September 30th 2020: Greenback Extends Downside Ahead of US Presidential Debate

September 30th 2020: Greenback Extends Downside Ahead of US Presidential Debate, 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 be on the horizon, targeting trendline resistance (prior support – 1.1641).

Trading in September, however, is down more than 1.6 percent, on track to snap a four-month winning streak and retest broken trendline resistance.

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

Daily timeframe:

Partially altered from previous analysis –

Leaving behind support at 1.1553, EUR/USD established a bottom Monday, with strong follow-through buying emerging on Tuesday.

The currency pair’s technical position is now tipped for more outperformance until making contact with channel resistance (1.1695).

The RSI oscillator, after rotating just north of oversold levels at the beginning of the week, is currently hovering just beneath the 50.00 region.

H4 timeframe:

The spirited recovery seen so far this week out of demand at 1.1580/1.1626, sponsored by a waning buck, made quick work of supply at 1.1682/1.1716 (prior demand).

1.1753 resistance is tipped to make an entrance today, sheltered just under a 38.2% Fib level at 1.1764. A break of the latter creates space to test trendline resistance (1.2011).

H1 timeframe:

Heading into afternoon trading in London on Tuesday, a break of 1.17 unfolded, swiftly followed up with a retest that propelled candle action north of resistance at 1.1719. After a retest of the level, buyers concluded Tuesday consolidating gains just ahead of 1.1750 resistance. Above 1.1750, supply is visible at 1.1798/1.1776, sheltered under the 1.18 level.

In terms of the 100-period simple moving average, Monday, as you can see, closed above the dynamic value. With respect to the RSI indicator, the line entered overbought status and has recently established a trendline support.

Structures of Interest:

Despite testing above monthly supply at 1.1857/1.1352, September’s depreciation echoes the possibility of further declines to retest the recently penetrated monthly trendline.

The above, together with daily price honing in on channel resistance, could have H4 action reject resistance at 1.1753/38.2% Fib level at 1.1764. Before sellers make a stand, though, H1 supply nearby at 1.1798/1.1776 could be tested.

September 30th 2020: Greenback Extends Downside Ahead of US Presidential Debate, 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 (lower by 3.3 percent), however, is on the brink of snapping a five-month winning streak with price currently retesting 0.7029/0.6664.

In addition to the above, traders might want to take into account the primary downtrend (since mid-2011) remains south until breaking 0.8135 (January high [2018]).

Daily timeframe:

Arranged by way of back-to-back gains out of demand at 0.6964/0.7042, mapped just ahead of support at 0.6931, price is currently seen crossing paths with supply at 0.7131/0.7192 (prior demand).

The trend, according to the daily timeframe (and also the 200-day simple moving average), has emphasised a positive tone since bottoming in late March. Traders may also recognise the RSI recently rebounded from oversold turf and on course to retest 53.00 resistance.

H4 timeframe:

Resistance at 0.7080, as you can see, was retested as support in early trade Tuesday, leading to supply at 0.7119/0.7134 (prior demand) making an entrance, closely tailed by a fresh supply coming in from 0.7177/0.7154.

H1 timeframe:

After trading above the 100-period simple moving average late Monday, Tuesday gathered traction and toppled 0.71 going into European trading, which led to supply at 0.7148/0.7135 making a show.

Areas of interest above the aforesaid supply are 0.7150 resistance and supply at 0.7178/0.7163, a rally-base-drop formation.

In terms of where we stand concerning the RSI indicator, the value exited overbought territory on Tuesday, yet struggled to discover deeper water, hindered by support at 61.10.

Structures of Interest:

 

  • Monthly price testing 0.7029/0.6664 as demand prompts a longer-term bullish theme.

 

  • Daily price tests supply at 0.7131/0.7192.

 

  • H4 action exhibits a fragile tone around supply at 0.7119/0.7134, pointing to a possible test of supply at 0.7177/0.7154 (located within daily supply at 0.7131/0.7192).

 

  • H1 also testing supply at 0.7148/0.7135 (positioned just above H4 supply at 0.7119/0.7134).

 

On account of the above, short-term action could have sellers make a show, though it may be short-lived having seen monthly price trading from demand.

September 30th 2020: Greenback Extends Downside Ahead of US Presidential Debate, 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.

Notably, September tested the lower boundary of the aforesaid pattern and is on course to end the month off worst levels.

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 –

Recent recovery gains off monthly support at 104.62 (the lower boundary of the monthly descending triangle) invites the prospect of additional bullish sentiment towards trendline resistance (111.71) and nearby supply at 107.58/106.85.

The RSI, for those who follow momentum oscillators, recently bottomed ahead of oversold levels and is currently hovering around the 50.00 mark.

H4 timeframe:

Brought forward from previous analysis –

Since the second half of last week, price action has been clinging to the lower edge of supply at 105.82/105.66, an area that stores a 61.8% Fib level within its upper boundary at 105.81.

Other areas of interest on the H4 chart are resistance at 105.98 and supply from 106.38/106.23. In addition, demand can also be seen at 104.92/105.09.

H1 timeframe:

Transitioning into Tuesday’s European session, volatility diminished considerably, gripping the upper border of an ascending triangle pattern (105.67/105.26).

Breaking above the aforesaid pattern throws light on resistance at 105.85, supply at 106.05/105.91 (and the 106 level within) as well as the ascending wedge take-profit target at 106.06 (yellow boxes).

With reference to the RSI indicator, the value has emphasised resistance around the 60.00 region.

Structures of Interest:

Monthly support at 104.62 (lower base of the monthly descending triangle) prompting a reasonably decisive advance last week, along with the daily chart exhibiting room to approach trendline resistance and supply coming in from 107.58/106.85, signals buyers are likely to remain behind the wheel.

Supply at 105.82/105.66 is in place on the H4 timeframe, yet sellers lack enthusiasm.

In conjunction with the higher timeframe, however, the H1 chart offers an ascending triangle pattern, generally categorised as a continuation pattern. With the higher timeframes demonstrating a move north could be seen, a H1 breakout above the ascending wedge’s upper border may be at hand, with the H1 resistances underlined above likely to be targeted.

September 30th 2020: Greenback Extends Downside Ahead of US Presidential Debate, 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 trades lower by 3.8 percent, on track to retest trendline support (prior resistance – 1.7191).

Interestingly, 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 –

Price, as you can see, recently took on the 200-day simple moving average at 1.2715, stored inside demand at 1.2645/1.2773. Although buyers displayed some enthusiasm at the beginning of the week, efforts have been obstructed by supply at 1.3021/1.2844.

Violating the aforesaid demand shines light on another demand placed at 1.2192/1.2361, an area that contained downside in late June, whereas moves higher target resistance at 1.3201.

The RSI indicator is currently drawing up a possible double-bottom pattern ahead of oversold space.

H4 timeframe:

Demand at 1.2646/1.2685 accepted price action last week. While upside attempts were initially met with strong opposition from resistance at 1.2773 (the upper edge of daily demand), buyers mustered enough strength Monday and blew through resistance to greet supply at 1.2965/1.2911. Since then, price has entered into a narrow consolidation between 1.2828 and the under ledge of the aforesaid H4 supply.

Should we breakout to the upside, supply at 1.3055/1.3018 is next in line, with a break of here unmasking supply at 1.3116/1.3160 (prior demand).

H1 timeframe:

This week has seen H1 enter a ranging phase between a demand area drawn from 1.2810/1.2833 (sited just ahead of the 1.28 level) and the 1.29 hurdle.

Traders will also note the 100-period simple moving average is in the process of turning higher, and could be tested in the event of a breakout to the downside. Pushing through range resistance, nonetheless, has supply at 1.2966/1.2948, a rally-base-drop formation, in sight.

Also of note is the RSI oscillator testing trendline support.

Structures of Interest:

 

  • Monthly displays scope to push lower until testing trendline support (around 1.26ish).

 

  • Daily price is seen struggling to print anything of meaning out of demand at 1.2645/1.2773, hampered by supply at 1.3021/1.2844.

 

  • H4 shows room to weaken from supply at 1.2965/1.2911 and retest support at 1.2773.

 

  • A H1 range is in the process of forming between demand from 1.2810/1.2833 (sited just ahead of the 1.28 level) and the 1.29 level.

 

With monthly suggesting lower prices could be ahead, along with daily price testing supply at 1.3021/1.2844, sellers may make a show. This could force a fakeout below 1.28 to test H4 support at 1.2773 (the upper border of daily demand). A close back above 1.28, off 1.2773, is likely to be interpreted as a bullish signal.

September 30th 2020: Greenback Extends Downside Ahead of US Presidential Debate, FP Markets

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