1. Home
  2. »
  3. Technical Analysis
  4. »
  5. November 10th 2020: Vaccine...

November 10th 2020: Vaccine Optimism Elevates Risk Assets and Weighs on Havens

November 10th 2020: Vaccine Optimism Elevates Risk Assets and Weighs on Havens, FP Markets

EUR/USD:

Monthly timeframe:

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

Following the break of long-term trendline resistance (1.6038) in July, buyers and sellers have since been squaring off around the upper section of supply from 1.1857/1.1352. Whilst this argues additional upside may be on the horizon, targeting ascending resistance (prior support – 1.1641), a dip to retest the recently penetrated trendline resistance (support) is still on the table.

The primary downtrend (since July 2008) remains intact until 1.4940 is engulfed (May 2 high [2011]).

Daily timeframe:

After discovering strong support off September’s low at 1.1612 (confirmed by RSI bullish divergence) last week, EUR/USD encountered opposition Monday, establishing a healthy bearish candle ahead of supply at 1.2012/1.1937, extended from May 2018.

An extension to the recent corrective slide, once again, shines light on September’s low at 1.1612, together with support close by at 1.1553.

Despite Monday’s correction, RSI fans will note we remain hovering above 50.00.

H4 timeframe:

Feeding off supply from 1.1928/1.1902 (prior demand), sellers pencilled in a strong position on Monday with enough force to perhaps punch into demand from 1.1760/1.1779.

H1 timeframe:

1.19 proved effective resistance as the week kicked off, withstanding an aggressive bullish attempt heading into the US session.

US traders smothered EUR/USD bids and reclaimed 1.1850 support, a move shining light on an interesting collection of supports: 1.18 level, trendline support (prior resistance – 1.1880), the 100-period simple moving average and demand at 1.1764/1.1776.

Also an interesting feature on the H1 chart is the RSI recently rebounding off its oversold level.

Observed levels:

While buyers may come in off 1.18, H4 suggests a dip through this angle today might be in the offing to test H1 demand at 1.1764/1.1776, which aligns with H4 demand at 1.1760/1.1779. It is here the chart may witness a bullish intraday scene unfold.

November 10th 2020: Vaccine Optimism Elevates Risk Assets and Weighs on Havens, FP Markets

AUD/USD:

Monthly timeframe:

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

The months of September and October, as you can see, developed a mild correction and addressed the upper border of demand at 0.7029/0.6664 (prior supply). Buyers have so far responded well from demand (up by 3.3 percent in November), free to explore as far north as 0.8303/0.8082 in the coming months, a supply zone aligning closely with trendline resistance (prior support – 0.4776).

In terms of trend, though, the primary downtrend (since mid-2011) remains south until breaking 0.8135 (January high [2018]).

Daily timeframe:

Partially modified from previous analysis –

Although demonstrating a range between 0.7340/0.7266, Monday finished considerably off best levels and fashioned a shooting star candlestick formation from supply at 0.7345/0.7287, a rally-base-drop formation. Attention should also be drawn to supply seated just above at 0.7453/0.7384, taken from August 2018, as well as the RSI indicator approaching overbought territory after brushing aside resistance at 52.00.

The daily supply highlighted above could potentially hinder upside going forward, despite the 7-month long uptrend, with demand at 0.6964/0.7042 seen as a possible target.

H4 timeframe:

In the space of two candles, H4 whipsawed above supply at 0.7324/0.7282 and tested resistance from 0.7340, throwing light on demand at 0.7253/0.7237 (prior supply) and also support at 0.7210.

H1 timeframe:

Monday’s volatility shaped a potential head and shoulder’s top pattern, with the peak (the head) formed off Monday’s session high at 0.7340 (and resistance at 0.7324) and a neckline positioned from 0.7267. A break beneath the pattern’s neckline today could fuel moves to the 0.72 region (as well as nearby trendline support [0.6993], and the 100-period simple moving average]), though this would entail breaking through H4 demand at 0.7253/0.7237.

It might also interest some readers to take note that the RSI oscillator is seen hovering ahead of support at 42.48.

Observed levels:

Partially modified from previous analysis –

On one side of the field, Monthly price is rebounding from demand at 0.7029/0.6664, while on the other side daily sellers potentially prepare for countertrend strategies off supply at 0.7345/0.7287.

H1 is establishing a head and shoulder’s top pattern, yet in order to hit the pattern’s take-profit at around 0.72, this involves dethroning H4 demand at 0.7253/0.7237.

November 10th 2020: Vaccine Optimism Elevates Risk Assets and Weighs on Havens, 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.

Notably, November, up by 0.6 percent, is seen rebounding from the lower edge of the aforesaid pattern. However, 104.62 giving way shines light on demand from 96.41/100.81, followed by trendline support (76.15) and the descending triangle’s take-profit level at 91.04 (red).

Daily timeframe:

Thanks to Monday’s 2-percent advance, supply at 106.33/105.78 and intersecting trendline resistance (111.68) is now within close range. On top of this, RSI resistance at 57.00 is positioned a short distance from current action.

H4 timeframe:

Monday’s rapid ascent from demand at 103.04/103.58 ousted trendline resistance (106.10) and connected with a supply area from 105.79/105.57.

Sellers holding supply may persuade a test of demand at 104.84/105.07, an area uniting with the aforesaid trendline.

H1 timeframe:

Heading into the closing stages of Monday’s session, price mildly pared gains off resistance at 105.62 and 105.50 resistance, opening the door to the 105 level and demand at 104.74/104.96 (set just above a 38.2% Fib level at 104.69).

RSI movement also tested resistance high within overbought territory at 86.43, a level not seen since June 2020.

Observed levels:

Monthly price could hold off the descending triangle support at 104.62, though buyers may find opposition from daily supply at 106.33/105.78 (and trendline resistance).

H4 and H1 timeframes, nevertheless, both show room to decline to around 105, with H4 demand targeted at 104.84/105.07 (H1 demand glued to its underside at 104.74/104.96). A bullish scene from the aforesaid demands, therefore, may be seen.

November 10th 2020: Vaccine Optimism Elevates Risk Assets and Weighs on Havens, FP Markets

GBP/USD:

Monthly timeframe:

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

Leaving trendline resistance (2.1161) unopposed, the month of September fell 3.4 percent by way of a bearish outside reversal candle and snapped a three-month winning streak. This, despite November trading higher by 1.7 percent at the moment, advertises a possible dip to retest trendline support (prior resistance – 1.7191).

In terms of trend, the primary trend has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way – April 2 high 2018.

Daily timeframe:

Partially modified from previous analysis –

Monday finished by way of an indecision candle after crossing paths with resistance 1.3201.

In spite of Monday’s indecisive start, the fact sellers failed to retest demand at 1.2645/1.2773 on the previous correction from 1.3176 shows what could be interpreted as seller weakness. A 1.3201 resistance break, therefore, lights up the 1.3483 September peak as possible resistance.

The RSI oscillator, as you can probably see, continues to hold off 47.00 support and is making its way towards overbought surroundings.

H4 timeframe:

Partially modified from previous analysis –

After taking hold of last Wednesday’s session high at 1.3140, the candles recently tested a 61.8% Fib level at 1.3172 (green) and resistance area from 1.3201 and 1.3170. Traders will note the upper edge of the H4 zone also represents daily resistance.

1.3320/1.3281 is seen as the next possible supply zone should buyers gain momentum, though a bearish showing from 1.3201/1.3170 has support in sight at 1.3078.

H1 timeframe:

Supply from 1.3239/1.3199, an area that sits on top of the round number 1.32, as well as the daily resistance from 1.3201 and also H4 resistance at 1.3201/1.3170, made an entrance on Monday.

Below 1.31, the 100-period simple moving average is seen nearby, with a break pointing to trendline support (1.2854).

In terms of the RSI oscillator, we can see Monday responded from trendline support.

Observed levels:

Partially modified from previous analysis –

Lacklustre selling beneath daily resistance at 1.3201 and room for monthly price to move higher could eventually have buyers run through 1.3201.

Shorter-term charts, however, display strong confluence around the 1.32 level. As underlined above, H1 supply is seen at 1.3239/1.3199, daily resistance can be found at 1.3201 and a H4 resistance zone forms at 1.3201/1.3170. Monday’s reaction from H1 supply, therefore, is not surprising, and could still have sellers reach for the 1.31 level. Ultimately, though, higher timeframe activity indicates a break to higher levels.

November 10th 2020: Vaccine Optimism Elevates Risk Assets and Weighs on Havens, FP Markets

  • November 10th 2020: Vaccine Optimism Elevates Risk Assets and Weighs on Havens, FP Markets
    • Articles
    • Views
    AUTHOR

    FP Markets

    FP Markets is an Australian regulated broker established in 2005 offering access to Derivatives across Forex, Indices, Commodities, Stocks & Cryptocurrencies on consistently tighter spreads in unparalleled trading conditions. FP Markets combines state-of-the-art technology with a huge selection of financial instruments to create a genuine broker destination for all types of traders.

    PROFILE