November 18th 2020: Fourth Consecutive Bearish Close for DXY Underlines Daily support at 92.26

November 18th 2020: Fourth Consecutive Bearish Close for DXY Underlines Daily support at 92.26, 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 squared off around the upper section of supply from 1.1857/1.1352. Though 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 also still on the table.

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

Daily timeframe:

Brought forward from previous analysis –

Supply at 1.2012/1.1937 remains a key zone to be mindful of on the daily chart, active since May 2018. Another interesting feature to be aware of is an early falling wedge pattern between 1.2011 and 1.1612. Yet, do be aware some could interpret this arrangement as a descending triangle pattern.

In terms of support beyond the aforesaid pattern, 1.1553 and 1.1495 offer prominent levels.

RSI fans will also note the value recently rotated higher above 50.00, though remains rooted within the upper region of an ascending channel.

H4 timeframe:

Partly modified from previous analysis –

After welcoming demand at 1.1711/1.1746 last week, control was handed to buyers.

At the time of writing, price trades off session highs at 1.1893, though continues to highlight supply at 1.1928/1.1902 (prior demand).

H1 timeframe:

Heading into Afternoon trading in the US, down from session highs at 1.1893, buyers made a show ahead of demand at 1.1849/1.1857. Also underpinned by 1.1850 support, intraday buyers could target the 1.19 level today.

Observed levels:

Daily price is in the process of chalking up what appears to be a rather large falling wedge pattern, on a timeframe that’s mostly trended higher since early 2020. With scope to nudge higher until reaching the upper limit of the aforesaid pattern, and H4 showing room to attack supply from 1.1928/1.1902, H1 buyers off demand at 1.1849/1.1857 may take aim at 1.19 in early trading today.

November 18th 2020: Fourth Consecutive Bearish Close for DXY Underlines Daily support at 92.26, 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 the demand (up by 4 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:

Brought forward from previous analysis –

Supply at 0.7345/0.7287 (a rally-base-drop formation) remains under pressure as monthly buyers continue to flex off demand. Neighbouring supply at 0.7453/0.7384, extended from August 2018, therefore, could soon be thrown in the mix.

The RSI indicator continues to languish under overbought space, following the removal of 52.00 resistance at the beginning of November.

H4 timeframe:

Tuesday had price action cross paths with familiar resistance at 0.7340 (a horizontal level that’s held buyers back since the beginning of September), with the pair subsequently retreating and testing demand from 0.7281/0.7297. This was an area formed following a push out of a descending channel (0.7340/0.7252).

Buyers standing firm today, with enough force to break 0.7340, could possibly uncover another film of resistance at 0.7383.

H1 timeframe:

Following the retest of H4 resistance at 0.7340 on Tuesday, not only did the RSI oscillator test trendline support, buyers and sellers also squared off around the 0.73 level, albeit visiting lows at 0.7289. While this was likely sufficient to trip some protective stop loss orders and also fill a portion of breakout sellers’ orders sub 0.73, buyers appear to have accepted 0.73 as support.

Observed levels:

Partly modified from previous analysis –

Healthy buying off monthly demand at 0.7029/0.6664, in conjunction with what appears to be fragile daily supply from 0.7345/0.7287, the response from 0.73 support on the H1 and price responding from H4 demand could see buyers haul the currency pair back to at least H4 resistance at 0.7340 today.

November 18th 2020: Fourth Consecutive Bearish Close for DXY Underlines Daily support at 92.26, 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.

November, as you can see, is seen working through the lower edge of the aforesaid pattern, down by 0.4 percent.

104.62 ceding ground 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:

Partly modified from previous analysis –

Leaving behind supply from 106.33/105.78 and trendline resistance (111.68), as well as RSI resistance at 57.00, sellers have since made a strong show.

Downside risk remains as Tuesday wrapped up near session lows, throwing light on 103.17 lows (November 6), with a break revealing demand at 100.68/101.85, drawn from September 2016.

H4 timeframe:

Following the near-test of supply at 105.41/105.15 on Monday, support at 104.11 made an entrance Tuesday. Buyers, as you can see, have shown interest, though not much to write home about at the moment.

If buyers surrender, demand (taken from March 2020) at 103.04/103.58 is an interesting area to the downside.

H1 timeframe:

Tuesday’s depreciation established supply at 104.57/104.42 following the break of 104.50 support. This, as noted above, led to a test of 104.11 H4 support, secured just beneath the 104 handle.

It should also be noted the RSI oscillator paid a visit to oversold space.

Observed levels:

Higher timeframes reveal monthly price inching below descending triangle support at 104.62, in addition to daily price dropping to fresh weekly lows with scope to approach 103.17 lows (November 6).

With higher timeframe sellers in control, intraday buyers may struggle off the 104 region. With that being said, a H1 close below 104 today could deliver a bearish scene, with H1 support at 103.70, followed by the upper line of H4 demand at 103.58, targeted.

November 18th 2020: Fourth Consecutive Bearish Close for DXY Underlines Daily support at 92.26, 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 2.4 percent, 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 high 2018.

Daily timeframe:

Partly modified from previous analysis –

The deep fakeout above resistance at 1.3201 last week, with enough force to cripple most buy-stops, indicates buyers could be looking to step higher and target the 1.3483 September high.

In case sellers make a show, however, marking 1.2860 bottoms and demand at 1.2645/1.2773 could be an idea.

The RSI oscillator, thanks to the GBP/USD forming a third successive daily gain yesterday, is also on track to test overbought levels.

H4 timeframe:

Following the rebound from 1.3182 support, buyers now hover south of supply at 1.3320/1.3281, an area joined by channel resistance (1.3176) and a collection of Fib studies around 1.3307.

H1 timeframe:

Heading into London’s session on Tuesday, a 1.32 retest emerged, a move that attracted fresh buyers to peaks at 1.3272 and lured RSI action to an overbought high. Sustained buying today shines light on the 1.33 level, sheltered just under supply at 1.3339/1.3322 (fastened to the upper edge of H4 supply at 1.3320/1.3281), drawn from early September.

Another interesting aspect of the H1 chart is the possibility of a rising wedge pattern forming from 1.3109/1.3242 (blue).

Observed levels:

In similar fashion to Tuesday’s outlook, traders are likely watching for dip-buying scenarios to form, given lacklustre selling around daily resistance at 1.3201, together with room to run higher on the monthly timeframe.

Immediate upside targets fall in around the 1.33 level and H4 supply at 1.3320/1.3281, specifically the Fib levels around 1.3307.

November 18th 2020: Fourth Consecutive Bearish Close for DXY Underlines Daily support at 92.26, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • November 18th 2020: Fourth Consecutive Bearish Close for DXY Underlines Daily support at 92.26, FP Markets
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