EUR/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
The month of February witnessed EUR/USD revisit the upper limit of demand at 1.0488/1.0912 – a noteworthy area given the momentum derived from its base – and pencil in an appealing (bullish) hammer candlestick pattern.
Upside this month, currently trades +2.24%, manoeuvred the pair into demand-turned supply at 1.1857/1.1352, though, as of current price, left long-term trendline resistance (1.6038) unchallenged. Price is seen retreating from the said area, opening up the possibility of a revisit to demand mentioned above at 1.0488/1.0912.
The primary downtrend remains in motion and has remained lower since 2008, exhibiting clear lower peaks and troughs.
Daily timeframe:
Partially altered outlook from previous analysis –
Snapping a three-day winning streak, daily price retreated from supply at 1.1540/1.1486 in recent trade, down more than 130 points. Supply-turned demand at 1.1159/1.1233 resides close by, intersecting closely with a familiar trend line support (1.0879), active since October 2019. A breach of the noted demand welcomes the 200-day SMA, currently circulating around the 1.11 neighbourhood.
What’s also notable from a technical perspective is the RSI indicator exiting overbought levels, fading peaks at 82.00, values not seen since March 2008.
H4 timeframe:
Supply-turned demand at 1.1294/1.1271 contained downside, guiding EUR/USD to a session high at 1.1366, a touch south of 1.1399/1.1376. A break lower from this point shines the spotlight on fresh demand priced in at 1.1218/1.1245. This was the decision point to break the 1.1239 December 31st high, therefore boasting significance.
H1 timeframe:
Overall, the euro wrapped up Wednesday flat against the buck, ahead of today’s ECB decision and press conference. Analysts expect the central bank to stand pat on rates.
The US dollar index ended Wednesday on top, fading session lows at 95.91. EUR/USD technical movement has the candles flagging beneath the 100-period SMA and sub 1.13. An interesting area of support forms around the 1.12 handle (yellow) between 1.1196/1.1247, comprised of Fib studies.
Structures of Interest:
1.1196/1.1247 may hold downside today in the event it is brought into motion. Not only is it an attractive Fib collection, the area is glued to the top edge of supply-turned demand at 1.1159/1.1233 on the daily timeframe and encapsulates H4 demand highlighted above at 1.1218/1.1245.
A rotation out of 1.1196/1.1247 has the underside of 1.1294/1.1271 to target, and the 1.13 handle on the H1. Much more than this is unlikely, owing to monthly price trading from supply.
AUD/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Demand at 0.6358/0.6839 remains in the fight, yet price struggles to pencil in anything of note to the upside after clipping its lower edge, currently trading in the shape of a doji indecision candle. An eventual break of the said demand zone has another layer of demand close by at 0.6094/0.5866, while a recovery could eventually lead to trendline support-turned resistance (0.4776) making an appearance, followed by supply at 0.8303/0.8082.
The primary trend in this market continues to face a southerly trajectory.
Daily timeframe:
Outlook brought forward from recent analysis –
0.6680ish (red oval) welcomed price action on Monday, as did long-term demand drawn from late 2008 at 0.6330/0.6245 (note this demand contained the mild break of monthly demand mentioned above at 0.6358/0.6839). Proven supply also resides at 0.6778/0.6731, aligning with trendline resistance (0.7393).
Tuesday observed a reasonably decisive move lower, wrapping up a touch off session lows at 0.6462, while Wednesday failed to produce much, in terms of movement, closing at -0.30%. Technically speaking, there’s little stopping additional loss on this timeframe until reaching demand underscored above at 0.6330/0.6245.
The RSI recently exited oversold territory, though has been unable to conquer 50.00 thus far.
H4 timeframe:
0.6511/0.6542 held as a demand-turned supply area Wednesday, shaped by way of three notable selling wicks, a common formation at peaks.
This could, given space to manoeuvre lower on the daily timeframe, see price head back to the 127.2% Fib ext. point at 0.6351.
H1 timeframe:
Technical movement on H1 charts saw enthusiasm fade ahead of 0.6550 into US trade, located just beneath the 100-period SMA, eventually dipping south of 0.65 into the close. The increasingly bearish view in this market is likely to draw lower prices today, albeit after a potential retest at 0.65, targeting 0.6457ish, a combination of a 61.8% Fib retracement and a 161.8% Fib ext. point.
With reference to the RSI, the value recently bottomed a touch above oversold levels, and is currently circulating around 40.00.
Structures of Interest:
Indecisive action present on the monthly timeframe within the lower boundary of demand casts a cloud over long-term buying. This is further emphasised on the daily timeframe, showing room to press as far south as demand from 0.6330/0.6245, as well as the H4 candles holding recently broken demand at 0.6511/0.6542.
H1 price breaking 0.65, therefore, could be of interest for intraday sellers, targeting 0.6457. Clearance of this support shifts focus to 0.64.
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 (118.66/104.62). February had price elbow a touch outside the upper boundary of the aforementioned descending triangle to 112.22, though retreated lower and produced a shooting star pattern into February’s end.
March, so far, breached the lower edge of the descending triangle, yet recovered in reasonably strong fashion, leaving nearby demand at 96.41/100.81 unchallenged.
Right now, March trades lower by 3.00%.
Daily timeframe:
Partially altered from previous analysis –
Monday’s near-300-point decline dipped through a number of key technical supports and landed within demand fixed from 100.68/101.85 (an area glued to the top edge of monthly demand underscored above at 96.41/100.81).
Recent technical developments saw Tuesday chalk up a sizable counterattack, reclaiming all of Monday’s losses and retesting demand-turned supply at 105.57/106.17, along with joining 38.2% Fib retracement at 105.39. Wednesday pencilled in a bearish position off the said zone, though whether this was enough to convince sellers is difficult to judge.
H4 timeframe:
Partially altered from previous analysis –
Tuesday tested supply at 105.75/105.17, initially holding price to lows at 103.22 before marginally clipping the top edge of its area, registering highs at 105.91. Although the recent move to highs is unlikely sufficient to have cleared all sellers from the zone, it is worth noting supply seen at 108.15/107.64, in the event we push for higher ground.
Another constructive development on this timeframe is a potential bullish pennant pattern, considered a continuation formation. A breakout to the upside could see a rally to 109.68 (take-profit target measured by taking the move formed prior to the pennant pattern, and adding this value to the breakout point).
H1 timeframe:
USD/JPY remained under pressure as risk-off flows continued to dominate markets Wednesday. 105 remains a stubborn resistance, with the 100-period SMA currently providing support.
Of interest, a combination of a 127.2% Fib ext. point at 106.63, a 78.6% Fib retracement at 106.34 and another 127.2% Fib ext. point at 106.26 (yellow) is seen loitering a few points above 106. Before this, though, aside from 105, traders must contend with trendline resistance (108.53).
With respect to the RSI, the indicator is seen hovering above 50.00, after dipping from overbought territory.
Structures of Interest:
Monthly price suggests buyers may now have the upper hand after regaining a foothold back within its descending triangle. Contrary to this, daily price fades a demand-turned supply zone at 105.57/106.17.
In conjunction with monthly flow, H4 movement is seen chalking up a potential bullish pennant pattern, though this is unlikely to come to fruition if we’re unable to conquer 105 on the H1.
Should a H1 close form above 105, along with a H4 close outside of the current bullish pennant pattern, this may interest buyers, regardless of daily structure.
GBP/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Early February 2018 saw the pair reject 1.4520/1.3893, a 50.0% retracement and 38.2% Fib retracement combination (red). This, along with trendline resistance (2.1161), remains a well-rounded resistance area to keep an eye on long term.
In recent months, a recovery formed off 1.1904/1.2235, clocking highs of 1.3514 in December 2019 and breaking the 1.3380 March 2019 high. The month of February declined nearly 3.00%, with March attempting to reclaim lost ground.
Daily timeframe:
Partially altered from previous analysis –
After reconnecting with familiar supply at 1.3303/1.3184, following a whipsaw through channel resistance (1.3284), daily price chalked up a spirited retreat Tuesday. Down more than 220 points, or 1.70%, GBP/USD extended losses Wednesday and now faces nearby demand at 1.2649/1.2799, dovetailing closely with channel support (1.2954) and the 200-day SMA, currently circulating around 1.2687.
In terms of the RSI indicator, we can see the value dipped through 50.00 in recent trade.
H4 timeframe:
After slicing through demand at 1.2859/1.2875 and retesting the underside of demand-turned supply at 1.2947/1.2969, GBP/USD fell to lows of 1.2804, registering its second consecutive daily loss. Demand at 1.2768/1.2813 made its debut; the area also holds a deep 88.6% Fib retracement within at 1.2775.
Traders will note the current H4 demand is glued to the top edge of daily demand mentioned above at 1.2649/1.2799.
H1 timeframe:
Sterling witnessed initial weakness Wednesday after the Bank of England (BoE) became the latest central bank to lower rates, coming to market with an emergency 50bps reduction in the bank rate from 0.75% to 0.25%. Despite moves to lows at 1.2830, the pair swiftly reversed though failed to sustain gains above the 1.2950 region/H1 channel resistance (1.3199) and ended the day a few points off 1.28.
Structures of Interest:
With the H1 RSI testing oversold levels, H1 channel support (1.2830) and the 1.28 handle in view, coupled with H4 demand entering the fray at 1.2768/1.2813, bolstered by daily demand at 1.2649/1.2799, this may be enough to encourage buying, at least back to 1.2850 and the underside of H4 demand-turned supply at 1.2859/1.2875.
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