July 24th 2020: Single Currency Gripping 1.16 Ahead of Eurozone Manufacturing Data

July 24th 2020: Single Currency Gripping 1.16 Ahead of Eurozone Manufacturing Data, FP Markets

EUR/USD:

Monthly timeframe:

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

The month of May, as you can see, recovered off worst levels out of demand from 1.0488/1.0912 and closed firm. This prompted an extension in June to highs at 1.1422, adding 1.2% despite also running into opposition at the lower ledge of nearby supply from 1.1857/1.1352 (unites with long-term trendline resistance [1.6038]).

Interestingly, July, currently trading +3.2%, is attempting to overthrow the aforesaid trendline resistance.

With reference to the primary trend, the pair has exhibited lower peaks and troughs since 2008.

Daily timeframe:

Partially altered from previous analysis –

Scratching out a fifth successive bullish candle, price action demonstrates signs of strength above a recently conquered resistance at 1.1553. Consequently, market participants are perhaps eyeing a 5-wave completion around 1.1669 (where wave 1 equals wave 5).

Indicator-based traders will also want to note the RSI oscillator recently entered overbought territory.

H4 timeframe:

Demand (prior supply) at 1.1545/1.1518 made an entrance in recent trading, motivating an advance to a familiar resistance area from 1.1628/1.1600. Having navigated deep into the aforementioned zone, there is a possibility we may eventually cross paths with nearby supply at 1.1651/1.1632.

H1 timeframe:

Bulls took charge heading into US trade Thursday, scaling through 1.16 and running into supply at 1.1631/1.1614. Pressure derived out of the aforementioned supply zone has, so far, been enough to sweep candles back under 1.16, throwing light on a potential run to 1.1550 support and merging channel support (prior resistance – 1.1467).

Structures of Interest:

Noting monthly price trading above trendline resistance, albeit within the parapets of supply, and daily price dethroning resistance at 1.1553, the higher timeframes indicate additional bullish sentiment could be in store until reaching a 5-wave completion around 1.1669.

Shorter term, however, has H1 fading supply at 1.1631/1.1614 which recently reclaimed 1.16. Note this is further bolstered by the H4 resistance area at 1.1628/1.1600.

A drive to 1.1550 support on the H1 would be interesting, serving not only as a downside target for short sellers under 1.16, but also as a platform for potential bullish strategies in line with higher timeframe direction.

July 24th 2020: Single Currency Gripping 1.16 Ahead of Eurozone Manufacturing Data, FP Markets

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 has witnessed supply at 0.7029/0.6664, and intersecting long-term trendline resistance (1.0582), give way in recent trading. Technically, this could liberate buyers to as far north as 0.8303/0.8082, a supply zone that aligns closely with trendline resistance (prior support – 0.4776).

Despite this, the market’s primary trend points south, demonstrating a series of lower lows and lower highs since mid-2011.

Daily timeframe:

Partially altered from previous analysis –

Since ousting resistance at 0.6931, the level has been featured as support.

Wednesday’s action came within a stone’s throw away from reaching 0.7197 resistance, with Thursday delivering a bearish candle and snapping a four-day winning streak.

In terms of the RSI oscillator, the value recently exited overbought territory and is producing bearish divergence.

H4 timeframe:

As the Australian dollar travelled into negative territory against the buck Thursday, demand at 0.7102/0.7084 (prior supply) welcomed price action. Despite an early attempt at recovery, buyers appear feeble, emphasising the prospect of a breach to deeper waters today and approach to demand at 0.7015/0.7035. This is an interesting zone; it is marked as a point where a decision was made to break above neighbouring highs and supply at 0.7102/0.7084.

H1 timeframe:

0.7118/0.7146 initially put up some demand heading into the European open yesterday, though failed to sustain gains north of 0.7150 resistance.

The aforesaid demand gave way going into US trading, with price testing 0.71 support. This, as you can see, prompted a retest at 0.7118/0.7146, which held as supply and forced H1 candles sub 0.71 by the close.

Sellers south of 0.71 must contend with possible support derived from the 100-period simple moving average around 0.7081 and 0.7050 support.

Structures of Interest:

H1 closing under 0.71 indicates a bearish tone heading into Friday, bolstered by daily price recently denying levels ahead of resistance at 0.7197 and H4 buyers lacking enthusiasm out of 0.7102/0.7084.

Traders, however, are urged to keep tabs on monthly price, which suggests buyers still have the upper hand.

July 24th 2020: Single Currency Gripping 1.16 Ahead of Eurozone Manufacturing Data, FP Markets

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 and May were pretty uneventful, with June also wrapping up indecisively in the shape of a neutral doji candlestick pattern.

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:

Brought forward from previous analysis –

Demand at 105.70/106.66 remains in focus on the daily timeframe. Although a reasonably hardwearing zone since early May, buyers appear to be lacking spirit. The previous reaction on June 23, as you can see, failed to reach the 200-day simple moving average at 108.32 before rotating lower, emphasising buyer weakness.

Moves below current demand re-opens the risk of a return to support at 105.01.

H4 timeframe:

Brought forward from previous analysis –

Recent developments on the H4 timeframe reveal price movement carving out a consolidation between supply at 107.60/107.42 and demand coming in from 106.39/106.64.

Traders will also note the latter comes with a 161.8% Fib ext. level at 106.67 and is situated within the upper boundary of daily demand from 105.70/106.66. Outside of the aforesaid range, peaks around 107.77 and the 108.09 level represent resistance, while through demand we can see support at 105.99.

Thursday, as you can see, concluded within shouting distance of range support, marginally bottoming ahead of Tuesday’s session low at 106.68.

H1 timeframe:

Despite opposition forming off the 100-period simple moving average, sellers out of supply at 107.32/107.24, an area aligning closely with trendline resistance (prior support – 106.66) and 61.8% Fib resistance at 107.21, slipped through the noted SMA and 107 support, consequently landing things just ahead of support from 106.70.

In terms of the RSI momentum oscillator, the value recently exited oversold territory.

Structures of Interest:

106.70 support is still likely on the radar. Traders will note the level shares space nearby H4 demand at 106.39/106.64, which, as underlined above, is plotted inside daily demand at 105.70/106.66.

July 24th 2020: Single Currency Gripping 1.16 Ahead of Eurozone Manufacturing Data, FP Markets

GBP/USD:

Monthly timeframe:

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

Support at 1.1904/1.2235 and long-term trendline resistance (1.7191) offers durable structure to work with on the monthly timeframe at the moment, with the latter recently receiving price action.

Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008, placing 1.1904/1.2235 support in a vulnerable position.

Daily timeframe:

Partially altered from previous analysis –

After mingling below the 200-day simple moving average at 1.2697 since July 9, Tuesday squeezed above the aforesaid value followed by Wednesday and Thursday retesting the dynamic line as support. Consequent to this, price action could work its way to supply coming in from 1.3021/1.2844.

The RSI is also seen closing in on overbought levels.

H4 timeframe:

Partially altered from previous analysis –

Since Tuesday, H4 has been carving out what appears to be a bullish pennant formation between 1.2767/1.2644.

Structure to the downside has two trendline supports (1.2666/1.2259) residing nearby, while renewed bullish interest will pierce the current bullish pennant pattern (and perhaps trigger long entries) and bring light to the 127.2% Fib ext. level at 1.2783, followed by supply at 1.2851/1.2805.

H1 timeframe:

Partially altered from previous analysis –

An early European decline from 1.2750 resistance Thursday brought about a deep whipsaw through 1.27. US trade, though, as you can see, recovered earlier losses and reconnected with 1.2750 by the day’s close.

Clearing 1.2750 today shines light on 1.28 resistance, a barrier uniting closely with the underside of H4 supply at 1.2851/1.2805.

Structures of Interest:

Partially altered from previous analysis –

With trade recently nudging into monthly trendline resistance, upside attempts could waver.

On the other hand, crossing the 200-day simple moving average on the daily timeframe is likely to lift the pair to supply at 1.3021/1.2844, a potential location active sellers reside. With this being the case, a 1.2750 breach on the H1, a move that may prompt a H4 close north of the bullish pennant pattern, sends across an intraday bullish signal to reach at least the 127.2% Fib ext. level at 1.2783 on the H4 and nearby H4 supply at 1.2851/1.2805 (and 1.28 on the H1).

July 24th 2020: Single Currency Gripping 1.16 Ahead of Eurozone Manufacturing 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.




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