Charts: Trading View
(Italics: Previous Analysis)
Primary Trend: bearish since early 2021
Tuesday witnessed Europe’s shared currency finish off best levels against its U.S. counterpart, following three back-to-back daily bearish candles. As the U.S. Dollar Index refreshes multi-decade pinnacles, the longer-term outlook on EUR/USD remains unchanged:
In conjunction with a clear primary bear trend, longer-term technical studies demonstrate scope to navigate deeper waters. Following weekly price rejecting Quasimodo support-turned resistance at $1.0778, and daily price engulfing $1.0638 support (now resistance), 2nd January low at $1.0340 (2017), along with daily Quasimodo support at $1.0377, deliver reasonable downside objectives.
For those who read Tuesday’s technical briefing, you may also recall the following:
In light of the above analysis, a pullback in this market could trigger a sell-on-rally scene from between $1.05 on the H1 and H4 resistance at $1.0483.
As evident from the shorter-term charts, price action responded to the lower edge of $1.05-1.0483 in early London on Tuesday, shaped by way of a H1 shooting star candle formation (bearish signal).
Going forward, in light of a clear downside bias in this market, and scope to explore lower on weekly, daily and H4 timeframes to $1.0340, $1.0377, and $1.0351 (Quasimodo support), respectively, a H1 push through $1.04 could be seen. Yet, between $1.0340 and $1.0377 is a location traders are encouraged to note given buyers may also make a show from here.
Primary Trend: bearish since early 2021 (decisive downside bias also evident on the monthly scale since 2011)
As the market digests the possibility of a 75-basis point hike in today’s FOMC rate decision, pro-cyclical currencies, such as the New Zealand dollar, the Canadian dollar and Australian dollar struggled to find a bid yesterday.
Tuesday’s technical briefing underlined the following for weekly structure:
Following the weekly timeframe’s textbook bearish engulfing candle last week, price action on the weekly timeframe is looking at support between $0.6632 and $0.6764, comprised a 100% Fibonacci projection, a price support, and a 50% retracement.
Out of the daily timeframe, Quasimodo support from $0.6901 is under siege, with a break shining light on support as far south as $0.6678 (nestled within weekly support mentioned above). This—coupled with the H4 timeframe cementing position beneath resistance at $0.6913 and H1 flow retesting the lower side of $0.69—signals H4 support at $0.6833 and H1 Quasimodo support from $0.6842 could be tested, followed by a possible test of $0.68.
Primary Trend: bullish since early 2021 (upside bias also evident on the monthly scale since 2012)
28th January high (2002) at ¥135.16 remains in play on the weekly timeframe as buyers show on Tuesday. Soured demand for the Japanese yen was evident amid another risk-off session, albeit not as energetic as Monday. Daily Quasimodo resistance-turned support is seen at ¥133.45, should sellers regain control, followed by a daily supply-turned demand area at ¥131.93-131.10. The daily chart’s relative strength index (RSI) also remains on the verge of chalking up early bearish divergence within overbought space.
With buyers still clearly at the helm, the fact the H1 chart is chalking up resistance around the ¥135 region that merges with H1 trendline support-turned resistance, drawn from the low ¥127.63, is unlikely to halt USD/JPY buyers. As such, a ¥135 breach could encourage breakout buying, targeting ¥136.
Primary Trend: bearish since February 2021 (decisive downside bias also evident on the monthly scale since 2008)
Sterling remained on the ropes on Tuesday, erasing more than 1.0 per cent versus the U.S. dollar. Week to date, we are 2.7 per cent lower, movement overthrowing Quasimodo support at $1.2164 on the weekly chart and landing price on the doorstep of another weekly Quasimodo support at $1.1958. Below here and we are looking at pandemic lows of $1.1410.
From the daily chart, support is positioned a touch north of the weekly support at $1.2018. Therefore, this is an area traders are likely watching—even more so knowing the daily relative strength index (RSI) is threatening possible (positive) divergence.
H4 Quasimodo support-turned resistance served well at $1.2166 in recent trading, guiding the currency pair to within reach of support at $1.1928. Recent downside also pencilled in a H1 decision point from, and sent price action beneath $1.20, a widely watched psychological figure.
In view of the above analysis, sellers are likely to try and hold under $1.20. However, road blocks in the form of weekly and daily support, as well as H4 support (see above), are present before traders can take aim at $1.19.
Primary Trend: bearish since November 2021
The major cryptocurrency received some much-needed respite on Tuesday, following Monday’s 15 per cent tumble. From a technical perspective, support at $20,000 remains firmly on the radar as a reasonable downside objective.
Where things become interesting is if we puncture the $20,000; this opens the gate to a pennant’s profit objective at $15,523. Note that the pennant’s lower edge was ruptured on 8th June and price subsequently shaped a five-day losing streak.
Interestingly, the relative strength index (RSI) pushed its way into oversold space in recent movement, casting light on indicator support coming in from 20.25.
Ultimately, similar to Tuesday’s technical briefing, this remains a sellers’ market for the time being, targeting $20,000, with the possibility of a dip to the $15,000 region.
Early Primary Trend: bearish since March 2022
Things are not looking too good for the harmonic Gartley pattern’s PRZ (Potential Reversal Zone) between $1,815 per ounce and $1,843 per ounce. Following Monday’s spirited decline—which moved price beneath the 200-day simple moving average at $1,842 per ounce—Tuesday extended losses and exposed Quasimodo support from $1,762 per ounce.
Continuation selling is perhaps in the offing (targeting the aforementioned Quasimodo support), supported by recent price movement and the current primary bear trend, but also the relative strength index (RSI) rejecting the lower side of the 50.00 centreline: negative momentum.
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