June 5th 2020: Greenback Vulnerable Ahead of US Non-Farm Payrolls Data

June 5th 2020: Greenback Vulnerable Ahead of US Non-Farm Payrolls Data, FP Markets

EUR/USD:

Monthly timeframe:

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

March, evident from the monthly chart, left behind a long-legged doji indecision candle, with its extremes crossing paths with heavyweight supply at 1.1857/1.1352 (intersects with a long-term trendline resistance [1.6038]) and demand at 1.0488/1.0912.

April spent the best part of the month feasting on the top edge of 1.0488/1.0912, squeezing out a Japanese hammer candlestick pattern, typically viewed as a bullish reversal signal. May, as you can see, recovered off worst levels and wrapped up a few pips shy of monthly highs, with June recently reconnecting with the lower ledge of 1.1857/1.1352.

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

Daily timeframe:

Inspired on the back of broad-based USD selling pressure, EUR/USD notched up its eighth successive daily gain Thursday.

In favour of monthly supply at 1.1857/1.1352, daily submerged supply at 1.1323/1.1268. Technicians will also note this area united with trendline resistance (1.0879), a 127.2% Fib ext. level at 1.1286 and 78.6% Fib ret level from 1.1310.

The RSI indicator also extended into overbought terrain yesterday, currently testing 77.30.

H4 timeframe:

Leaving demand at 1.1189/1.1158 (prior supply) unchallenged by a hair yesterday, the upward lift powered into stacked supply between 1.1368/1.1338 and 1.1360/1.1316.

Candlestick traders may also find use in noting the current candle appears poised to close by way of a Japanese shooting star pattern, generally considered a bearish signal at peaks.

H1 timeframe:

Heading into US trade Thursday, a dip to lows at 1.1216 occurred, missing a particularly interesting area of demand at 1.1199/1.1212 by a handful of pips before rotating to the upside.

Supply at 1.1322/1.1286, extended from mid-March, along with the 1.13 level, as you can see, had little to offer yesterday. Heading into the closing stages of the day, buyers and sellers went head-to-head off 1.1350 and the upper parapet of the recently submerged supply zone (now representing demand). Above 1.1350, buyers will have 1.14 on the hit list.

Structures of Interest:

Monthly supply at 1.1857/1.1352 coming into force, along with daily structure still having a hand in this fight and H4 price displaying signs of possible weakness from stacked supply between 1.1368/1.1338 and 1.1360/1.1316, could instigate a pop lower today.

As such, H1 players may look to get involved sub 1.13.

June 5th 2020: Greenback Vulnerable Ahead of US Non-Farm Payrolls 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 and June’s early rally has, as you can see, landed monthly flow within the parapets of supply fixed at 0.7029/0.6664, an area intersecting with a long-term trendline resistance (1.0582).

Regarding the market’s primary trend, a series of lower lows and lower highs have been present since mid-2011.

Daily timeframe:

Despite refreshing weekly peaks at 0.6987, price action continues to address resistance at 0.6931, a touch under supply at 0.7032/0.6992.

Dips from current structure may see buyers and sellers butt heads at support from 0.6755, placed just ahead of the 200-day simple moving average at 0.6657.

It may also be worth acknowledging the RSI oscillator remains seated within overbought terrain.

H4 timeframe:

Supply from 0.7003/0.6983 knocked some wind out of the Aussie’s upside attempt Thursday, capping gains for a second time this week. If the pair finds itself testing air above the aforesaid supply today, 0.7031 (Dec 31 high) is likely next on tap.

Dips to demand at 0.6827/0.6858 (prior supply) today, on the other hand, implies H4 structure may be entering into a consolidation phase.

H1 timeframe:

Intraday flow rallied strongly amid early US trade Thursday, in a manner suggestive of bringing in the widely watched round number 0.70. However, things turned south a handful of pips above Wednesday’s peak 0.6982, prompting a dip to levels held above the 0.69 level.

Under 0.69, demand at 0.6841/0.6867 (holds 0.6850) is present, which happens to currently join with the 100-period simple moving average around 0.6848.

Structures of Interest:

As put forward in Thursday’s analysis:

With monthly trendline resistance in motion, intersecting with monthly supply at 0.7029/0.6664, sellers are tipped to weigh on upside momentum. 0.70 on the H1 timeframe appeals as notable resistance, holding within the walls of daily supply at 0.7032/0.6992 and also H4 supply at 0.7003/0.6983.

Alternatively, intraday buyers may find use in 0.69 as support today, albeit open to a possible whipsaw into H1 demand at 0.6841/0.6867.

June 5th 2020: Greenback Vulnerable Ahead of US Non-Farm Payrolls 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 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, though June puts forward a reasonably upbeat theme, currently up 1.2%.

Areas outside of the noted 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 –

Since registering a top from 109.38 at the beginning of April, USD/JPY moulded a falling wedge pattern, which had its upper limit breached on May 11 in strong fashion, boosted by demand at 105.70/106.66. The take-profit target out of the pattern, traditionally measured by taking the value of the base and adding this to the breakout point (purple), sets an upside objective of around 109.30.

As you can see, after dethroning the 200-day simple moving average at 108.37, we are within touching distance of completing the falling wedge pattern.

Indicator-based technicians will also note the RSI indicator is seen topping ahead of overbought territory.

H4 timeframe:

108.87/108.48, as you can see, was retested as demand in recent action, charting the way towards another layer of supply at 109.65/109.24, an area that held price action lower in early April.

H1 timeframe:

Intraday motion is seen feasting on offers above the 109 level, as we write, following a retest scenario off a bullish pennant configuration, established from a high of 108.84 and a low coming in from 108.42.

Assuming we maintain a bid above 109, the pennant’s take-profit target, measured by taking the preceding move and adding this value to the breakout point, projects we may strike 1.10 (blue arrows).

Structures of Interest:

While the break of 109 has likely seen buyers off the H1 pennant retest reduce risk to breakeven, resistance is may enter play around the 109.30 region, based on the daily falling wedge take-profit target, held within the lower range of H4 supply at 109.65/109.24.

So, although we could be heading for 1.10, according to H1 pattern structure, we can expect some road bumps to hit along the way.

June 5th 2020: Greenback Vulnerable Ahead of US Non-Farm Payrolls 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 remains in motion as we transition into June. Neighbouring resistance, should we see further recovery, can be found in the form of a trendline (1.7191). A violation of support, nevertheless, puts forward a 127.2% Fib ext. level at 1.1297.

Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008.

Daily timeframe:

Brought forward from previous analysis –

GBP/USD retained its underlying bid Thursday, latching onto its sixth successive gain, albeit in the shape of slowing momentum.

As stated in recent analysis, the pound’s days in the sun may be numbered, having seen price nearing supply at 1.2649/1.2799 (prior demand), an area aligning with the 200-day simple moving average at 1.2665.

H4 timeframe:

Resistance at 1.2624, a level housed within supply at 1.2699/1.2605 (prior demand) had another light thrown its way late Thursday, following a retest at combined support from 1.2520, trendline formation (1.2163) and demand at 1.2478/1.2527.

A break higher today could land candles at supply coming in from 1.2851/1.2805.

H1 timeframe:

Thursday’s analysis put forward the possibility of an intraday double-top pattern off 1.2612 (blue arrows), with a neckline stationed at 1.2554. Analysis also suggested that a break of the neckline could portend moves back to demand at 1.2511/1.2482 (prior supply), which holds 1.25 within.

As you can see, the pattern worked out beautifully, with early London challenging the aforesaid demand and recovering back to 1.26 by the close of trade.

Structures of Interest:

H1 candles are seen testing the mettle of 1.26 right now, reinforced by H4 supply at 1.2699/1.2605 (prior demand) and H4 resistance at 1.2624. As a result, additional downside attempts could be in store today.

Breaking higher and violating H4 resistance at 1.2624, on the other hand, could have daily sellers make an entrance off the underside of daily supply at 1.2649/1.2799, given the H4 zone is glued to the underside of the daily base.

June 5th 2020: Greenback Vulnerable Ahead of US Non-Farm Payrolls 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.




Start Trading
in Minutes

bullet Access 10,000+ financial instruments
bullet Auto open & close positions
bullet News & economic calendar
bullet Technical indicators & charts
bullet Many more tools included

By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.




Source - cache | Page ID - 22549

Get instant Updates in Telegram