Charts: Trading View
Brief Economic Review:
- The European Central Bank left interest rates unchanged, though did state that over the coming quarter it would ‘moderately’ cut back on PEPP purchases. The question is what is moderate?
- Weekly initial unemployment claims out of the US slipped to 310,000 versus economist forecasts of around 335,000.
(Unchanged from previous analysis) Technical observations out of the monthly chart reveals large-scale support at $1.1816-1.1299 welcomed buyers in recent trade, with prime support resting at $1.1473-1.1583 which happens to share chart space with a 100% Fib projection at $1.1613. This, alongside a clear uptrend since early 2020, echoes a technically bullish picture, placing the retracement slide on the daily timeframe from late July tops at $1.1909ish in question. North of $1.1909, buy-stops could fuel moves to prime resistance at $1.2115-1.1990, a place active sellers may reside.
Meanwhile, H4 demand at $1.1783-1.1810 remains active, yet appears brittle. Prime support inhabits $1.1764-1.1776, with sell-stops beneath the aforementioned demand potentially helping to fuel willing $1.1764-1.1776 bids.
The H1 chart has the currency pair within reach of a Fibonacci cluster around $1.1844—a base with enough energy to possibly draw short-term bearish interest. The chart also centres focus on $1.18. Although $1.18 joins hands with a 61.8% Fib retracement and a 1.618% Fib projection at $1.1797, Quasimodo resistance-turned support at $1.1775 (unites with prime H4 support at $1.1764-1.1776) is positioned to welcome any $1.18 whipsaw.
(Unchanged from previous analysis) According to the weekly timeframe, August dipped a toe in prime support at $0.6968-0.7242—an area inspiring a two-week bullish phase. Chart studies point to $0.7849-0.7599 as a potential upside objective. In terms of trend, the unit has been higher since the beginning of 2020. Interestingly, the daily timeframe shows a prime support/target made an entrance at $0.7286-0.7355 this week, following a dip from prime resistance at $0.7506-0.7474.
The H4 continues to languish south of the decision point from $0.7395-0.7410. Stacked demand is close by between $0.7282 and $0.7343, and prime support rests at $0.7236-0.7266. H1 carved out a fresh short-term peak Thursday, touching $0.7395. While current price encourages a bullish setting, the possibility of a whipsaw lower through demand at $0.7331-0.7350 to prime support at $0.7310-0.7322 (joined by a decision point at $0.7307-0.7324) is an alternative bullish scenario worth noting.
A $0.7331-0.7350 whipsaw to $0.7310-0.7322 dovetails not only with daily prime support at $0.7286-0.7355, but also direction out of monthly prime support at $0.6968-0.7242.
Since mid-July, ¥108.40-109.41 demand has been in focus on the weekly timeframe. Though the lacklustre bullish vibe from the area is clearly visible on the daily scale by way of a range between prime resistance at ¥110.86-110.27 and support coming in at ¥108.96-109.34. Until a decisive break outside either of these areas materialises, we’re dealing with a rangebound market on the daily timeframe.
¥110.82-110.39 supply on the H4 chart has proven stubborn. Quasimodo support at ¥109.48 calls for attention, should sellers remain in the driver’s seat. With this on board, sellers welcoming the H1 decision point at ¥109.84-109.76 and targeting support from ¥109.59 could be in the offing. Note that below the latter, H4 Quasimodo support is seen at ¥109.48.
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