November 4th 2020: Technical Position Ahead of US Elections

November 4th 2020: Technical Position Ahead of US Elections, 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. Technically, although this argues additional upside may be on the horizon, targeting ascending resistance (prior support – 1.1641), September and October fashioning negative months proposes a dip to retest the recently penetrated trendline resistance (support).

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

Daily timeframe:

Leaving support from 1.1553 and a descending support line from 1.2011 behind, EUR/USD shifted to a bullish phase on Tuesday and snapped a six-day losing streak.

Supply from 1.1872/1.1818 demands attention should an extension come to light today, an area secured just beneath another supply extended from May 2018 at 1.2012/1.1937.

Traders will also note the RSI oscillator is seen turning higher from within a stone’s throw from trendline support (prior resistance).

H4 timeframe:

Demand at 1.1580/1.1626, an area extended from July of this year, proved effective once more, lifting Tuesday to beyond supply at 1.1682/1.1716 (likely tripping stops). Sustained enthusiasm today shines light on supply at 1.1760/1.1779 (prior demand).

H1 timeframe:

Passing over the 100-period simple moving average at 1.1680 led intraday above the 1.17 level to peaks at 1.1739. This was followed up with a 1.17 retest which, in the last hour, has seen bulls react following a hammer pattern.

Observed levels:

While higher timeframes communicate a possible bearish setting, with daily support at 1.1553 targeted, the 1.17 reaction on the H1 and seemingly fragile supply at 1.1682/1.1716 on the H4 voices an intraday bullish tone to at least 1.1750 resistance on the H1 (and lower edge of H4 supply at 1.1760).

November 4th 2020: Technical Position Ahead of US Elections, 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 recorded losses, with the latter down by nearly 2 percent. Developing a mild correction, longer-term action is addressing the upper border of demand at 0.7029/0.6664 (prior supply). Structurally speaking, despite recent losses, buyers still have a strong advantage, 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:

Buyers continued to charge higher ground on Tuesday out of demand at 0.6964/0.7042, ending the session a few pips shy of highs.

Trendline resistance (0.7413), as you can see, has come under pressure, with a break uncovering supply at 0.7345/0.7287, a rally-base-drop formation. Of note, though, we recently crossed above RSI resistance at 52.00.

H4 timeframe:

Demand at 0.6972/0.7004 (located within daily demand at 0.6964/0.7042, which itself is positioned around the upper boundary of monthly demand from 0.7029/0.6664), saw healthy buying emerge Monday and follow-through upside on Tuesday.

Shaped by way of three H4 bull candles we aggressively confronted supply at 0.7147/0.7170 (prior demand) yesterday, with enough oomph to test space beyond the area and point to resistance at 0.7210.

H1 timeframe:

After an early bounce from trendline support (0.6993), an acceleration to the upside took hold and cleared orders from 0.71 to breach 0.7150 resistance. US trading formed intraday demand at 0.7125/0.7143, which, as you can see, was later used to help facilitate a 0.7150 retest.

0.72 calls for attention should buyers make another play today.

Observed levels:

Monthly price bouncing from demand at 0.7029/0.6664, daily price forcefully taking on trendline resistance and H4 colliding with what appears to be a fragile supply at 0.7147/0.7170 promotes possible buying off 0.7150 support today (H1). As for targets, 0.72 on the H1 is a reasonable hurdle, sheltered under 0.7210 resistance on the H4.

November 4th 2020: Technical Position Ahead of US Elections, 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. July 2020 onwards, as you can see though, has had price toying with the lower boundary of the aforesaid pattern. Notably, both September and October traded south, with the latter finishing lower by 0.7 percent.

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:

Brought forward from previous analysis –

Since August, daily price has also been in the process of shaping a descending triangle pattern between 106.94/104.18. The lower edge of the monthly descending triangle (green – 104.62) also sits just north of the daily pattern’s lower border.

While breaking beneath the daily and monthly timeframe’s descending triangle supports (monthly currently under pressure) shifts focus back to daily demand at 100.68/101.85, we are seeing signs of recovery off the daily pattern’s lower base right now.

The RSI, since October 22, has essentially been motionless a touch ahead of oversold terrain.

H4 timeframe:

In recent trading, H4 greeted supply at 104.92/105.09 (prior demand) and modestly corrected lower on Tuesday. Despite some buying interest seen off 104.40, technical support appears limited on the H4 until we reach the 161.8% Fib projection level at 104.11 (blue).

Pursuing a northerly path, action that unseats the aforesaid supply, turns light to trendline resistance, taken from the high 106.10.

H1 timeframe:

104.50 proved a pivotal intraday support Tuesday, joined by the 100-period simple moving average and trendline support (104.02). The last hour, as you can see, produced a solid bullish candle, closing at highs. Increased USD demand today could target as far north as 105 and supply from 105.21/105.11 (prior demand).

Observed levels:

As monthly and daily price engage with their respective descending triangle supports, an upside push from 104.50 support on the H1 timeframe (and intersecting trendline support) could be seen to the 105 area.

November 4th 2020: Technical Position Ahead of US Elections, 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 a lacklustre October, 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:

Following Monday’s hammer pattern ahead of demand at 1.2645/1.2773 (and a corresponding 200-day simple moving average), Tuesday finished higher by 1 percent, with early trade this morning already up by 0.4 percent, eyeing resistance at 1.3201.

Also noteworthy on this timeframe is the RSI oscillator seen rebounding from 47.00 support.

H4 timeframe:

Cable is on a tear this morning, extending Tuesday’s gains. After toppling supply at 1.3063/1.3020 we’re now closing in on supply at 1.3116/1.3160 (prior demand).

H1 timeframe:

As of current price, action is testing the mettle of the 1.31 level, with a break perhaps clearing the river north to supply at 1.3144/1.3126.

Note, however, the RSI is fast approaching a strong resistance level around the 82.00 region.

Observed levels:

H1 supply at 1.3144/1.3126, owing to the area sitting inside H4 supply at 1.3116/1.3160, could halt upside, as traders attempt to sell into buy-stops above 1.31 on the H1.

November 4th 2020: Technical Position Ahead of US Elections, 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 4th 2020: Technical Position Ahead of US Elections, FP Markets
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