EUR/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
The euro punched out a third successive monthly gain against the US dollar in July, adding nearly 5 percent. The move toppled long-term trendline resistance (1.6038) and made contact with the upper border of supply from 1.1857/1.1352. This argues a trend change to the upside may be on the horizon, with trendline resistance (prior support – 1.1641) on the radar as the next upside target.
August, as you can see, currently trades cautiously, down by 0.30 percent.
Also worth pointing out, though, is the primary trend remains intact, emphasising a southerly trajectory since July 2008.
Daily timeframe:
Partially altered from previous analysis –
The ABCD bearish pattern at 1.1872, a simple harmonic configuration, is proving a tough nut to crack since price addressed the base at the end of July. Placed just ahead of supply at 1.2012/1.1937, Friday’s action delivered a muscular bearish candle, a move which snapped a three-day winning streak, with Monday marginally following through to the downside.
An extension lower, assuming last Monday’s low at 1.1695 breaks down, has support at 1.1553 on the radar as the initial point of interest.
In reference to the RSI indicator, the value topped around 80.00 in recent action and decisively departed overbought territory.
H4 timeframe:
Partially altered from previous analysis –
Supply at 1.1938/1.1909 has so far played an important role during August (glued to the underside of daily supply at 1.2012/1.1937), providing enough fuel for price to dethrone support at 1.1841 as well as trendline support (1.1254).
Unseating the aforesaid trendline throws light on demand at 1.1682/1.1716, with a break of this base unlocking the risk of a return to another area of demand from 1.1582/1.1621.
H1 timeframe:
Upside attempts out of demand at 1.1752/1.1775 were capped at the 1.18 level on Monday (joined close by a trendline resistance [1.1916] and a 100-period simple moving average), delivering a strong bearish candle that eventually stirred a break of the aforesaid demand. Interestingly, recent action also established a supply zone at 1.1776/1.1752, which could hold a retest today and guide the candles to the 1.17 level.
Structures of Interest:
With daily price making progress under the ABCD bearish pattern at 1.1872, and H4 recently pushing through trendline support (1.1254), a retest at H1 supply at 1.1776/1.1752 could be on the menu today with sellers targeting the 1.17 level.
AUD/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
May’s extension, together with June and July’s follow-through, witnessed supply at 0.7029/0.6664 and intersecting long-term trendline resistance (1.0582) relinquish ground. Concluding July higher by 3.5 percent, buyers appear free to explore as far north as 0.8303/0.8082 in August, a supply zone aligning closely with trendline resistance (prior support – 0.4776).
Despite recently taking trendline resistance, the market’s primary trend still points south, demonstrating a series of lower lows and lower highs since mid-2011.
Daily timeframe:
Partially altered from previous analysis –
By way of a bearish outside day, AUD/USD snapped a three-day winning streak from supply at 0.7264/0.7224 (stationed underneath another supply at 0.7346/0.7282) on Friday. This, despite Monday’s half-hearted bearish response, still has daily action perhaps bound for support at 0.7067.
With reference to the RSI indicator, we have been toying with overbought status since July 20, with the value recently nudging back beneath 60.00.
H4 timeframe:
Demand at 0.7115/0.7144, as you can see, contained downside Monday.
In light of the current uptrend, Monday’s attempt to gain higher ground from the aforesaid demand is not a surprise.
Buyers, however, seemed somewhat uncertain, potentially unlocking the possibility of drawing in demand at 0.7082/0.7106, an area intersecting with local trendline support (0.7063), as well as a longer-term trendline support (0.6832).
H1 timeframe:
H1 candles spent Monday’s session getting to know 0.7150 support, despite buyers appearing reluctant to breach supply at 0.7177/0.7164 (prior demand), along with the 100-period simple moving average, currently circling 0.7187.
Sustained movement under 0.7150 today could set up a stop-fuelled decline to mild demand, circled in red around 0.7112, and the 0.71 level.
Structures of Interest:
Partially altered from previous analysis –
Monthly price sweeping through supply and associated trendline resistance has likely aroused interest from longer-term buyers. However, the fact we’re fading daily supply at 0.7264/0.7224 could lead to a 0.7067 daily support retest forming.
With the daily timeframe’s structure in mind, this implies a break of 0.7150 on the H1 may exceed the 0.71 level and H1 demand at 0.7073/0.7088. Before reaching daily support at 0.7067, nonetheless, we would need to dethrone H4 demand at 0.7082/0.7106, which, as we already know, is reinforced with two H4 trendline supports.
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.
April, May and June were pretty uneventful, with the latter wrapping up indecisively in the shape of a neutral doji candlestick pattern. July, nonetheless, sunk nearly 2 percent, consequently testing the lower boundary of the descending triangle.
August currently trades mostly unchanged.
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:
Partially altered from previous analysis –
Having monthly support at 104.62 make a show, daily price spent last week engaging with supply from 105.70/106.66. Selling pressure, as you can see though, has so far been relatively uninspiring.
Eliminating 105.70/106.66, therefore, may take shape, perhaps pulling in supply at 107.58/106.85.
The RSI value remains under 50, albeit slowly closing on the mid-point barrier.
H4 timeframe:
After unseating resistance at 105.68 Friday, price action has placed resistance derived from the Andrew’s Pitchfork (107.54) under pressure. Sidestepping the aforesaid resistance today clears the runway to at least supply at 106.39/106.64 (prior demand), while breaking lower could reconnect the pair with demand at 105.06/105.30 (prior supply), fastened closely with median line support (Andrew’s Pitchfork – 108.16).
H1 timeframe:
Monday watched price reclaim the 105.80/105.63 area as demand (prior supply), a zone restraining upside since Wednesday and currently sharing space with a 100-period simple moving average.
As you can see, buyers were unwilling to commit north of 106, fading local tops (green – previous double-top formation) around 106.19 and dropping back to the aforesaid demand. Crossing above 106 today, and holding position, could have 106.49/106.35 supply take in price, while 105.50 support resides under current demand should we press for lower terrain.
Structures of Interest:
Partially altered from previous analysis –
With monthly support at 104.62 making a show in recent days, coupled with a lack of selling interest seen from daily supply at 105.70/106.66, this implies a break higher could come to fruition.
Scope for manoeuvre beyond 106 is seen on the H1 timeframe, tipped to press for supply at 106.49/106.35 (H1 sellers from 106.19 likely now consumed), fastened to the lower base of H4 supply at 106.39/106.64. Breaking 106, as a result, may ignite breakout strategies.
GBP/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
GBP/USD finished higher by 5.5 percent in July, leading to long-term trendline resistance (1.7191) abandoning its position.
Despite the primary trend facing lower since early 2008, rupturing current trendline resistance could have buyers work towards another prominent trendline resistance (2.1161) over the coming weeks.
August has so far offered little movement, trading unchanged as of current price.
Daily timeframe:
Brought forward from previous analysis –
After squeezing through the 200-day simple moving average (July 21), currently fluctuating around 1.2706, and toppling supply at 1.3021/1.2844, price action revisited the latter as a demand and fuelled modest upside.
Last Thursday finished a touch south of resistance at 1.3201 (ahead of a 161.8% Fib ext. level at 1.3264), recording five-month peaks. Friday, as you can see, responded by collapsing back to 1.3021/1.2844 demand.
Modest buying came into view Monday, up by 0.2%.
The RSI oscillator, for those following momentum indicators, will note the value marginally exited overbought status, fading recent values as far north as 80.00.
H4 timeframe:
Brought forward from previous analysis –
Despite Monday finding a degree of support, Friday’s outlook remains unchanged.
Friday witnessed sellers extend their position south of daily resistance at 1.3201, landing price action within shouting distance of familiar demand from 1.2945/1.2989 (part of stacked demand [1.2948/1.2910]). Also particularly noteworthy on this timeframe is trendline support (1.2259).
H1 timeframe:
Intraday activity on Monday spiked to lows at 1.3019 heading into London lunch, likely filling sell-stops south of 1.3050 support, ahead of the widely watched figure 1.30 (joined by demand coming in from 1.2977/1.3000).This demand is considered significant on this timeframe, due to it being an area where a decision was made to break above 1.30.
The recent dip lower led to a turn higher going into US trading, a move which saw price reclaim 1.3050 and cross paths with 1.31 and joining 100-period simple moving average. This combination, as you can see, has so far appealed to sellers.
In regards to the RSI oscillator, we recently connected with oversold levels and modestly rebounded, currently testing 50.00.
Structures of Interest:
Partially altered from previous analysis –
Monthly breaking trendline resistance emphasises an optimistic tone for GBP this month.
Daily price is attempting to secure a bullish position following a retest at daily demand from 1.3021/1.2844, though it appears buyers were recently chased off ahead of daily resistance at 1.3201.
H4 demand at 1.2945/1.2989 is likely watched by many traders, along with connecting H4 demand at 1.2948/1.2910. Noting the 1.30 figure inhabits territory just above H4 demand at 1.2945/1.2989, a whipsaw through the round number into the aforesaid demand (as well as H1 demand at 1.2977/1.3000) could be seen. This, assuming a H1 close back above 1.30, could appeal to intraday buyers.
Another possible scenario to watch is a H1 close under 1.3050, enough to perhaps stir breakout sellers to 1.30.
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.
Access 10,000+ financial instruments