EUR/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Following the break of long-term trendline resistance (1.6038) in July, and subsequent break of supply from 1.1857/1.1352 in August (2020), a modest correction surfaced. However, buyers making an entrance in November and December (registering fresh multi-month highs) reasons additional upside may be on the horizon, with ascending resistance (prior support – 1.1641) perhaps targeted.
The primary uptrend has been in play since price broke the 1.1714 high (Aug 2015) in July 2017.
Daily timeframe:
As 2020 drew to an end, price rotated lower in strong fashion just ahead of a descending wedge pattern’s (1.2011/1.1612) take-profit target at 1.2318 (yellow). Traders will also note there is room to advance until reaching the bullish flag’s (1.2177/1.2078) take-profit level at 1.2384 (purple).
Trend on this timeframe remains decisively north, launching a series of higher highs and higher lows since March 2020 (secondary trend). However, the RSI merits attention. Since early December, the indicator has fashioned a double-top pattern (around 75.00 – blue arrows). Note the neckline at 65.27 was penetrated on December 22 and retested into the close of the year.
H4 timeframe:
Unable to accumulate sufficient interest to reach supply at 1.2351/1.2333, EUR/USD crumbled Thursday and toppled 1.2255 support.
This resulted in price retesting the upper side of a symmetrical triangle (1.2271), arranged a few pips above trendline support (1.1602). Breaching the aforesaid trendline may liberate sellers, with little on the radar in terms of support until demand at 1.2040/1.2065.
H1 timeframe:
Heading into the early hours of US trading Thursday, 1.2250 support as well as local support at 1.2239 and the 100-period simple moving average broke down. As you can see, this cleared the runway for an approach to demand at 1.2205/1.2213, an area joined by a 61.8% Fib level at 1.2211 and a neighbouring 1.22 level.
Supply at 1.2287/1.2269 is also an area perhaps worthy of the watchlist this week, due to this being the zone where a decision was made to drive through 1.2250 bids.
Thursday also guided the RSI value deep into oversold waters and currently gifts traders with hidden bullish divergence.
Observed levels:
Long term:
The monthly timeframe reveals scope to carve out fresh highs. A 1.2095 daily support retest, however, could emerge prior to additional gains, targeting the two daily bullish pattern’s take-profit zones (1.2318/1.2384).
Short term:
Shorter-term framework indicates buyers may make a show in early trading this week. H4 displays two tight-knit trendline supports, while H1 reveals demand at 1.2205/1.2213, a corresponding 61.8% Fib level and 1.22 round number.
AUD/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
December traded higher by nearly 5 percent following November’s 4.5 percent rebound from demand at 0.7029/0.6664 (prior supply), consequently wrapping up 2020 in positive territory.
Interestingly, buyers, according to the monthly chart, appear free to explore as far north as 0.8303/0.8082 in the coming months, a supply zone aligning closely with trendline resistance (prior support – 0.4776).
In terms of trend, the primary downtrend (since mid-2011) remains south until breaking 0.8135 (January high [2018]).
Daily timeframe:
End-of year trade witnessed AUD/USD subdue resistance at 0.7647 to join hands with supply at 0.7756/0.7685, with Thursday developing a shooting star candle (generally interpreted as a bearish signal at peaks).
In spite of the supply area and bearish candlestick pattern, as well as the RSI recently forming bearish divergence, sellers are likely cautious (a daily close beneath 0.7647, nevertheless, may add confidence). This is due to the trend on this timeframe remaining north since early 2020, and monthly price seen calling for higher levels.
H4 timeframe:
The inability to reach resistance at 0.7752 saw H4 end the year by way of a solid bearish candle off multi-month pinnacles.
Demand at 0.7665/0.7644 (prior supply) is in position to welcome any downside attempts this week, while a break lower brings another demand to light at 0.7600/0.7625.
H1 timeframe:
With the RSI rounding off ahead of resistance at 80.85 Thursday and exiting overbought space, the value ended the session testing trendline support.
H1 price also curved a few pips ahead of 0.7750 resistance and softly penetrated 0.77 to the downside, throwing light on demand at 0.7674/0.7684. Beyond here, 0.7650 may demand attention.
Observed levels:
Long term:
Monthly price has supply at 0.8303/0.8082 in the crosshairs, suggesting scope to advance in January. Daily price reacting from supply at 0.7756/0.7685, however, could greet support at 0.7647. Should the support display signs of strength, price may dethrone current supply and head for monthly supply.
Short term:
H4 demand at 0.7665/0.7644 is interesting (located just beneath H1 demand at 0.7674/0.7684), an area joining with 0.7650 support (H1) and daily support at 0.7647. As such, this may be a location buyers make an entrance from this week.
USD/JPY:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Over the span of four years, USD/JPY carved out a descending triangle pattern between 118.66/104.62.
As you can see, though, December, down by 1 percent, pursued terrain south of 104.62.
104.62 ceding ground throws light on support from 101.70, with a break uncovering trendline support (76.15) and the descending triangle’s take-profit level at 91.04 (red).
Daily timeframe:
Support at 103.08 emerged on December 17 and held into the 2020 close.
Upstream, trendline resistance (111.68) is seen; light falls on demand at 100.68/101.85 (holds monthly support at 101.70), however, if sellers push through 103.08 support.
RSI fans will see the indicator retreated ahead of 57.00 resistance (capping upside since July) and finished 2020 under 50.00.
H4 timeframe:
Since mid-December, candlestick movement has been rangebound between resistance at 103.73 and daily support at 103.08.
Supply at 103.46/103.58 also merits consideration, essentially representing a zone where a decision was made to break numerous local lows between 103.19/103.40.
Downstream, beneath 103.08, price could make its way towards support at 102.06.
H1 timeframe:
Similar to the H4 chart, H1 is also establishing a range between the 103 level (merges with daily support at 103.08) and a supply zone from 103.39/103.29 (together with a 38.2% Fib level at 103.31).
Above, 103.50 resistance is in sight, along with the 100-period simple moving average. Below, traders have 102.50 support to target.
Also noteworthy is the RSI lingering above 50.00, entrenched within an ascending channel.
Observed levels:
Partly modified from previous analysis –
Long term:
Monthly price exhibiting a bearish theme below descending triangle support at 104.62 places a question mark on daily support at 103.08. A daily close below the aforementioned level unlocks the possibility of monthly support surfacing around 101.70 (located within daily demand at 100.68/101.85).
Short term:
A bearish scene may emerge from H1 supply at 103.39/103.29 in early trading this week. Movement above the area, however, could target 103.50 resistance (H1), a level based within H4 supply at 103.46/103.58.
Pulling through 103 this week is also likely to capture the attention of sellers, with all four timeframes then trading in unison, targeting at least 102.50 support (H1).
GBP/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
December ended higher by 2.5 percent, elevating GBP/USD to fresh multi-month highs and stirring trendline resistance (2.1161).
In terms of trend, however, the primary trend has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way – April high, 2018. In fact, the aforesaid high represents the next upside target on the monthly chart.
Daily timeframe:
Supply at 1.3622/1.3467, an area of importance since June 2018, succumbed to upside pressure heading into the 2020 close. Resistance at 1.3755 stands out above the aforesaid supply, with follow-through buying emphasising supply at 1.3996/1.3918.
The RSI reveals a rangebound environment, limited by support around 47.00 and resistance at the 66.00 region. There is also mild bearish divergence currently being seen.
H4 timeframe:
Reasonably heavy-handed resistance resides overhead on the H4 timeframe this week at 1.3711, surrounded by two Fib projection levels around 1.3700.
Support is seen at 1.3607, with additional bearish flow south of here shining light on demand at 1.3527/1.3556 and another demand from 1.3401/1.3446.
H1 timeframe:
Thursday, as you can see, formed an average pennant pattern between 1.3686/1.3629.
External levels to be mindful of are the 1.36 and 1.37 round numbers. Also interesting is the RSI forming a declining channel, effectively indicating bearish divergence.
Observed levels:
Long term:
Monthly trendline resistance is under pressure. December’s higher close places buyers in a potentially favourable position, with 1.4376 targeted (April high 2018). Possibly opposing upside, nonetheless, is daily resistance at 1.3755.
Short term:
H4 is seen wandering in no man’s land between resistance at 1.3711 and support from 1.3607. H1, on the other hand, is forming a pennant pattern. A breakout higher here highlights 1.37, followed by H4 resistance at 1.3711 and then daily resistance from 1.3755.
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