October 16th 2020: DXY Engulfs 93.50 – Bid Amid Risk Aversion

October 16th 2020: DXY Engulfs 93.50 – Bid Amid Risk Aversion, FP Markets

EUR/USD:

Monthly timeframe:

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

August, as you can see, toppled supply from 1.1857/1.1352 and extended space north of long-term trendline resistance (1.6038), arguing additional upside may eventually be on the horizon, targeting trendline resistance (prior support – 1.1641). Despite this, before seeking higher territory, a dip to the recently penetrated trendline resistance (support) could materialise.

The primary downtrend (since July 2008) remains intact until 1.2555 is engulfed (Feb 1 high [2018]).

Daily timeframe:

Partially modified from previous analysis –

Supply at 1.1872/1.1818, a rally-base-drop configuration, is proving a tough nut to crack, an area positioned under another supply coming in from 1.2012/1.1937. Sustained downside has support at 1.1553 to target, arranged just under 1.1612 (September 21 low).

 

  • The trend on the daily timeframe has displayed a bullish vibe since March.

 

  • The RSI oscillator recently dipped from peaks around 58.00 and is on track to test trendline support (prior resistance).

 

H4 timeframe:

Channel resistance (1.1684), as you can see, was a dominant fixture in recent activity, persuading sellers to visit demand at 1.1682/1.1716.

Below 1.1682/1.1716, we seem starved of support until demand featured at 1.1580/1.1626.

H1 timeframe:

Heading into the US session Thursday, volatility dried up considerably as buyers and sellers squared off around the 1.17 level. Traders will note the round number is joined closely by a 61.8% Fib level at 1.1695 (green line) and a support level at 1.1684. What’s more, RSI bullish divergence is obvious.

Structures of Interest:

Absent of support on the daily timeframe, sellers appear to have the upper hand.

On the H4 and H1 timeframes, however, price movement is engaging with supportive structure. In light of this, an intraday recovery could develop today, with 1.1719/1.1735 on the H1 likely to be targeted.

Failure to hold gains could trigger a bearish response south of 1.1684 on the H1 timeframe, targeting 1.1650 support.

October 16th 2020: DXY Engulfs 93.50 – Bid Amid Risk Aversion, FP Markets

AUD/USD:

Monthly timeframe:

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

The month of September (lower by 2.9 percent) snapped a five-month winning streak and tested the upper border of demand at 0.7029/0.6664 (prior supply). From a structural standpoint, buyers appear to have the upper hand, 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, traders might want to take into account the primary downtrend (since mid-2011) remains south until breaking 0.8135 (January high [2018]).

Daily timeframe:

After failing to muster enough oomph to probe supply at 0.7345/0.7287 (a rally-base-drop supply), Thursday extended the recent retracement slide from peaks at 0.7243 and shed light on nearby demand at 0.6964/0.7042, an area fixed above support at 0.6931.

Another key observation on the daily chart is the RSI oscillator fading support-turned resistance at 52.00.

H4 timeframe:

As aired in Thursday’s technical outlook, the lack of buying seen out of demand at 0.7147/0.7170 questioned bullish commitment. The aforesaid area lost grip late Wednesday and set a bearish tone Thursday, which observed demand at 0.7073/0.7097 have its lower boundary taken out.

With sell-stops likely tripped under the aforesaid demand, despite the mild recovery into the close, additional bearish sentiment towards demand at 0.7014/0.7035 may be seen today.

H1 timeframe:

0.7050 support, as you can see, failed to make an entrance on Thursday, before the unit staged a mild-end-of-day pullback.

Territory above is interesting. 0.7105/0.7134 represents a supply zone, which is complemented by the 0.71 level, channel resistance (prior support – 0.7150) and a 38.2% Fib level at 0.7128. RSI fans will also note the value closing in on trendline resistance.

Structures of Interest:

Room seen for daily price to navigate lower until the top edge of demand at 0.7042, and H4 demand at 0.7073/0.7097 recently giving up position, places H1 supply from 0.7105/0.7134 in the frame, an area which sellers may view as a reversal zone today.

October 16th 2020: DXY Engulfs 93.50 – Bid Amid Risk Aversion, 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.

September, as you can see, tested the lower boundary of the aforesaid pattern and ended the month modestly off worst levels, with October now emphasising a hesitant tone.

Areas of interest outside of the triangle can be seen at supply from 126.10/122.66 and demand coming in at 96.41/100.81.

Daily timeframe:

Supply at 106.33/105.78, perhaps encouraged by the RSI oscillator also fading resistance at 57.00, remains dominant on the daily timeframe, with monthly support at 104.62 (the lower boundary of the monthly descending triangle) also on the radar.

H4 timeframe:

USD/JPY latched onto a relatively strong bid Thursday, backed by the DXY crossing above 93.50 in dominant fashion. This saw the pair extend recovery gains off demand at 104.92/105.09 and pull price to within a stone’s throw from supply at 105.52/105.69 (prior demand).

Traders, particularly those considering a bearish position out of current supply, are urged to pencil in the possibility of a whipsaw through the aforesaid supply to test the lower edge of daily supply at 105.78.

H1 timeframe:

After retesting support at 105.24, the US session observed buyers change gears, breaking through trendline resistance, taken from the high 105.79, and a 100-period simple moving average to top just ahead of 105.50 resistance.

The mild end-of-day correction has seen intraday activity retest the recently penetrated levels and, so far, hold ground.

Structures of Interest:

The H1 retesting supports, together with daily price exhibiting scope to approach at least 105.78 and H4 to 105.52, could spark an intraday advance in early Asia today.

A H1 close above 105.50 would indicate buyers are likely to drive through H4 supply at 105.52/105.69 to test H1 supply at 105.71/105.77 (prior demand).

October 16th 2020: DXY Engulfs 93.50 – Bid Amid Risk Aversion, FP Markets

GBP/USD:

Monthly timeframe:

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

Although leaving trendline resistance taken from 2.1161 unopposed, the month of September managed to fall 3.4 percent by way of a bearish outside reversal candle. This advertises a potential trendline support (prior resistance – 1.7191) retest.

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:

Brought forward from previous analysis –

Demand at 1.2645/1.2773 (and 200-day simple moving average at 1.2707) is an area worth highlighting on the daily timeframe, due to it being a location whereby a decision was made to break the 1.2813 peak (June 10).

Another area drawing attention is resistance at 1.3201.

RSI enthusiasts will also note the value recently met with 55.00 resistance.

H4 timeframe:

Sterling plunged against a broadly stronger US dollar on Thursday, losing more than 100 points into the close. As you can see, this has positioned the pair a few points ahead of familiar demand at 1.2836/1.2881, a clear drop-base-rally configuration.

Additional selling today, movement that dethrones the aforesaid demand, throws light on support at 1.2773.

H1 timeframe:

1.29 welcomed price action as we transitioned into the US session Thursday, and, alongside a 78.6% Fib level at 1.2894 and a nearby trendline support (prior resistance – 1.3007), held into the close.

Buyers, as you can probably see, offer a non-committal tone at the moment, emphasising the likelihood we may whipsaw through the round number and cross paths with neighbouring H4 demand at 1.2836/1.2881.

Structures of Interest:

Intraday, a whipsaw through 1.29, movement that taps H4 demand at 1.2836/1.2881 and prints a H1 close back above 1.29, may rejuvenate a GBP bid today towards at least 1.2950 resistance.

October 16th 2020: DXY Engulfs 93.50 – Bid Amid Risk Aversion, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • October 16th 2020: DXY Engulfs 93.50 – Bid Amid Risk Aversion, FP Markets
    • Articles
    • Views
    AUTHOR

    FP Markets

    FP Markets is an Australian regulated broker established in 2005 offering access to CFDs 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
Start Trading with a Global Broker

Archives

Archives

Categories


Start
Trading
in Minutes

Open an account now


October 16th 2020: DXY Engulfs 93.50 – Bid Amid Risk Aversion, FP Markets Access +10,000 financial instruments
October 16th 2020: DXY Engulfs 93.50 – Bid Amid Risk Aversion, FP Markets Auto open & close positions
October 16th 2020: DXY Engulfs 93.50 – Bid Amid Risk Aversion, FP Markets News & economic calendar
October 16th 2020: DXY Engulfs 93.50 – Bid Amid Risk Aversion, FP Markets Technical indicator & charts
October 16th 2020: DXY Engulfs 93.50 – Bid Amid Risk Aversion, FP Markets Many more tools included

By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.