EUR/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
April spent the best part of the month feasting on the top edge of demand from 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 extending gains and recently reconnecting with the lower ledge of supply at 1.1857/1.1352 (intersects with a long-term trendline resistance [1.6038]).
With reference to the primary trend, price has exhibited clear lower peaks and troughs since 2008.
Daily timeframe:
Partially altered from previous analysis –
After eight days of one-sided traffic, sellers made a stance Friday topping a few pips ahead of a potential reversal zone (PRZ) derived from a harmonic bearish bat pattern (comprised of an 88.6% Fib ret level at 1.1395, a 161.8% BC projection at 1.1410 and a 161.8% Fib ext. level at 1.1462 [red oval]). It’s common to see traders sell PRZs and site protective stop-loss orders above the X point, in this case at 1.1495. Common targets fall in at the 38.2% and 61.8% Fib ret levels (derived from legs A-D) at 1.1106 and 1.0926, respectively.
Monday, as you can see, finished unchanged, forming an indecision candle.
In addition to the bearish configuration, the RSI indicator also entered into overbought terrain, currently fading peaks of 78.00.
H4 timeframe:
Brought forward from previous analysis –
By way of Friday’s Japanese shooting star candlestick pattern, regarded as a bearish signal at peaks, upside slackened out of supply coming in at 1.1415/1.1376 and prodded lows at 1.1278, aided by a surprise US non-farm payrolls number.
Price may continue to unwind, according to the H4 chart, as demand is not expected to make a showing until 1.1189/1.1158 (prior supply).
H1 timeframe:
Brought forward from previous analysis –
EUR/USD, as per the H1 timeframe, spent Monday fluctuating between gains/losses around the 1.13 level, with additional resistance forged by way of local supply from 1.1344/1.1316.
Dips sub 1.13 may have buyers and sellers square off at channel resistance-turned support (1.0991) and the 100-period simple moving average, sited above 1.1250.
With respect to the RSI oscillator, the value has remained reasonably healthy above the 50.00 level since late May.
Structures of Interest:
Brought forward from previous analysis owing to Monday’s subdued moves –
Monthly supply at 1.1857/1.1352 coming into force, along with daily price capping gains ahead of a harmonic bearish bat pattern between 1.1462/1.1395, reflects a bearish climate.
H4 appears set to sail lower levels after recently crossing paths with supply at 1.1415/1.1376, with demand at 1.1189/1.1158 in sight.
Knowing monthly, daily and H4 timeframes exhibit scope to press lower, H1, assuming we dip south, is likely to overrun noted H1 supports. As such, bearish themes under 1.13 remain the better path to explore at least until H4 demand at 1.1189/1.1158 makes an appearance.
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 impressive early rally has, as you can see, placed monthly price around the upper limit of supply at 0.7029/0.6664. What’s also notable here is within the supply area’s walls a long-term trendline resistance (1.0582) was recently penetrated, suggesting buyers may be taking control of things here.
Regarding the market’s primary trend, a series of lower lows and lower highs have been present since mid-2011.
Daily timeframe:
Thanks to Monday’s 0.7% rally, AUD/USD crossed paths with trendline resistance (0.6671) and came within a few pips of bringing in supply from 0.7059/0.7031.
Indicator-based traders will note the RSI oscillator is heading into strongly overbought territory. It may also interest traders to note the 200-day simple moving average at 0.6660 is in the process of flattening following months of drifting lower.
H4 timeframe:
Supply from 0.7003/0.6983, although knocking some wind out of the Aussie’s upside attempt Friday, ceded ground on Monday. This implies 0.7003/0.6983 may serve as demand going forward and 0.7046/0.7036 could enter as supply today.
H1 timeframe:
A drop in the US dollar index Monday elevated the Australian dollar, kicking H1 candles through the widely watched 0.70 level.
Upside momentum is mildly subsiding into early Asia today, welcoming the possibility of a retest at 0.70. Technical studies note additional support resides around this region by way of two local trendline supports (0.6882/0.7012), perhaps pulling for 0.7050 assuming a successful retest.
RSI action has remained healthy above its 50.00 region since late May.
Structures of Interest:
Monthly supply at 0.7029/0.6664 remains in the fight, though the break of the associated trendline resistance indicates possible bullish follow-through. Lower on the curve, nonetheless, shows daily price gripping trendline resistance, located a few pips under supply at 0.7059/0.7031, which could, given a daily close under support at 0.6931, witness sellers re-enter the frame.
Despite the higher timeframes connecting with resistances, the lower-timeframes present the idea of further buying occurring today. A buy-the-dip scenario off 0.70 may see buyers make a run for H4 supply nearby at 0.7046/0.7036, and 0.7050 on the H1 timeframe.
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 optimistic theme, currently up 1.6%.
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:
Partially altered 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), was hit at 109.30 on Friday.
Monday threw in a surprise decline, snapping a four-day winning streak and plunging to the 200-day simple moving average at 108.39. Dynamic support/resistance often occurs off key moving averages, therefore a bounce higher from here should not really surprise.
H4 timeframe:
Supply at 110.10/109.54 made its debut Friday and directed the candles lower Monday, re-taking channel support (108.08) and a couple of demand areas at 109.03/109.23 and 108.87/108.48. The latter, therefore, could serve as supply today and pressure moves to demand at 108.10/107.79 (prior supply) and maybe even the fresh demand located at 107.51/107.76, merging with channel support (105.99).
H1 timeframe:
Monday’s decline, kicking off as the market headed into US trade, tunnelled through several key supports, including 109 and 108.50. With the 100-period simple moving average appearing to flatten out and room seen to approach 108 on this timeframe, 108.50 may come forward as resistance today, which aligns with the lower edge of H4 supply at 108.87/108.48.
Structures of Interest:
The market, according to technical studies on the daily timeframe, could rebound off the 200-day simple moving average at 108.39. This poses a threat to any selling done off 108.50 on the H1/H4 supply at 108.87/108.48. It will be interesting to see who triumphs here.
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, with the month currently recording gains of more than 3%. Neighbouring resistance can be found in the form of a trendline (1.7191), which, as you can see, is now within walking distance.
Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008.
Daily timeframe:
GBP/USD retained its underlying bid Monday, latching onto its eighth successive gain and dethroning the 200-day simple moving average at 1.2670. Although price action remains contained within the walls of supply at 1.2649/1.2799 (prior demand), the odds of a run to supply at 1.3021/1.2844 have certainly increased after taking the 200-day SMA.
Also note the RSI indicator recently entered overbought terrain on this timeframe.
H4 timeframe:
Partially altered from previous analysis –
Supply at 1.2699/1.2605 (prior demand) recently came under fire, with price penetrating and holding its upper boundary. Monday’s close above this base positions supply at 1.2851/1.2805 on the radar, an area boasting mouth-watering momentum out of its base and essentially representing a decision point to break the 1.2725 low (Feb 28).
H1 timeframe:
Partially altered from previous analysis –
Thanks to upside over the past couple of weeks, a 5-wave impulse structure formed, with wave 3 extended and waves 1-5 equalling. Together with the 1.27 level and resistance at 1.2740 could be enough to challenge buyers we feel.
Ultimately, traders will be looking to make it past the 1.26 level, providing sellers room to approach demand at 1.2511/1.2482.
Structures of Interest:
Daily price crossing above the 200-day simple moving average, along with H4 displaying scope to approach supply at 1.2851/1.2805, might weigh on downside attempts from 1.2640/1.27 on the H1. A close above H1 resistance at 1.2740 could, therefore, serve as a bullish cue to reach 1.28.
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.
Access 10,000+ financial instruments