Charts: Trading View
(Italics: previous analysis)
Prime support on the weekly timeframe resides at $1.1473-1.1583—sharing space with a 100% Fib projection at $1.1613 as well as a 1.27% Fib extension at $1.1550. Interestingly, long-term stops likely rest south of the $1.1640ish lows and perhaps accommodate enough energy to fill $1.1473-1.1583 bids. To the upside, the spotlight is on supply at $1.2412-1.2214. With respect to trend, we can see the market has largely been higher since the early months of 2020.
Meanwhile, a closer reading of price movement on the daily timeframe reveals Europe’s single currency fell sharply against a broadly energetic USD on Thursday. The buck clocked a fresh three-week top after US retail sales surprised to the upside, increasing by 0.7 percent in August (vs. minus 0.7 percent forecast). Technically, this seats Quasimodo support at $1.1689 back in the line of fire as a downside objective. Supporting further selling is the relative strength index (RSI) voyaging south of the 50.00 centreline; this informs traders average losses (over the 14-day lookback period) exceed average gains.
Recent hours nudged under support from $1.1764-1.1776, which, as you can see, is currently serving as resistance. Bearish forces confronting Quasimodo support at $1.1742 is not out of the question, which may energise a bullish showing to prime resistance at $1.1829-1.1804, an area potentially housing a healthy defence.
Lower on the curve, shorter-term flow made its way through Quasimodo support at $1.1775 amid early London hours Thursday, setting the stage to address a 1.272% Fibonacci projection at $1.1742 and neighbouring Quasimodo support at $1.1732.
The daily timeframe demonstrating some breathing space south until shaking hands with Quasimodo support at $1.1689 brings to light a bearish scene. While a retest of H1 resistance (previous Quasimodo support) at $1.1775 may occur, continuation selling from current levels is an option, targeting the H1 timeframe’s 1.272% Fibonacci projection at $1.1742—aligns with H4 Quasimodo support— and H1 Quasimodo support at $1.1732.
Albeit unlikely to make a show today, prime resistance on the H4 timeframe at $1.1829-1.1804 is a zone traders could have on their watchlists next week, particularly if bulls make an entrance off H4 Quasimodo support.
(Italics: previous analysis)
Prime support at $0.6968-0.7242 on the weekly timeframe is fighting to entice fresh bullish interest. Failure to command position opens up support at $0.6673. Should buyers regain consciousness, prime resistance at $0.7849-0.7599 calls for attention. With respect to trend, we’ve been higher since early 2020. Therefore, the response from $0.6968-0.7242 could STILL be a dip-buying attempt.
In the ‘shape’ of a bearish outside reversal, Thursday watched price breach the lower limit of prime support from $0.7286-0.7355. With the relative strength index (RSI) cementing position below the 50.00 centreline—telling traders that average losses over the 14-day lookback period surpass average gains—price action is now centred on Fibonacci support at $0.7057-0.7126.
Sellers assuming leadership yesterday hauled the currency pair through stacked demand on the H4 timeframe between $0.7282 and $0.7343, dropping to within a stone’s throw from prime support at $0.7236-0.7266 (glued to the upper edge of weekly prime support at $0.6968-0.7242). For those who read recent technical reports might recall the following (italics):
Prime support at $0.7236-0.7266 may interest bullish eyes—a base arranged to receive downside momentum derived from sell-stops below stacked demand.
The technical picture from the H1 timeframe reveals the unit slipped below $0.73 heading into US hours, establishing a decision point at $0.7308-0.7299 (structure seen clearer on M15). Also of technical relevance is Quasimodo resistance-turned support at $0.7271. Additional levels to be mindful of on the H1 are trendline resistance, extended from the high $0.7469, and Quasimodo resistance parked at $0.7339.
Focus is on the H4 timeframe’s prime support at $0.7236-0.7266, as buyers potentially gear up to take advantage of selling pressure (sell-stops) south of stacked demand.
Before reaching $0.7236-0.7266, nonetheless, traders are urged to pencil in a possible whipsaw above $0.73 into the H1 timeframe’s decision point at $0.7308-0.7299. This may provide enough to fuel moves to H1 Quasimodo resistance-turned support at $0.7271 (falls in just north of H4 prime support).
(Italics: previous analysis)
Since mid-July, ¥108.40-109.41 demand has failed to stir much bullish energy on the weekly timeframe. Nevertheless, recognising the area derives additional backing from neighbouring descending resistance-turned support, extended from the high ¥118.61, an advance could eventually emerge to familiar supply at ¥113.81-112.22.
The uninspiring vibe out of weekly demand is demonstrated by way of a clear-cut consolidation on the daily timeframe between prime support at ¥108.96-109.34 and resistance from ¥110.86-110.27. The reluctance to commit outside of these areas toughens the consolidation; range limits, therefore, are likely to remain on the watchlist.
A robust pickup in USD demand elevated USD/JPY on Thursday, pulling back to highs of ¥109.83. Overall, however, chart studies indicate a bearish vibe following the breach of a double-top pattern’s (¥110.44) neckline, drawn from ¥109.59. The pattern’s target sits around ¥108.71, plotted alongside a 1.618% Fibonacci projection at ¥108.86. Continued interest to the upside, nonetheless, is likely to close in on supply at ¥110.82-110.39—the base entertaining the noted double-top configuration.
From the H1 timeframe, a ¥109.84-109.79 decision point elbowed into the spotlight going into US trading on Thursday, prompting a shooting star candlestick pattern (frequently viewed as a bearish signal). Air space above the aforementioned zone channels focus towards the ¥110 figure, closely shadowed by prime resistance at ¥110.15-110.12. To the downside from current levels, Quasimodo resistance-turned support is seen at ¥109.45, followed closely by Quasimodo support at ¥109.31.
Recognising weekly demand in play at ¥108.40-109.41, joined by range support on the daily timeframe at ¥108.96-109.34, signals the H1 decision point at ¥109.84-109.79 is perhaps fragile and could lead to ¥110 making a show today.
Another option, of course, prior to reaching for higher levels, is a retracement to bring in buyers off either H1 Quasimodo resistance-turned support at ¥109.45, or Quasimodo support at ¥109.31.
(Italics: previous analysis)
In the shape of a hammer candlestick formation (bullish signal), supply-turned demand at $1.3629-1.3456 on the weekly timeframe stepped forward in July. The aforementioned zone remains active, welcoming an additional test mid-August. Yet, pattern traders will also note August’s move closed south of a double-top pattern’s neckline at $1.3664, broadcasting a bearish vibe. Conservative pattern sellers, however, are likely to pursue a candle close beneath $1.3629-1.3456 before pulling the trigger.
Britain’s pound journeyed south versus a stronger US dollar Thursday, pressured following August’s optimistic US retail sales figures. This helped reinforce a bearish setting beneath the 200-day simple moving average at $1.3828. This raises the possibility of further underperformance to Quasimodo support at $1.3609.
It was also aired in recent writing that the daily chart communicates a rangebound environment. Since late June, buyers and sellers have been squaring off between a 61.8% Fib retracement at $1.3991 and the noted Quasimodo support. Directly above the consolidation, two tight-knit 100% Fib projections are seen around $1.4017—a double AB=CD bearish configuration for any harmonic traders. Momentum studies, according to the relative strength index (RSI), made its way above the 50.00 centreline early September and retested the barrier (average gains exceed average losses).
H4 prime resistance at $1.3940-1.3888 has proved a stubborn area. Sellers have since strengthened their grip and has price fast approaching prime support at $1.3689-1.3724. This area may interest those looking at price taking out stops beneath lows around $1.3730 (blue oval).
Elsewhere. Short-term action based on the H1 chart has the pair circling the lower side of $1.38, as we write. Interestingly, supply at $1.3837-1.3812 lurks directly overhead and could help facilitate what many traders will recognise as a stop-run after the event. Chart space below $1.38 shifts attention to Quasimodo support from $1.3751.
Technical studies from the H4 timeframe suggests bears are likely to remain in the driving seat for the time being, at least until we touch gloves with prime support at $1.3689-1.3724. Prior to any downside move, H1 sellers may welcome a whipsaw north of $1.38 to supply at $1.3837-1.3812. Conservative sellers out of the aforesaid supply will perhaps wait for a DECISIVE H1 close to form beneath $1.38 before committing, targeting H1 Quasimodo support at $1.3751 and the upper edge of H4 prime support from $1.3724.
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