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, as you can see, 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 is seen recovering off worst levels, on track to perhaps form another Japanese hammer candlestick pattern out of current demand.
With reference to the primary trend, price has exhibited clear lower peaks and troughs since 2008.
Daily timeframe:
Partially altered from previous analysis –
Pattern traders will note a large potential bearish pennant configuration, forming since late March between 1.1147/1.0635.
Wednesday had the common currency outperform against its US counterpart, lashing through the upper border of the current pennant formation. Yet, Thursday failed to deliver much follow through, capping a few pips ahead of the 200-day simple moving average, currently circling 1.1013.
H4 timeframe:
The Euro lost ground against the buck Thursday, establishing a top ahead of familiar supply coming in from 1.1057/1.1013, positioning the spotlight back on demand at 1.0925/1.0897 (prior supply). Should buyers continue to take a back seat, a breach of 1.0925/1.0897 highlights demand at 1.0799/1.0827, which, as you can see, crosses with a trendline support (1.0635).
H1 timeframe:
Data had Eurozone PMIs come in better than expected on Thursday, although still languishing below 50. US initial unemployment claims dropped for a seventh successive week, totalling nearly 40 million filings since mid-March.
Early US observed a whipsaw through orders at the widely watched 1.10 level, a move which scored highs at 1.1008, before collapsing to fresh demand at 1.0955/1.0946. It was no surprise to see this area cap downside yesterday, as the base effectively represents the decision point to topple supply (prior demand) at 1.0971/1.0990. This equates to strength.
Beneath current demand, technicians will note the 100-period simple moving average at 1.0920 lurks close by, as does the 1.09 handle.
Structures of Interest:
It was stated in Thursday’s analysis we may see a run of buy-stops above 1.10 to bring in 1.1015ish before sellers make their debut. While a fake above 1.10 did indeed take shape, we missed 1.1015.
Although H1 demand holds at 1.0955/1.0946, a whipsaw through this angle to 1.0925 could be seen, the top edge of H4 demand. Interestingly, the 100-period simple moving average is sited close by the H4 demand at 1.0920. Therefore, buyers may make an entrance from 1.0920/25 today.
AUD/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
April’s 370-pip advance has, as you can see, landed May within striking distance 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 has been present since mid-2011.
Daily timeframe:
Partially altered from previous analysis –
Supply at 0.6618/0.6544 remained in the fight Thursday, shattering a three-day winning streak off lows at 0.6410, by way of a bearish inside candle formation.
Nearby we have the 161.8% Fib ext. level at 0.6642, fixed a few pips from the 200-day simple moving average seen around 0.6658.
H4 timeframe:
Partially altered from previous analysis –
Recent analysis highlighted a falling wedge formed on approach to demand at 0.6356/0.6384, between 0.6561/0.6432.
The week kicked off penetrating the upper edge of the falling wedge, with Tuesday and Wednesday extending ground and crossing paths with the falling wedge take-profit target, measured by taking the base and adding this value to the breakout point (yellow), at 0.6595. As of yet, however, we have been unable to close above 0.6595.
Thanks to recent buying, though, supply at 0.6695/0.6664 is on the hit list.
H1 timeframe:
The value of the Australian dollar fell against the greenback Thursday, grasping 0.6550 in early trade after surpassing trendline support (0.6411). Heading into US trade buyers found legs and struck the base of the recent trend line, subsequently carrying the pair to lows at 0.6555 into the close.
Notably, we also see the RSI oscillator hiking under 50.00.
Structures of Interest:
Longer term, daily supply at 0.6618/0.6544 appears to be holding on by a thread, despite recent action, unlocking the possibility of bringing in the nearby 161.8% Fib ext. level at 0.6642 and 200-day simple moving average at 0.6658, a dynamic value essentially connecting with the underside of monthly supply at 0.6664.
Short term, 0.6550 may come under fire today, fuelled on the back of traders liquidating (selling) at the H4 falling wedge take-profit target around 0.6595.
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 remains subdued, ranging between 108.08/105.98.
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 early last week in strong fashion, boosted by demand at 105.70/106.66. The take-profit target out of the said pattern, traditionally measured by taking the value of the base and adding this to the breakout point (purple), sets an objective of around 109.30.
However, in order to reach the noted take-profit target, the 200-day simple moving average at 108.27 will need to be overthrown.
H4 timeframe:
Since bottoming at 105.99, H4 activity has been chalking up what appears to be a rising wedge pattern, with price action closing in on the apex. Take profit targets out of rising wedge patterns are commonly measured by taking the base value and adding this figure to the breakout point.
Supply at 108.10/107.79 is also present, along with a local demand area at 107.21/107.41. A break of the latter advertises moves to support priced in from 106.91.
H1 timeframe:
Trendline support (106.03), together with the 100-period simple moving average at 107.53, take up prime space on the H1 chart right now, with 108 serving as resistance.
Technically, though, current trendline support is on precarious ground, with H1 price retesting the underside of the base, as we write.
Structures of Interest:
Should H1 hold space under the current trendline support, this may be considered a forerunner to a break lower out of the H4 rising wedge, a move that could swarm H4 demand at 107.21/107.41 and attack H4 support at 106.91. Intraday day traders may also be watching for a H1 close beneath the 100-period simple moving average.
Further out, daily price displays room to approach the 200-day simple moving average at 108.26 and the falling wedge take-profit target around 109.30.
GBP/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Though under pressure, support at 1.1904/1.2235 remains in motion in May. A violation of this area, nevertheless, puts forward a 127.2% Fib ext. level at 1.1297. Neighbouring resistance, should we see an attempt at recovery, can be found in the form of a trendline (1.7191).
Concerning the primary trend, lower peaks and troughs have decorated the monthly chart since early 2008.
Daily timeframe:
Brought forward from previous analysis –
A few pips south of supply at 1.2649/1.2799 (prior demand), a double-top pattern formed at 1.2647, with last Wednesday consuming the neckline (April 21 1.2247) and establishing a potential take-profit target (purple) around 1.1855.
As of late, we have seen the British pound claw back some losses vs. the greenback, derailing downside attempts. However, traders, particularly pattern traders, will note the neckline at 1.2247 holds firm.
H4 timeframe:
Thursday, though eked out modest losses, finished somewhat neutral, clinging to channel support (1.2642 – prior resistance). It should also be noted local demand at 1.2184/1.2217 is in motion.
A break through demand could have traders make a play for channel support (1.2266) and maybe even fresh demand seen at 1.1771/1.1886, extended from March 25. Areas to the upside, aside from Tuesday’s high at 1.2296, can be seen from supply at 1.2477/1.2438.
H1 timeframe:
The 100-period simple moving average at 1.2208, coupled alongside the 1.22 level, withstood downside attempts heading into London on Thursday, prompting a mild recovery to highs at 1.2250, which, as you can see, held into the close.
Supply at 1.2295/1.2266 and the 127.2% Fib ext. level at 1.2265 remain upside targets today, with a breach of 1.22 placing 1.2150 on the radar.
Structures of Interest:
In similar fashion to Thursday we have the following to work with on Friday
Monthly price holds 1.1904/1.2235, though this area is positioned against the major trend.
Buyers and sellers butt heads around the underside of the daily double top neckline at 1.2247.
H4 price is seen challenging channel resistance-turned support from 1.2642/demand at 1.2184/1.2217.
H1 action is finding some love off 1.22, but stalled around 1.2250.
Taking the above into account, H4 buyers appear fragile, facing daily pressure off 1.2247. This may lead to H1 tunnelling through 1.22 today and unlocking the door for bearish scenarios to at least 1.2150.
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