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 currently trading higher by 2.7 percent reasons additional upside may be on the horizon, with ascending resistance (prior support – 1.1641) perhaps targeted.
The primary uptrend has been in play since price broke the 1.1714 high (Aug 2015) in July 2017.
Daily timeframe:
Brought forward from previous analysis
Daily activity squeezed through the upper perimeter of a descending wedge pattern (correction) between 1.2011 and 1.1612 (not the prettiest of structure here with some maybe interpreting this arrangement as a descending triangle pattern) heading into the final rounds of November. December also flooded resistance at 1.2095, shaping a bullish flag pattern (1.2177/1.2078).
As we head into the final days of 2020, price action is consolidating within close range of the descending wedge pattern’s take-profit target at 1.2318 (yellow), and also the bullish flag’s take-profit level at 1.2384 (purple).
The trend on this timeframe has decisively pointed north since March (secondary trend). We can also see the RSI entered overbought space and formed a double-top pattern. Note the neckline at 68.27 was recently penetrated and is being retested, as we write.
H4 timeframe:
Partly modified from previous analysis
Since December 17, H4 has shaped a symmetrical triangle (1.2271/1.2129) – a consolidation pattern formed beneath neighbouring resistance from 1.2255.
As you can see, Tuesday confronted the upper side of the aforesaid symmetrical triangle with price welcoming 1.2255. A breakout north may witness buyers strive for supply at 1.2351/1.2333, conveniently set a few pips above the daily descending wedge pattern’s take-profit target at 1.2318 (yellow).
H1 timeframe:
EUR/USD has gradually compressed higher since December 23, forming an ascending channel (1.2160/1.2221).
Traders will note Tuesday surpassed 1.2250 resistance and crossed paths with the upper side of the aforesaid H1 channel. This nudged price south of 1.2250 into the closing stages of the session.
As price tackled channel resistance, the RSI also spiked into overbought territory and formed bearish divergence.
Observed levels:
Partly modified from previous analysis
As aired in our last technical report, higher timeframes display room to rally on the monthly chart, in addition to the two bullish patterns in play on the daily timeframe. This implies buyers could attempt to refresh year-to-date highs.
The H4 close above the symmetrical triangle (1.2271) is likely viewed as a bullish sign, though until H4 resistance at 1.2255 is dethroned, strong buyers are unlikely to commit.
In the event H1 remains beneath 1.2250, H1 traders may seek a bullish theme around the 1.22 support, a level currently intersecting closely with channel support (1.2160) and the 100-period simple moving average.
AUD/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
On track to close out 2020 in positive territory, December currently trades higher by 3.7 percent following November’s 4.5 percent rebound from demand at 0.7029/0.6664 (prior supply).
Buyers, according to the monthly chart, 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:
Bottoming within close range of demand at 0.7453/0.7384 (prior supply) on December 21 and establishing a dragonfly doji pattern, this directs light towards 0.7674 resistance.
Despite this, the RSI recently visited resistance around 80.19, a level in play since 2003, with the value recently exiting overbought space. Additional downside momentum could take aim at support from 52.00.
The trend on this timeframe has remained north since early 2020.
H4 timeframe:
Brought forward from previous analysis
Refreshing YTD peaks unearths supply at 0.7665/0.7644 (extended from June 2018), an area situated below daily resistance at 0.7674.
Downstream, demand calls for attention around the 0.7486/0.7514 region.
H1 timeframe:
Tuesday observed H1 slowly grind through 0.76 resistance and retest the latter heading into US trading. Despite a spirited recovery the move was short-lived, with recent price movement reclaiming a large portion of the earlier push.
Upriver, traders will note 0.7650 resistance, a level sitting within H4 supply at 0.7665/0.7644. Lower on the curve, the 100-period simple moving average is visible around 0.7582, with a break unmasking demand from 0.7545/0.7555.
Observed levels:
With both the monthly and daily timeframes calling for higher levels, this suggests H1 buyers could defend 0.76 support and attempt to approach 0.7650 resistance (and H4 supply at 0.7665/0.7644).
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.
December, currently down by 0.7 percent, is seen attempting to pursue terrain beneath 104.62.
104.62 ceding ground throws light on support from 101.70, with a break uncovering trendline support (76.15) and the descending triangle’s take-profit level at 91.04 (red).
Daily timeframe:
Brought forward from previous analysis
Support at 103.08 emerged on December 17 and, as you can see, has so far held form, potentially setting the technical stage for additional gains to trendline resistance (111.68). However, light falls on demand at 100.68/101.85 if sellers make a push through 103.08 support.
RSI enthusiasts will also note upside momentum is bound for 57.00 resistance (capping upside since July).
H4 timeframe:
Tuesday’s analysis revealed price establishing an ascending triangle pattern between 103.89/103.19.
Latest developments, nevertheless, show price marginally surpassed the lower side of the aforesaid ascending triangle, suggesting daily support at 103.08 is perhaps next on tap. Climbing back into the triangle pattern, however, followed by a subsequent breakout above 103.89, shines light on resistance at 104.14, plotted alongside a 127.2% Fib projection at 104.17.
H1 timeframe:
103.50 support, as you can see, made an entrance in recent hours, shortly after taking out the 100-period simple moving average.
Buyers defending 103.50 and reclaiming the 100-period simple moving average indicates H4 price could make its way back into the ascending triangle. Dropping sub 103.50, and taking on Monday’s low at 103.40 implies we’re perhaps headed for demand at 103.05/103.14, largely due to the lack of demand seen between 103.40 and 103.19.
Also noteworthy is the RSI lingering ahead of oversold space.
Observed levels:
Partly modified from previous analysis
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 monthly support surfacing around 101.70 (located within daily demand at 100.68/101.85).
Shorter-term price action is currently concentrated around 103.50 support on the H1. A break beneath the latter, and Monday’s low at 103.40, indicates a bearish scene towards H1 demand at 103.05/103.14. A move off 103.50, and subsequent break of the 100-period simple moving average, however, could have intraday buyers attempt to take control.
GBP/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 higher by 1.4 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:
Brought forward from previous analysis
Supply at 1.3622/1.3467 has represented an area of importance since June 2018 on the daily chart. However, having seen September’s reaction fail to deliver a concrete lower low, together with December’s response unable to capsize support at 1.3176, buyers still appear to have the upper hand.
Resistance at 1.3755 stands out above the aforesaid supply, with follow-through buying emphasising supply at 1.3996/1.3918.
The RSI reveals strong support around 47.00, with resistance forming at the 66.00 region.
H4 timeframe:
Partly modified from previous analysis
Tuesday exhibited limited change, eking out modest gains.
H4 action recently failed to find acceptance above 1.3607 resistance, a level which put a cap on upside mid-December.
Aside from support potentially emerging from the December 22 low at 1.3303, chart studies show scope to approach 1.3182 support (and trendline support [1.2687]).
H1 timeframe:
The 1.3424/1.3453 Fib support zone made an entrance in recent action (made up of 61.8% and 38.2% Fib levels – green), successfully containing downside attempts.
Alongside the RSI breaking above the upper side of a descending wedge, H1 took on the 100-period simple moving average and linked with 1.35 resistance. Above the aforesaid level, traders are likely to hone in on 1.3550 resistance.
Observed levels:
Partly modified from previous analysis
Monthly trendline resistance remains in the fight, though with daily supply at 1.3622/1.3467 currently on shaky ground this suggests price may visit daily resistance at 1.3755.
H4 recently came off resistance at 1.3607, and shows limited support until around 1.3303.
Short term, we’re in a precarious location. H1 shows the 100-period simple moving average serving as support and 1.35 offering resistance. External areas to be watchful of are 1.3550 resistance and the 1.3424/1.3453 Fib support zone.
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