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October 8th 2021: Technical Position Ahead of US Labour Data

October 8th 2021: Technical Position Ahead of US Labour Data, FP Markets

Charts: Trading View

EUR/USD:

(Italics: previous analysis)

Weekly timeframe:

Europe’s single currency trades 0.3 percent lower against its US counterpart, consequently penetrating prime support at $1.1473-1.1583. Further selling—action that breaches current support—unlocks the door to a 61.8% Fibonacci retracement as low as $1.1281.

Technically speaking, though, it’d be unwise to overlook $1.1473-1.1583 at this point. Long-term sell-stops tripped south of late September lows at $1.1612 (2020) could still help fuel buyer interest.

Trend studies show that with the break of $1.1612 lows, the pair is perhaps in the early phase of a trend change to the downside.

Daily timeframe:

Thursday left behind a muted tone, as traders await the release of today’s labour data out of the US.

Wednesday navigated to lows not seen since July 2020, pulling Fibonacci support between $1.1420 and $1.1522 (glued to the lower side of the weekly timeframe’s prime support) into the light.

In terms of the relative strength index (RSI), the indicator is in the early stages of establishing what’s referred to as hidden bullish divergence, sited around oversold territory.

H4 timeframe:

Thursday witnessed Quasimodo support-turned resistance at $1.1563 occupy space. Seizing the aforesaid barrier exposes descending resistance, extended from the low $1.1794, and neighbouring resistance from $1.1622—another previous Quasimodo support.

Lower on the curve, nevertheless, the unit exhibits scope to approach support at $1.1495, derived from March 2020 highs.

As underlined in previous writing, medium-term flow facing southbound since June favours a bearish theme.  

H1 timeframe:

EUR/USD bids tentatively defended support, made up of a 1.272% projection at $1.1535 and a 1.618% Fibonacci expansion at 1.1541. As underlined above, H4 resistance is now active at $1.1563, with a break unmasking the $1.16 neighbourhood on the H1 scale.

Reinforcing a bullish phase, of course, would be a decisive H1 close north of trendline resistance, extended from the high $1.1639.

Observed Technical Levels:

Recognising the possibility of buyers entering the fight from weekly prime support at $1.1473-1.1583 is a MUST.

H1 price muscling above trendline resistance argues H4 resistance from $1.1563 is ready to step aside, movement which could have H1 take aim at $1.16. Conservative buyers, however, are likely to wait and see if H1 retests $1.1563 and establishes support before committing.

October 8th 2021: Technical Position Ahead of US Labour Data, FP Markets

AUD/USD:

(Italics: previous analysis)

Weekly timeframe:

Upside interest is developing from the upper limit of prime support at $0.6968-0.7242.

$0.6968-0.7242 buyers have prime resistance at $0.7849-0.7599 to target; failure to command position from $0.6968-0.7242, on the other hand, opens up support at $0.6673.

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

Daily timeframe:

Fibonacci support between $0.7057 and $0.7126 is a key base on this timeframe, as is prime resistance at $0.7506-0.7474. Immediately above, we see Quasimodo support-turned resistance at $0.7621, which happens to join closely with the 200-day simple moving average at $0.7579, a 61.8% Fibonacci retracement at $0.7585 and a 100% Fibonacci projection at $0.7551.

Latest out of the relative strength index (RSI) reveals the value journeyed above the 50.00 centreline, informing traders that average gains exceed average losses.

H4 timeframe:

Meanwhile, from the H4 timeframe, price action is seen addressing resistance from $0.7317, serving as a cap on price since mid-September. Booking further gains shines the spotlight on Quasimodo resistance at $0.7394, a base sited nearby a 1.618% Fibonacci expansion at $0.7386 and a 1.272% Fibonacci projection at $0.7398.

H1 timeframe:

Bullish forces confronted $0.73 on Thursday, likely consuming a truckload of buy-stops in the process.

Calling for attention to the upside is Quasimodo resistance coming in at $0.7339, a level dovetailing with a 1.618% Fibonacci projection at 0.7333, a 1.272% Fibonacci expansion at $0.7336 and a 100% Fibonacci projection at $0.7339.

Note the above resistance structure is set within stacked supply arranged on the H4 timeframe between $0.7376 and $0.7347.

Observed Technical Levels:

Having noted H1 price conquered $0.73 resistance, this emphasises a short-term bullish vibe until shaking hands with Quasimodo resistance coming in at $0.7339. The break of $0.73 also forecasts weakness around current H4 resistance from $0.7317, which if a breach of this level comes to pass sets H4 Quasimodo resistance at $0.7394 as a possible upside objective.

Short-term action contemplating higher levels is underpinned by the weekly timeframe’s prime support at $0.6968-0.7242.

October 8th 2021: Technical Position Ahead of US Labour Data, FP Markets

USD/JPY:

(Italics: previous analysis)

Weekly timeframe:

Despite USD/JPY concluding last week off 19-month highs at ¥112.08 and establishing a shooting star candlestick pattern (bearish signal) ahead of supply at ¥113.81-112.22, buyers have been on the offensive so far this week.

A bearish scene, nonetheless, directs flow to familiar demand at ¥108.40-109.41—arranged north of descending resistance-turned support, taken from the high ¥118.61.

Daily timeframe:

USD/JPY appealed to dip-buyers on Thursday, underpinned by risk-on trade, rising US Treasury yields and a modest USD bid.

The 1.618% Fibonacci expansion at ¥112.05 is in sight—a level drawing bearish movement last week. In terms of support, ¥110.70 is noted.

Out of the relative strength index (RSI), technicians will note support recently developed at 56.85. This informs traders that momentum remains to the upside for the time being, with overbought space perhaps targeted.

H4 timeframe:

Despite a deep test of supply-turned demand (a zone formed from early July) from ¥110.99-110.79, recent interest to the upside maintained the area and threw light on possible follow-through to Quasimodo resistance at ¥112.17, arranged a handful of pips north of yearly peaks at ¥112.08.

H1 timeframe:

Prime support from ¥111.12-111.24, once again, made an entrance on Thursday, lifting price to highs of ¥111.65ish by the close.

Wednesday’s peak at ¥111.79 remains in sight, closely followed by ¥112, as well as a 100% Fibonacci projection at ¥112.17 and a 1.618% Fibonacci extension from ¥112.15. Levels of interest south of prime support are the ¥111 figure and a 38.2% Fibonacci retracement at ¥110.95.

Observed Technical Levels:

Should H1 prime support at ¥111.12-111.24 hold position, and fuel a break of Wednesday’s high at ¥111.79, watch ¥112. An additional watch, of course, is price whipsawing above ¥112 to test H1 Fibonacci structure around ¥112.16. A test of the said Fibonacci structure is capable of enticing a bearish scene, as H1 Fibonacci levels share space with the daily timeframe’s 1.618% Fibonacci expansion at ¥112.05 and H4 Quasimodo resistance at ¥111.17.

Alternatively, a ¥111.12-111.24 breach opens up ¥111 as possible support on the H1.

October 8th 2021: Technical Position Ahead of US Labour Data, FP Markets

GBP/USD:

(Italics: previous analysis)

Weekly timeframe:

Supply-turned demand at $1.3629-1.3456 continues to emphasise a distressed vibe after having its lower limits clipped in recent trading. In spite of recovery attempts this week, the fact price recently closed below a double-top pattern’s ($1.4241) neckline at $1.3669 signals bears are looking to take charge.

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 neckline—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:

Amidst improved global sentiment, and talks of a BoE rate hike, sterling discovered higher territory against the US dollar on Thursday.

The $1.3736-1.3659 decision point, therefore, remains on the radar, organised underneath trendline resistance, taken from the high $1.4250, and the 200-day simple moving average at $1.3840. To the downside, a Fibonacci cluster is seen between $1.3121 and $1.3167.

A test of $1.3736-1.3659 could encourage more of a decisive sell in this market as the pair has traded southbound since June, and the relative strength index (RSI) is seen closing in on the lower side of the 50.00 centreline to perhaps forge resistance.

H4 timeframe:

Despite initial hesitancy, buyers eventually took control from support at $1.3570 and merging trendline support (drawn from the high 1.3913), inspiring an advance to resistance at $1.3640—prior Quasimodo support.

Clearance of $1.3640 notes the $1.3750-1.3721 decision point. That is, of course, assuming buyers are not discouraged by the lower limit of the daily timeframe’s decision point at $1.3659.

H1 timeframe:

Working with H1 price, traders will have watched short-term flow crawl above $1.36 heading into the early hours of US trading yesterday. Tuesday’s tops at $1.3648 offer potential resistance, organised a few pips under resistance at $1.3658 (joined by a 50.00% retracement at $1.3662 and a 78.6% Fibonacci retracement at $1.3661).

Technicians will also likely take note of $1.36, closely positioned with Quasimodo resistance at $1.3710.

Observed Technical Levels:                              

Long term, as noted in previous writing, sterling appears to favour lower price levels. The daily timeframe’s decision point at $1.3736-1.3659 remains a key base.

The lower limit of the daily timeframe’s decision point at $1.3659, combined with H4 resistance nearby at $1.3640, as well as H1 resistance thrown in the mix at $1.3658, echoes strength and is perhaps enough to stir a bearish scenario.

October 8th 2021: Technical Position Ahead of US Labour Data, 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 8th 2021: Technical Position Ahead of US Labour Data, FP Markets
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