EUR/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
May, as you can see, recovered off worst levels and wrapped up a few pips shy of monthly highs out of demand from 1.0488/1.0912.
June extended gains, though ran into opposition at the lower ledge of supply from 1.1857/1.1352 (unites with long-term trendline resistance [1.6038]) – the month currently trades off best levels.
With reference to the primary trend, price has exhibited clear lower peaks and troughs since 2008.
Daily timeframe:
Partially altered from previous analysis –
EUR/USD recently addressed a potential reversal zone (PRZ), derived from a harmonic bearish bat pattern, comprised of an 88.6% Fib level at 1.1395, a 161.8% BC projection at 1.1410 and a 161.8% Fib ext. level at 1.1462 (red oval). According to the harmonic pattern’s overall structure, despite Monday’s decisive recovery, price is tipped for more underperformance.
It’s typical to see traders sell PRZs and place protective stop-loss orders above the X point, in this case at 1.1495. Common take-profit targets fall in at the 38.2% and 61.8% Fib levels (legs A/D) at 1.1106 and 1.0926, respectively. Note in between the said Fib studies traders must also contend with the 200-day simple moving average at 1.1027.
H4 timeframe:
Demand at 1.1189/1.1158 (prior supply), albeit putting forward a fragile tone Friday, rejuvenated euro bidding yesterday. This throws light on channel resistance (1.1422). A shift above here is likely to prepare the ground for a climb to resistance at 1.1348.
H1 timeframe:
Snapping a 4-day losing streak, intraday upside rode through a number of key resistances on the H1 timeframe Monday, surfacing above the 1.1250 point.
1.1250 is open to a retest today as support, cushioned by recently taken channel/trendline resistances which are also expected to serve as supports (1.1422/1.1293).
Structures of Interest:
EUR/USD portrays an interesting cocktail of technical structure this morning.
On one side of the field, monthly supply at 1.1857/1.1352 holds price, along with daily action recently respecting its harmonic bearish bat pattern and suggesting we may eventually head for the 38.2% Fib level at 1.1106.
On the other side, however, H4 channel resistance (1.1422) could hinder dip-buying scenarios off 1.1250/H1 trendline supports.
Overall, it appears sellers govern the majority of flow, in terms of technical structure, despite the week’s enthusiastic start.
AUD/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
May’s extension as well as June’s follow-through swerved action into supply at 0.7029/0.6664, an area benefitting from additional resistance by way of a long-term trendline formation (1.0582).
Regarding the market’s primary trend, a series of lower lows and lower highs have been present since mid-2011.
Daily timeframe:
Since June 11 smothered support at 0.6931, the base has proved reasonably worthy resistance.
Although the break lower threw light on support nearby at 0.6755, the level remains unopposed. Interestingly, dethroning the aforementioned support also throws light on the 200-day simple moving average at 0.6664, which is in the process of flattening, following months of drifting lower.
H4 timeframe:
Demand at 0.6773/0.6814, an area boasting a connection with a 38.2% Fib level at 0.6808, once again, contained downside on Monday.
Although circling tops around 0.6910, a 61.8% Fib level is also stationed close by at 0.6947. Higher than here will likely entail crossing paths with trendline resistance (prior support – 0.6856) and supply around 0.7046/0.7036.
H1 timeframe:
Initially, as you can see here, research had eyes on a descending triangle. However, following Monday’s kick higher, a falling wedge (0.6976/0.6833) appears more appropriate technical structure on this timeframe.
Early US Monday engulfed the upper level of the falling wedge, riding through 0.69 and testing supply at 0.6932/0.6918.
The take-profit target derived from the falling wedge pattern can be found just ahead of the 0.7050 region, measured by taking the base value and adding this to the breakout point (yellow).
Structures of Interest:
For the H1 falling wedge to complete, price has to overcome a number of potentially troublesome hurdles, including daily resistance at 0.6931 and the widely watched round number 0.70 seen on the H1.
A daily close above the aforementioned daily resistance, therefore, will likely serve as a cue to reduce risk to breakeven.
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 busy carving out a descending triangle pattern between 118.66/104.62.
The month of March concluded by way of a long-legged doji candlestick pattern, ranging between 111.71/101.18, with extremes piercing the outer limits of the aforementioned descending triangle formation. April was pretty uneventful, ranging between 109.38/106.35. May also remained subdued, ranging between 108.08/105.98, with June currently off best levels, down 0.8%.
Areas outside of the noted triangle pattern 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 welcomed price action into the closing stages of the week. Despite Thursday’s mild recovery, underlying bids remained soft on Friday and Monday. This threatens a dive into the aforesaid demand this week.
The 200-day simple moving average at 108.39 has been flattening since mid-March, and represents achievable resistance should a rotation to the upside come to fruition.
H4 timeframe:
Brought forward from previous analysis –
Since Thursday, H4 price has been in the process of establishing a tight bearish pennant pattern between 107.13/106.66, considered among market technicians to be a continuation pattern.
Interestingly, the pattern is centred around resistance at 106.91 and has derived some support off demand close by at 106.49/106.66, an area fixed at the top edge of daily demand from 105.70/106.66.
H1 timeframe:
Partially altered from previous analysis –
107 has proved wholesome resistance, withstanding a number of upside attempts in the second half of last week and also again yesterday. The 100-period simple moving average is also now seen intersecting with the round number.
To the downside on the H1 timeframe, local demand is relatively limited, therefore focus will likely remain on H4 demand underlined above at 106.49/106.66.
Structures of Interest:
Brought forward from previous analysis –
Daily price recently bumped back into demand at 105.70/106.66 and is holding, albeit lacking impetus.
The H4 bearish pennant pattern suggests the prospect of further losses, though at the same time faces opposition off H4 demand at 106.49/106.66, which as we already know, is linked with the upper boundary of daily demand at 105.70/106.66. As such, if the lower limit of the H4 bearish pennant gives way, traders can expect a potentially uncomfortable ride to its take-profit target (measured by taking the preceding move and adding this value to the breakout point).
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) remain in view, with the latter so far prompting a reasonably attractive upper shadow this month.
Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008. Consequently, this places 1.1904/1.2235 in a vulnerable position.
Daily timeframe:
Partially altered from previous analysis –
Following last Tuesday’s retest at the 200-day simple moving average from 1.2683, the second half of the week took the currency pair to demand at 1.2192/1.2361, which, as you can see, held on Monday. This is an area not only fastened to the top edge of monthly support, it is also considered the decision point to break 1.2647 (April 14 high).
H4 timeframe:
Demand at 1.2304/1.2343, situated within the walls of daily demand underlined above at 1.2192/1.2361, also held on Monday, with traders now watching supply at 1.2476/1.2526 (prior demand), which intersects with trendline support (1.2075 – prior support).
H1 timeframe:
After retesting 1.24, albeit probing lows at 1.2380, as we transitioned into US trade Monday, candle action tested the resolve of offers at 1.2450.
Resistance above 1.2450 can be located at 1.25, intersecting with trendline resistance (1.2813).
Indicator-based traders will also note the RSI value fast approaching overbought territory.
Structures of Interest:
The point at which 1.25 and H1 trendline resistance merge (red arrow) is likely to be a resistance of interest for intraday sellers today. This combination also benefits from converging with H4 supply at 1.2476/1.2526 and H4 trendline resistance.
Despite the above confluence, traders are also urged to remain aware of where we’re trading from on the daily timeframe: demand.
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