December 18th 2020: Greenback Pursuing Bearish Theme South of 90.00 Figure

December 18th 2020: Greenback Pursuing Bearish Theme South of 90.00 Figure, FP Markets

EUR/USD:

Monthly timeframe:

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

Following the break of long-term trendline resistance (1.6038) in July, and subsequent break of supply from 1.1857/1.1352 in August, a modest correction surfaced. However, buyers making an entrance in November and December trading higher by 2.9 percent argues additional upside may be on the horizon, with ascending resistance (prior support – 1.1641) perhaps targeted.

The primary downtrend, nevertheless, remains unbroken until 1.2555 is engulfed (Feb high [2018]).

Daily timeframe:

Brought forward from previous analysis –

In tandem with monthly buyers, daily activity squeezed through the upper perimeter of a descending wedge pattern (correction) between 1.2011 and 1.1612 (some may interpret this arrangement as a descending triangle pattern) heading into the final rounds of November, with December also overrunning resistance at 1.2095.

In recent movement, EUR/USD also processed a bullish flag pattern (1.2177/1.2078) off 1.2095, a level now serving as support. As you can see, the pair modestly closed above the bullish flag’s upper side earlier in the week and has since climbed, suggesting not only could price reach for the descending wedge pattern’s take-profit target at 1.2318 (yellow), but also the bullish flag’s take-profit level at 1.2384 (purple).

The trend on this timeframe has firmly pointed north since March.

H4 timeframe:

As buyers continue to take charge, Thursday observed a fourth successive daily advance grace the charts. Clearing offers around supply at 1.2200/1.2170, extended from April, 2018, and a subsequent breach of resistance at 1.2255, upside shines light on supply from 1.2351/1.2333.

Traders are recommended to factor in a possible 1.2255 retest before buyers look to refresh multi-year highs.

H1 timeframe:

Heading into Thursday’s London session, upside momentum visibly diminished. With the exception of the RSI value crossing paths with the upper side of a week-long range, resistance is limited on the chart until the 1.23 level.

Observed levels:

Partly modified from previous analysis –

According to the higher timeframes and the prevailing uptrend (daily chart), buyers remain at the wheel.

In addition to the higher timeframe outlook, H4 journeying above resistance at 1.2255 supports a bullish presence. Against this background, a 1.2250 retest on the H1 could charm intraday buyers today, with 1.23 initially targeted.

December 18th 2020: Greenback Pursuing Bearish Theme South of 90.00 Figure, FP MarketsAUD/USD:

Monthly timeframe:

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

Following a mild correction that addressed the upper border of demand at 0.7029/0.6664 (prior supply), buyers have so far responded well. Up by 4.5 percent in November, with December also trading higher by 3.9 percent, 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).

In terms of trend, the primary downtrend (since mid-2011) remains south until breaking 0.8135 (January high [2018]).

Daily timeframe:

Partly modified from previous analysis –

Supply at 0.7587/0.7528, as you can see, succumbed to upside pressure on Thursday, movement that shines light on 0.7674 resistance.

With reference to the immediate trend, AUD/USD has been higher since bottoming in March.

The RSI indicator is seen crowding overbought space, visiting resistance around 80.19, a level in play since 2003.

H4 timeframe:

Thursday not only breached daily supply, AUD/USD refreshed year-to-date highs and cleared H4 supply at 0.7616/0.7591. Interestingly, price is seen retesting 0.7616/0.7591, threatening moves to supply at 0.7665/0.7644 (located beneath daily resistance at 0.7674).

H1 timeframe:

Following Wednesday’s 100-period simple moving average test, the upper side of the H1 range was taken at 0.7572 early Thursday, followed by a subsequent break of 0.76. Volatility, however, diminished heading into US trading, with 0.7650 resistance overhead.

RSI fans will note the line recently broke above the upper edge of a bullish flag and tested overbought resistance around 80.85.

Observed levels:

Daily supply at 0.7587/0.7528 surrendering its position, H4 supply at 0.7616/0.7591 being tested as demand, on top of monthly price calling for higher levels, implies another wave of buying could be on the table. A H1 0.76 retest, therefore, may bump dip-buyers into the fight.

December 18th 2020: Greenback Pursuing Bearish Theme South of 90.00 Figure, FP MarketsUSD/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.

December, as you can see, currently trades lower by 1.1 percent, pursuing lower terrain beneath 104.62.

104.62 ceding ground throws light on demand from 96.41/100.81, followed by trendline support (76.15) and the descending triangle’s take-profit level at 91.04 (red).

Daily timeframe:

Partly modified from previous analysis –

Since December, sellers have largely governed control with yesterday’s 0.4 percent decline drawing in support at 103.08.

Trendline resistance (111.68) and supply from 106.33/105.78 are prominent areas north of price; light falls on demand at 100.68/101.85 (fixed to the upper base of monthly demand) if sellers make a push through 103.08 support.

RSI enthusiasts will note the pair has remained under 57.00 resistance since July, on course to visit oversold levels.

H4 timeframe:

As anticipated, demand at 103.04/103.58 had little to offer, following the heavy-handed 103.70 resistance retest. Thursday reveals the lower side of the aforesaid demand was taken, perhaps tapping sell-stops and unlocking space towards another demand at 101.98/102.63 (located just ahead of daily demand at 100.68/101.85).

H1 timeframe:

In line with daily support making an entrance at 103.08, the 103 level on the H1 also made a show, together with a 127.2% Fib projection at 103.01. H1 resistance at 103.18 is proving stubborn, with supply at 103.37/103.31 calling for attention should buyers change gears. Below 103, on the other hand, sellers are likely to look towards 102.50 support.

With reference to the RSI indicator, the value recently rebounded from oversold space and is on track to greet resistance at 51.10.

Observed levels:

Monthly price pursuing a bearish theme below descending triangle support at 104.62 places a question mark on daily support at 103.08. A daily close below the aforementioned level unlocks the possibility of an intraday bearish scene unfolding below 103 (and the lower side of H4 demand at 103.04) towards 102.50 support on the H1 (the upper side of H4 demand resides at 102.63).

December 18th 2020: Greenback Pursuing Bearish Theme South of 90.00 Figure, FP MarketsGBP/USD:

Monthly timeframe:

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

November trading higher by 2.9 percent and December currently trading higher by 1.9 percent recently stirred trendline resistance (2.1161).

In terms of trend, the primary trend has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way – April high 2018.

Daily timeframe:

Partly modified from previous analysis –

Following last Friday’s rebound from support at 1.3176, this week has witnessed buyers gnaw through offers within supply at 1.3622/1.3467, with Thursday noting a third successive daily advance. Although monthly price tests meaty trendline resistance, the fact daily sellers were unable to topple 1.3176 support suggests a break of the monthly trendline could be on the table.

The RSI reveals the value rebounded strongly from support around 47.00 in recent days and is now on course to retest overbought space.

H4 timeframe:

Resistance at 1.3607 made an entrance Thursday, following a recent run off demand at 1.3435/1.3469, As stated in previous analysis, the reaction from the aforesaid demand is unsurprising, due to it being within this area a decision was made to push above prior YTD peaks.

H1 timeframe:

Although sterling refreshed year-to-date highs on Thursday, an intraday bearish vibe is emanating from the H1 chart. A double pattern around 1.3625 is brewing, with price seen attacking the neckline (blue arrow – 1.3560) as we write. Dipping under 1.3550 support reveals the 1.35 level and an interesting trendline support (1.3134), in addition to demand at 1.3446/1.3470. Traders will also note the 1.35 area merges closely with the double-top take-profit level.

RSI movement, nevertheless, tests support at 51.00.

Observed levels:

H1 trendline support is likely on the watchlists of many dip-buyers this morning, particularly at the point it aligns with 1.35.

According to the overall technical framework, upside remains favoured, as monthly trendline resistance appears to be losing its grip, daily supply at 1.3622/1.3467 had its upper side tapped yesterday, and the trend in this market (see daily timeframe for clearer view) has been higher since March. The concern 1.35 buyers may have is the fact H4 connected with resistance at 1.3607.

December 18th 2020: Greenback Pursuing Bearish Theme South of 90.00 Figure, 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.




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