September 23rd 2020: USD/JPY Establishing Support from Monthly Descending Triangle Base

September 23rd 2020: USD/JPY Establishing Support from Monthly Descending Triangle Base, FP Markets

EUR/USD:

Monthly timeframe:

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

August saw the euro nudge to a fourth successive monthly gain against the US dollar, adding nearly 1.5 percent.

The move toppled supply from 1.1857/1.1352 and extended space north of long-term trendline resistance (1.6038), arguing additional upside may be on the horizon, targeting trendline resistance (prior support – 1.1641). Despite this, the primary downtrend (since July 2008) remains intact until 1.2555 is engulfed (Feb 1 high [2018]).

Trading in September, however, is down more than 1.9 percent.

Daily timeframe:

Tuesday saw the euro trade half a percent lower to the dollar, falling through channel support from 1.1695. Fracturing the aforesaid limit signals a possible continuation to support at 1.1553, with a break uncovering clear demand at 1.1369/1.1450.

With respect to the RSI oscillator, we remain inside a (near) two-month descending channel formation, currently challenging the lower boundary.

H4 timeframe:

The US dollar booked additional gains yesterday, coercing EUR/USD beneath support at 1.1753 into the parapets of demand seen at 1.1682/1.1716 (extended from July), an area sharing space with a 127.2% Fib ext. level at 1.1690.

Removing the aforesaid demand may liberate sellers to a 161.8% Fib ext. level at 1.1628, located just ahead of demand at 1.1580/1.1626.

H1 timeframe:

Downside momentum slowed considerably mid-way through the US session on Tuesday after meeting 1.17, following a breach of support at 1.1722. While the RSI suggests bullish divergence, buyers from 1.17 face not only 1.1722 resistance, 1.1750 resistance is also possible, with a break directing the pair towards supply at 1.1798/1.1776.

Beyond 1.17, nonetheless, demand sits at 1.1640/1.1657.

Structures of Interest:

Monthly price is struggling to sustain gains north of supply at 1.1857/1.1352, while daily price indicates further losses are in the offing after breaking channel support.

H4 demand at 1.1682/1.1716 is active, yet H1 buyers have their work cut out for them off 1.17, in regards to neighbouring resistances.

Ducking under 1.17 ignites possible bearish cues, with H1 demand at 1.1640/1.1657 targeted. However, selling here, although clear on the daily timeframe, faces possible opposition from H4 demand at 1.1682/1.1716.

September 23rd 2020: USD/JPY Establishing Support from Monthly Descending Triangle Base, FP Markets

AUD/USD:

Monthly timeframe:

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

August’s 3.3% gain extended space north of supply at 0.7029/0.6664 and long-term trendline resistance (1.0582). Technically, buyers appear 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). The month of September is on track to snap a five-month winning streak, currently trading down 2.8 percent.

While price has indeed removed trendline resistance and supply, traders might still want to take into account the primary downtrend (since mid-2011) remains south until breaking 0.8135 (January high [2018]).

Daily timeframe:

Partially altered from previous analysis –

AUD/USD pushed through a third successive daily loss on Tuesday, forcing price action deep into demand at 0.7131/0.7192 (a drop-base-rally area).

Support at 0.7067 is seen should we push through the aforesaid demand.

The trend, according to the daily timeframe, has emphasised a positive tone since bottoming in late March.

Traders may also recognise the RSI trades south of 53.00, a clear S/R level since October 2019.

H4 timeframe:

Unable to find grip off demand at 0.7186/0.7207, hampered by a trendline support (prior resistance – 0.7076), Tuesday consumed the zone and squeezed to lows at 0.7154.

Recent action, as you can see, threw light on demand at 0.7119/0.7134, aligning with a 127.2% Fib level.

H1 timeframe:

Supply at 0.7223/0.7236 (prior demand) did a superb job in holding back buyers yesterday, enough to dethrone 0.72 and test levels ahead of 0.7150 support.

With reference to the RSI, we recently exited oversold terrain after tapping lows at 20.40 and are currently exhibiting bullish divergence.

Structures of Interest:

Intraday, room to nudge lower is seen. H4 demand at 0.7119/0.7134 represents the next support target, while on the H1 we have 0.7150 support.

Longer term, daily price is testing the range of demand at 0.7131/0.7192, though monthly price suggests we may push lower and retest demand at 0.7029/0.6664 (prior supply).

0.7178 H1 resistance may hold active sellers, as might 0.72. Both levels are likely watched today, in light of the overall technical picture.

September 23rd 2020: USD/JPY Establishing Support from Monthly Descending Triangle Base, 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. As you can see, though, price is currently testing the lower boundary of the aforesaid pattern.

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

Daily timeframe:

Extending the recovery off monthly support at 104.62 (the lower boundary of the monthly descending triangle), traders can see daily price now hovers just south of a supply at 105.10/105.29.

The RSI is seen bottoming ahead of oversold levels and on track to test 50.00.

H4 timeframe:

USD/JPY staged an impressive recovery at the beginning of the week from a 161.8% Fib ext. level at 104.12, positioned ahead of another 161.8% Fib ext. point at 103.90. Monday’s advance, coupled with follow-through buying seen on Tuesday, elbowed the pair into supply at 105.06/105.30, an area boasting a reasonably solid history.

H1 timeframe:

104.50 served as strong support Tuesday, providing a platform in which buyers could pull price through resistance at 104.82 and test 105, as well as lift the RSI value to within close proximity of overbought space.

Directly above 105, price is tipped to greet supply at 105.23/105.14, sheltered closely by an ABCD bearish formation at 105.30 (and 2.0 BC projection at 105.34).

Structures of Interest:

The H1 ABCD bearish pattern at 105.30 will likely interest sellers today. Not only will a test of the level have buy stops above H1 supply at 105.23/105.14 to work with, the ABCD formation marks the upper edge of daily and H4 supply.

Sellers from 105.30, however, must take into account that price is trading from a monthly support at 104.62, therefore, downside could be short-lived.

September 23rd 2020: USD/JPY Establishing Support from Monthly Descending Triangle Base, 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 taken from 2.1161 unopposed, September currently trades lower by 4.8 percent, on track to retest trendline support (prior resistance – 1.7191).

Interestingly, the primary trend has faced lower since early 2008, unbroken until 1.4376 gives way – April 2 high 2018.

Daily timeframe:

Shaped by way of three successive daily bearish candles established out of supply at 1.3021/1.2844, price is now seen engaging with the 200-day simple moving average at 1.2721, housed within demand at 1.2645/1.2773. Violating the aforesaid demand potentially charts the way back to another demand placed at 1.2192/1.2361.

The RSI indicator is currently drawing up a bottoming phase ahead of oversold levels.

H4 timeframe:

Support at 1.2742, albeit initially generating interest from buyers, appears to be hanging on by a thread, threatening moves to demand at 1.2646/1.2685. Recovery from 1.2742 could find supply at 1.2876/1.2840 makes an entrance.

H1 timeframe:

Mid-morning US witnessed downside momentum subside ahead of the 1.27 level, with 1.2750 resistance resting just above. Am attempt at recovery today, moves that topple 1.2750, shines light on 1.28 and uniting trendline resistance (1.2966).

Structures of Interest:

The combination of H4 resistance at 1.2742 and 1.2750 resistance on the H1 timeframe pulls across a reasonably strong wall.

Aside from the above, 1.28 on the H1, in particular at the point it aligns with trendline resistance, offers another potential wall of resistance to consider should buyers push for levels above 1.2750.

September 23rd 2020: USD/JPY Establishing Support from Monthly Descending Triangle Base, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • September 23rd 2020: USD/JPY Establishing Support from Monthly Descending Triangle Base, FP Markets
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