October 19th 2021: GBP/USD Eyes Resistance Between $1.3810 and $1.3785

October 19th 2021: GBP/USD Eyes Resistance Between $1.3810 and $1.3785, FP Markets

Charts: Trading View

EUR/USD:

(Italics: previous analysis)

Weekly timeframe:

Buyers and sellers continue to battle for position around the upper region of prime support at $1.1473-1.1583.

As you can see, buyers marginally have the upper hand right now, potentially fuelled on the back of long-term sell-stops tripped beneath lows at $1.1612 (2020). $1.1981-1.1848 supply is recognised as the next upside objective on this scale.

In the event buyers fail to agree higher prices, south of current support shines the technical spotlight on a 61.8% Fibonacci retracement at $1.1281.

Daily timeframe:

Resistance from $1.1614 came under fire Monday, disregarding back-to-back shooting star candle patterns decorating the chart at the tail end of last week.

Elbowing north of current resistance shines light on Quasimodo support-turned resistance at $1.1689. Overthrowing $1.1614 and securing position would likely be joined alongside the relative strength index (RSI) climbing the 50.00 centreline: informing traders that average gains exceed average losses.

In terms of trend, sentiment has favoured downside since June.

H4 timeframe:

Sharing chart space with the daily timeframe’s resistance at $1.1614, H4 resistance falls in at $1.1622—a particularly standout level since September 2020.

Understanding daily resistance is under siege, in addition to the H4 timeframe also recently rupturing trendline resistance, extended from the high $1.1846, buyers strengthening their grip here and taking aim at resistance from $1.1665 should not surprise. Note the latter closely corresponds with a 61.8% Fibonacci retracement at $1.1668, a 38.2% Fibonacci retracement at $1.1672 and a 100% Fibonacci projection at $1.1673.

Lower, aside from yesterday’s session trough at $1.1572, you will note support at $1.1563.

H1 timeframe:

Touching gloves with Fibonacci support between $1.1574 and $1.1580 on Monday, EUR/USD bulls went on the offensive. Lifted amid USD downside—DXY off best levels and contemplating consuming daily support at 93.90—the currency pair rose to familiar supply at $1.1628-1.1615.

Upstream, October 4th high is at $1.1640, followed by H4 resistance at $1.1665 and then $1.17.

Observed Technical Levels:

Powered by weekly prime support at $1.1473-1.1583, daily and H4 resistances at $1.1614 and $1.1622, respectively, are perhaps in trouble. This informs traders H1 supply at $1.1628-1.1615 may step aside and price could attempt to run for H4 resistance at $1.1665, and with a little oomph, maybe daily resistance at $1.1689 and $1.17 on the H1.

October 19th 2021: GBP/USD Eyes Resistance Between $1.3810 and $1.3785, FP Markets

AUD/USD:

(Italics: previous analysis)

Weekly timeframe:

As you can see, price extended recovery gains north of prime support at $0.6968-0.7242 last week, and finished a touch off session highs. Prime resistance at $0.7849-0.7599 represents a reasonable target, though failure to preserve gains opens up support at $0.6673.

Trend studies on the weekly scale show we’ve been higher since early 2020. Consequently, the response from $0.6968-0.7242 might be the start of a dip-buying attempt to join the current trend.

Daily timeframe:

Closely resembling Friday, AUD/USD concluded Monday unchanged, a touch off monthly pinnacles at $0.7440.

Prime resistance at $0.7506-0.7474 is in the crosshairs. Immediately above, we have Quasimodo support-turned resistance at $0.7621, joined closely with the 200-day simple moving average at $0.7567, as well as a 61.8% Fibonacci retracement at $0.7585 and a 100% Fibonacci projection at $0.7551.

As momentum continues to gain traction, traders are urged to note the relative strength index (RSI) zeroing in on overbought territory. Indicator resistance is seen at 74.80.

H4 timeframe:

Albeit surrendering to a low of $0.7379 on Monday, Quasimodo resistance-turned support at $0.7394 eventually held ground.

According to the H4 scale, this left the candles within striking distance of $0.7426 resistance, and nearby Quasimodo resistance at $0.7441.

H1 timeframe:

For those who read the weekly market insight you may recall the following (italics):

Having noted the bigger picture exhibiting scope to explore higher levels, H4 resistances between $0.7441 and $0.7426, along with H1 prime resistance at $0.7450-0.7433, could be fragile.

As such, between the H1 decision point at $0.7382-0.7391 and $0.74 (an area including H4 support from $0.7394) might welcome a bullish phase if tested this week.

As evident from the chart, $0.7382-0.7391 and trendline support provided the currency pair a floor to work with on Monday. The question is, although the unit is comfortably north of $1.16, is this sufficient to take on prime resistance from $0.7450-0.7433?

Observed Technical Levels:

Recognising weekly price making headway from prime support at $0.6968-0.7242, along with scope to navigate higher levels on the daily timeframe to prime resistance at $0.7506-0.7474, follow-through buying could be on the menu.

What this implies is H4 price may overrun resistances between $0.7441 and $0.7426, and H1 nudge through prime resistance at $0.7450-0.7433.

October 19th 2021: GBP/USD Eyes Resistance Between $1.3810 and $1.3785, FP Markets

USD/JPY:

(Italics: previous analysis)

Weekly timeframe:

Nestled at the underside of resistance from ¥114.38, USD/JPY registered its sixth consecutive bullish close last week and touched a three-year peak of ¥114.47.

A decisive reaction from current resistance sets the stage for bringing in support at ¥112.16.

In terms of trend, we’ve been advancing since the beginning of this year.

Daily timeframe:

Sporting a narrow range between ¥114.45 and ¥114.02, Monday wrapped up in the shape of an indecision candle south of a Fibonacci cluster. Made up of two 1.272% Fibonacci projections at ¥114.63 and ¥114.61, together with a deep 78.6% Fibonacci retracement at ¥114.94, this area, along with weekly resistance highlighted above at ¥114.38, is a potential headwind for the currency pair.

From the relative strength index (RSI), following support emerging from 56.85 (prior range resistance), the indicator’s value continues exploring overbought space. However, with the trend facing northbound this year, overbought signals should be viewed in this context.

H4 timeframe:

Following Friday’s break above the upper limit of an ascending triangle (low: ¥113 high: ¥113.79 [generally viewed as a bullish continuation structure]), price came within touching distance of reaching the formation’s profit objective (thick black arrows) at ¥114.64. Adding to this, technicians will note that weekly resistance is involved at ¥114.38, together with H4 channel resistance, extended from the high ¥112.05.

Holding beneath the aforementioned resistances points to a retest of the upper side of the ascending triangle, with subsequent selling interest directing light towards channel support, pencilled in from the low ¥109.12. Alternatively, scaling higher pulls daily resistance in the frame between ¥114.94 and ¥114.61.

H1 timeframe:

Sitting just above the H4 timeframe’s ascending triangle on the H1 timeframe is a decision point from ¥113.84-113.96, and the ¥114 psychological level, with the latter serving well as support in recent candles.

Lower on the curve, another decision point area is evident at ¥113.59-113.70. Upstream, you will note a 1.618% Fibonacci projection coming in at ¥114.49.

Observed Technical Levels:

Weekly resistance at ¥114.38 deserves mention, as does the daily timeframe’s Fibonacci cluster between ¥114.94 and ¥114.61. Consequently, profit taking could materialise between ¥114.94 and ¥114.38.

In similar fashion to the bigger picture, a healthy cocktail of resistance is evident on H4 and H1 timeframes. Between the H4 ascending triangle profit objective at ¥114.64, the H4 channel resistance at ¥114.38 and the H1 1.618% Fibonacci projection at ¥114.49, traders have clear short-term resistance to work with within the higher timeframe resistance zone noted above between ¥114.94 and ¥114.38.

October 19th 2021: GBP/USD Eyes Resistance Between $1.3810 and $1.3785, FP Markets

GBP/USD:

(Italics: previous analysis)

Weekly timeframe:

While late September probed the lower wall of supply-turned demand at $1.3629-1.3456, the first half of October has entertained a bullish atmosphere, with last week’s session climbing 1.0 percent.

While we cannot rule out the possibility of further upside, technical elements suggest sellers could eventually strengthen their grip. Not only did price drop beneath $1.3629-1.3456, the unit also closed below a double-top pattern’s ($1.4241) neckline at $1.3669.

The double-top pattern’s profit objective—measured by taking the distance between the highest peak to the neckline and extending this value lower from the breakout point—sits around $1.3093. Conservative pattern sellers are likely to pursue a candle close beneath $1.3629-1.3456 before pulling the trigger.

Daily timeframe:

Helping to discourage additional buying in this market is trendline resistance, taken from the high $1.4250, and the 200-day simple moving average at $1.3842. The combination of the two offers powerful confluence.

The relative strength index (RSI) secured position above the 50.00 centreline last week, with the indicator currently hovering just under resistance at 58.70. Removing the latter places overbought space in the firing range.

H4 timeframe:

Despite printing a mild retracement Monday, erasing 0.1 percent, the technical radar remains fixed on Fibonacci resistance between $1.3807 and $1.3785, positioned beneath channel resistance, extended from the high $1.3640.

What’s also technically interesting is the daily timeframe’s trendline resistance aligns closely with H4 structure. Any bearish showing from the noted resistance combination has support in view at $1.3657 and channel support, taken from the low $1.3415.

H1 timeframe:

The technical position on the H1 scale has price movement drifting above the $1.37 figure and a 38.2% Fibonacci retracement at $1.3695. Should GBP/USD maintain Monday’s session low of $1.3709, taking on resistance at $1.3764 is an option, followed by an extension to the $1.38 figure. Note that above here, a tight Fibonacci cluster resides at $1.3810ish.

Observed Technical Levels:                              

Although we have seen buyers enter the frame this month from supply-turned demand at $1.3629-1.3456 on the weekly scale, traders are urged to monitor the daily timeframe’s trendline resistance, taken from the high $1.4250, as well as the 200-day simple moving average at $1.3842. This combination suggests strong confluence, and therefore possible resistance.

Fibonacci resistance between $1.3807 and $1.3785 on the H4 timeframe is likely on the watchlists for many price action traders. Not only does the area bring channel resistance to the table, the H4 zone dovetails closely with daily trendline resistance, in addition to the H1 timeframe’s resistance formed between $1.3810 and $1.38.

Therefore, in light of the above analysis, a break of H1 resistance at $1.3764 to test $1.38 could come to fruition, where, according to chart studies on the daily, H4 and H1, sellers will be closely watching resistance between $1.3810 and $1.3785.

October 19th 2021: GBP/USD Eyes Resistance Between $1.3810 and $1.3785, 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 19th 2021: GBP/USD Eyes Resistance Between $1.3810 and $1.3785, FP Markets
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