September 8th 2020: Holiday-Thinned Trading Conditions Has DXY Modestly Hold 93.00

EUR/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

August nudged to a fourth successive monthly gain against the US dollar, adding nearly 1.5 percent. The move also toppled long-term trendline resistance (1.6038) and supply from 1.1857/1.1352. This argues additional moves to the upside may be on the horizon, with trendline resistance (prior support – 1.1641) on the radar as the next target.

What could potentially hamper upside, though, is the primary downtrend (since July 2008) which remains intact at least until 1.2555 is engulfed (Feb 1 high [2018]).

Daily timeframe:

Brought forward from previous analysis –

Efforts to extend higher remain contained within the parapets of a rising channel pattern (1.1695/1.1909), in addition to supply at 1.2012/1.1937 making an entrance on August 18, extended from May 2018.

Trendline support (1.0774) currently intersects with the aforesaid channel support, potentially reinforcing the area in the event a pullback/retest emerges. On the other hand, immersing the aforementioned supply favours moves to as high as resistance at 1.2095.

Trend traders, however, will note that alongside the monthly trendline break, price, based on the daily timeframe, has trended higher since late March.

H4 timeframe:

Partially altered from previous analysis –

Viewing price action from the H4 timeframe reveals EUR/USD recently found a degree of support from a trendline formation (1.1711). Newly formed supply 1.1878/1.1851, however, is proving stubborn, with additional backing from another area of supply at 1.1884/1.1908, a prior demand area.

Burrowing to lower levels potentially welcomes demand at 1.1682/1.1716 back into position, yet taking over the two aforesaid supply areas throws light on resistance at 1.1988.

H1 timeframe:

Partially altered from previous analysis –

In similar fashion to the H4 chart, H1 recently entered into a consolidation phase between 1.18 psychological support and supply at 1.1880/1.1860 (prior demand). Additional resistances to consider are the 100-period simple moving average, supply at 1.1913/1.1898 and 1.19. In terms of support, traders are likely leaning towards demand at 1.1761/1.1774, formed August 21, and 1.1750 support.

Momentum, as shown via the RSI oscillator, is slowing as we cross into deeper terrain under 50.00.

Structures of Interest:

Brought forward from previous analysis –

Monthly price recently unearthed the possibility of further upside north of supply at 1.1857/1.1352, indicating the daily timeframe’s current uptrend may gather traction and, consequently, topple daily channel resistance (1.1909) and supply from 1.2012/1.1937.

The scope for manoeuvre is limited on the H4 timeframe between supply at 1.1878/1.1851 and trendline support.

H1 offers a 60-pip range to work with between supply at 1.1880/1.1860/1.18. As such, given the direction of the current trend, buyers are likely to watch for bullish strategies to form around the lower edge of the current range.

Also of particular interest is the 1.1750 support on the H1 timeframe; the level shares space with merging daily channel support (1.1695) and trendline support (1.0774), offering reasonably appealing bullish confluence should we reach this far south.

September 8th 2020: Holiday-Thinned Trading Conditions Has DXY Modestly Hold 93.00, FP Markets

AUD/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

July, coupled with August’s 3.3% follow-through, witnessed supply at 0.7029/0.6664 and intersecting long-term trendline resistance (1.0582) abandon its position. Technically, buyers 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).

While price has removed trendline resistance and notable supply, traders might still want to take into account that the primary downtrend (since mid-2011) remains south until breaking 0.8135 (January high [2018]).

Daily timeframe:

Brought forward from previous analysis –

Supply at 0.7453/0.7384 maintains a relatively dominant presence on the daily timeframe – price slid 1 percent over the course of last week, south of YTD peaks at 0.7413. Although Friday concluded significantly off worst levels, extending the recent retracement slide could lead to demand at 0.7131/0.7192 making an entrance, a drop-base-rally area.

The trend, according to the daily timeframe, however, has been higher since bottoming in late March. Indicator-based traders will also note the RSI visibly exited overbought space and is now poised to approach support around 53.00.

H4 timeframe:

Brought forward from previous analysis –

Demand at 0.7216/0.7240 arrived on the scene late Friday, pulling things back to supply at 0.7300/0.7282.

Unseating current supply has supply from 0.7339/0.7357 (prior demand) to possibly target. Beyond current demand, though, trendline support (0.7076) is in sight.

H1 timeframe:

AUD/USD enters Asian trading on Tuesday pretty much stationary, clinging to demand at 0.7260/0.7279, with technical resistance offered at the 0.73 level, the 100-period simple moving average and supply coming in from 0.7303/0.7316. Downside pressure could have the pair greet 0.7250 support, stationed just ahead of a 61.8% Fib level at 0.7241 (green), a level that contained downside on Friday.

As for the RSI indicator, 54.00 has proven a stable area of support and resistance since August 25, therefore given the recent test as resistance, momentum could potentially continue to fade today.

Structures of Interest:

Brought forward from previous analysis –

While monthly action forecasts further buying over the coming months to 0.8303/0.8082, daily price suggests AUD/USD may drop to demand at 0.7131/0.7192 before we turn for higher levels.

Against the backdrop of higher timeframe activity, H4 is testing supply at 0.7300/0.7282, yet H1 is addressing demand at 0.7260/0.7279.

Taking in the above, reacting from H4 supply this week could send price as low as 0.72 on the H1, aligning not only with the upper border of daily demand from 0.7192 but also closely with trendline support on the H4 timeframe, from 0.7076.

Reacting from H1 demand, on the other hand, implies we’re likely to dethrone H4 supply and leave daily demand unchallenged. Although H1 supply resides at 0.7303/0.7316 (prior demand), intraday/scalping long opportunities may be found between 0.73 and H1 supply at 0.7346/0.7333 (fastened to the underside of H4 supply at 0.7339/0.7357).

September 8th 2020: Holiday-Thinned Trading Conditions Has DXY Modestly Hold 93.00, FP Markets

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 carving out a descending triangle pattern between 118.66/104.62. July sunk nearly 2 percent, testing the lower boundary of the descending triangle, while August ended off best levels, effectively unmoved.

Areas outside of the noted triangle 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 –

Supply from 107.58/106.85 has proven a tough nut to crack (an area sharing space with trendline resistance from 111.71 and located just under the 200-day simple moving average at 107.86) in August.

Despite the week’s recent advance, trading to the downside is a possible scenario to 104.62 (monthly support). If a break comes to pass here this likely shifts interest to daily demand at 100.68/101.85, drawn from 2016.

With reference to the RSI, we are pretty neutral right now, hovering around 50.00.

H4 timeframe:

Brought forward from previous analysis –

Following the recently completed ABCD bearish structure at 106.46, combined with trendline resistance (105.10 – prior support), buyers have struggled to find any significant demand. Seeking higher levels focuses attention on the 106.94 high (August 28), as well as supply at 107.37/107.17, followed by another supply stationed at 107.60/107.42.

Pursuing levels beyond last Thursday’s trough at 106.00, on the other hand, has demand at 105.57/105.76 likely to call for attention.

H1 timeframe:

106.50 resistance elbowed into the limelight last week, with Friday revisiting the base. This, together with H4 ABCD resistance and the recent H1 trendline support breach (105.20), delivers powerful intraday bearish confluence to work with.

The 100-period simple moving average, as you can see, offers dynamic support at the moment, movement which could force a trendline retest. Diving south, however, will likely take on the 106 level, with a break exposing demand at 105.55/105.73.

In terms of where we stand concerning the RSI oscillator, like the daily timeframe, we’re pretty neutral right now.

Structures of Interest:

Partially altered from previous analysis –

Monthly price holds off support at 104.62, yet gains are currently capped by daily supply at 107.58/106.85.

The ABCD reaction on the H4 has forced price beyond the current H1 trendline support, which could prompt a revisit to 106, a move likely to persuade current ABCD sellers to partially cash in on profits. However, follow-through selling beyond 106 is also possible to H4 demand at 105.57/105.76 (essentially representing the same range as H1 demand at 105.55/105.73).

September 8th 2020: Holiday-Thinned Trading Conditions Has DXY Modestly Hold 93.00, FP Markets

GBP/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

GBP/USD finished 2.2 percent higher in August, extending space beyond the recently penetrated long-term trendline resistance (1.7191).

Despite the primary trend facing lower since early 2008 (unbroken until 1.4376 gives way – April 2 high [2018]), the break of current trendline resistance has September (despite trading lower by 1.5% at the moment) potentially targeting another trendline resistance taken from 2.1161.

Daily timeframe:

GBP/USD exhibited a one-sided market Monday amid mounting concerns regarding a no-deal Brexit, consequently extending the recent retracement slide from year-to-date peaks at 1.3483. The pair slipped through support at 1.3201, unearthing demand from 1.3021/1.2844 and the nearby 200-day simple moving average at 1.2738.

The RSI indicator also recently penetrated trendline support, currently trading at 50.00.

H4 timeframe:

Demand at 1.3116/1.3160 pushed itself into view yesterday, receiving price action following a rejection off supply at 1.3319/1.3278 (a rally-base-drop formation) and a trendline support (1.2260) breach. Traders will also note two trendline supports reside close by from 1.2982 and 1.3005.

H1 timeframe:

Mid-way through the European morning session Monday witnessed buyers step aside from 1.32, leading to support at 1.3170 also giving way. 1.3150 currently stands as intraday support, with 1.32 possibly open to be tested, along with trendline resistance (1.3482).

Meanwhile, the RSI remains languishing under 48.16 resistance, with price recently rebounding from oversold status.

Structures of Interest:

Longer term, the monthly chart suggests buyers have some fuel left in the tank, with monthly action looking towards trendline resistance (2.1161). Conversely, we recently had daily price cross under support at 1.3201.

H4 currently engages with demand at 1.3116/1.3160, while H1 is bouncing from 1.3150 support, targeting 1.32 resistance (assuming we get past 1.3170 resistance), as well as trendline resistance (1.3482).

On account of current analysis, the daily timeframe and possibly H1 flow (if we remain under trendline resistance – this could actually be a location we see active sellers make an entrance) suggests lower prices could be on the cards. The monthly timeframe, however, while the chart could accommodate a pullback, indicates higher levels, as does H4 price off demand at 1.3116/1.3160.

September 8th 2020: Holiday-Thinned Trading Conditions Has DXY Modestly Hold 93.00, FP Markets

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