Charts: Trading View
(Italics: Previous Analysis Due to Limited Price Change)
Fibonacci support at $1.1237-1.1281, made up of a 61.8% Fibonacci retracement at $1.1281 and a 1.618% Fibonacci projection from $1.1237, is now back in the frame. This follows a decisive rejection from long-standing resistance at $1.1473-1.1583 (active S/R since late 2017).
Note that current support delivered a floor heading into the close of 2021. ‘Harmonic’ traders will acknowledge $1.1237 represents what’s known as an ‘alternate’ AB=CD formation (extended D leg).
Strengthening the aforementioned resistance area’s presence is the currency pair taking out 2nd November low (2020) at $1.1603 in late September (2021), suggesting a downtrend on the weekly timeframe. This is reinforced by the monthly timeframe’s long-term (some would say ‘primary’) downtrend since mid-2008.
A closer reading of price action on the daily chart shows that the lower edge of weekly resistance at $1.1473-1.1583 was aided by a 7-month trendline resistance on the daily timeframe, extended from the high $1.2254. Tipped to slip further south of trendline resistance, Quasimodo support offers an obvious target at $1.1213.
According to the relative strength index (RSI), the indicator elbowed under the 50.00 centreline this week. Voyaging under the latter underpins the bearish narrative on this scale, informing traders that average losses exceed average gains: negative momentum.
Quasimodo support from $1.1272 (joins forces with the upper boundary of weekly support at $1.1281) continues to offer a modest floor on the H4 chart, following EUR/USD bears flexing their financial muscle from resistance at $1.1354-1.1379 earlier in the week—a prior decision point positioned a handful of pips beneath resistance at $1.1382.
Journeying beneath $1.1272 has the $1.1205-1.1230 decision point to target.
Against the backdrop of higher timeframe flow, shorter-term action suggests the possibility of a falling wedge, a reversal pattern drawn from a high of $1.1360 and a low from $1.1300.
Near-term price structure throws Quasimodo support at $1.1272 and $1.13 resistance into the mix. Beyond this area, resistance at $1.1328 warrants attention, as does $1.1235 support: 17th December low (2021).
The relative strength index (RSI) pencilled in a bottom just ahead of oversold territory in recent trading and is now on the verge of connecting with the lower side of the 50.00 centreline.
Observed Technical Levels:
Fibonacci support at $1.1237-1.1281 on the weekly timeframe and H4 Quasimodo support from $1.1272 suggests the H1 timeframe’s falling wedge could have price breakout to the upside and ‘confirm’ the short-term pattern. A $1.13 breach, therefore, may fuel a test of H1 resistance at $1.1328, followed by a potential run to H1 demand-turned supply at $1.1363-1.1375.
Prime support at $0.6968-0.7242 continues to play a crucial role on the weekly timeframe. Bulls, as you can see, embraced a modestly bullish stance into the close of 2021. 2022, on the other hand, has been relatively undecided so far. Should buyers press higher, resistance is at $0.7501. Manoeuvring beneath $0.6968-0.7242 reveals support at $0.6673 and a 50.0% retracement at $0.6764.
Since mid-Feb tops at $0.8007 (2021), sellers have taken the wheel. This followed a bullish period since pandemic lows of $0.5506 (March 2020), therefore some technical analysts may view this correction into prime support as a dip-buying opportunity. However, it is important to note that the monthly timeframe has been entrenched within a large-scale downtrend from mid-2011.
We are beginning to witness a possible low form on the daily around $0.7091, reinforced amidst upbeat risk sentiment.
Technical structure points to resistance between $0.7402 (the 200-day simple moving average) and $0.7315 (a 100% Fibonacci projection), and support coming in at $0.7021.
Aside from the $0.7082 low (20th December ) nearby, obvious support at $0.7021 calls for attention.
Meanwhile, the relative strength index (RSI) remains marginally beneath the 50.00 centreline, underlining negative momentum on this timeframe.
Coming from support at $0.7097 at the beginning of the week, a level complemented by a 1.618% Fibonacci extension at $0.7102 and a 1.272% Fibonacci projection at $0.7094, has pushed price into the walls of resistance at $0.7169-0.7187.
This resistance remains a focal point on this timeframe, with a break higher shining light on a decision point from $0.7294-0.7267.
$0.71 made an entrance at the beginning of the week, helped by Quasimodo support at $0.7103. Resistance at $0.7168 is now in focus; upstream casts light on resistance at $0.7207 and the $0.72 figure, alongside an AB=CD bearish pattern (the 100% Fibonacci projection at $0.7206) and additional Fibonacci structure.
In addition to the above, the relative strength index (RSI) crossed above the 50.00 centreline. This, through average gains exceeding average losses, shows positive momentum on this timeframe.
Observed Technical Levels:
Having seen H4 resistance at $0.7169-0.7187 unable to stir much of a bearish phase, the H1 timeframe slicing above resistance at $0.7168 to test $0.72 resistance (and associated confluence) could be on the table.
After touching gloves with a 1.272% Fibonacci projection from ¥116.09 in the shape of a shooting star and refreshing multi-year pinnacles, support at ¥112.16 represents a downside goal.
In terms of trend, the unit has been advancing since the beginning of 2021, welcoming a descending resistance breach, drawn from the high ¥118.61. In consideration of the trend, a dip-buying theme from ¥112.16 remains a reasonable assumption.
Although price adopted a bullish phase on Wednesday, we have been lower since the unit connected with Quasimodo resistance at ¥116.33 at the beginning of 2022. Downstream shines light on demand at ¥112.66-112.07, which happens to accommodate a 78.6% Fibonacci retracement at ¥112.00 and a 50.0% retracement from ¥112.55.
South of the said structure, a decision point from ¥111.18-111.79 is in view, alongside a 200-day simple moving average at ¥111.54.
The trend on this timeframe, like the weekly timeframe, faces northbound. This is reinforced by the relative strength index (RSI) showing support between 40.00 and 50.00 (a ‘temporary’ oversold range since 10th May).
Based on H4 technical structure, price is engaging trendline resistance, drawn from the high ¥116.35. A price close north of the said structure opens the door to Quasimodo support-turned resistance at ¥115.01. Rejection of the said trendline, however, reopens the ¥113.54-113.78 decision point.
Taking out the upper extreme of Quasimodo resistance at ¥114.42, the currency pair tested the mettle of channel resistance, taken from the high ¥114.00. Limited resistance is seen above the aforementioned structure until reaching ¥115.
As for momentum, the relative strength index (RSI) ventured into overbought territory in recent hours, a location upside momentum could level off.
Observed Technical Levels:
If H4 trendline resistance holds ground, the H1 timeframe’s Quasimodo resistance-turned support at ¥114.42 will likely be tested. Holding here may provide a lift to buyers, while breaking ¥114.42 could see sellers take control.
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