to the underside of H4 supply at 1.2622/1.2517 and glued to the top edge of daily supply at 1.2509/1.2372.

Traders short from the current H1 supply have likely reduced risk to breakeven and banked partial profits. A violation of the current H1 channel support could draw in 1.23, which is likely viewed by many as the next take-profit target, with a break eyeing the top edge of H4 demand at 1.2257, perhaps representing a final take-profit level.

March 31st 2020: DXY Rebounds – Retrieves 99.00 To the Upside While G10 Peers Trade Subdued, FP Markets

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  • March 31st 2020: DXY Rebounds – Retrieves 99.00 To the Upside While G10 Peers Trade Subdued, FP Markets
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