EUR/USD off best levels ahead of NFP

EUR/USD:

Monthly timeframe:

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

Closing the book on the month of June had EUR/USD—in the shape of a near-full-bodied bearish candle—touch gloves with familiar support at $1.1857-1.1352. 

A bullish revival shines light on 2021 peaks at $1.2349; additional enthusiasm welcomes ascending resistance (prior support [$1.1641]).

Month to date, August trades 0.3 percent lower.

Based on trend studies, a primary uptrend has been underway since price broke the $1.1714 high (Aug 2015) in July 2017. Furthermore, price penetrated major trendline resistance, taken from the high $1.6038, in July 2020.

Daily timeframe:

A closer reading of price action on the daily chart reveals the unit rotated lower, south of a falling wedge (between $1.1847 and $1.1975) take-profit target at $1.1943. North of the aforesaid barrier, the 200-day simple moving average calls for attention at $1.2004, followed by clear-cut supply at $1.2148-1.2092. To the downside, Quasimodo support falls in around $1.1688.

With regards to long-term trend, we have been somewhat rudderless since the beginning of the year, despite healthy gains in 2020.

The technical picture out of the relative strength index (RSI) shows the value shook hands with resistance at 51.36 as we transitioned into August. In the event a break of trendline support emerges, taken from the low 27.11, this unlocks a bearish scene and possible movement to oversold space. 

H4 timeframe:

Thursday, as you can see, worked with a tight trading range as the market awaits July’s non-farm payrolls data. 

In terms of the technical position, Quasimodo support is visible at $1.1800, accompanied by a 61.8% Fib retracement value at $1.1811 and a 1.618% Fib projection at $1.1806.

Near-term resistance stands between a 38.2% Fib retracement and a 61.8% Fib retracement at $1.1903 and $1.1889, respectively.  

H1 timeframe:

Much of the activity on the H1 scale is located between resistances around $1.1850 (and the 100-period simple moving average at $1.1862) and support from $1.1828—a previous Quasimodo resistance level. Note the aforementioned level brought with it trendline support, extended from the low $1.1755.

Interestingly, the technical spotlight also falls on $1.18 and neighbouring Quasimodo support at $1.1783 (dovetailing with Fibonacci studies).

As can be seen from the relative strength index (RSI), the indicator has been defending support at 36.94 since 20th July. Ultimately, however, the value remains under the 50.00 centreline, informing traders that average losses exceed average gains at the moment. Should a 50.00 breach unfold, resistance is placed at 78.97.

Observed levels:

From a short-term perspective, technical flow could be drawn in the direction of $1.18 on the H1 scale. A whipsaw through the big figure would be interesting as larger players may attempt to take advantage of sell-stops below the round number and rebound from H1 Quasimodo support at $1.1783 and Fibonacci support. 

AUD/USD:

Monthly timeframe: 

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

Following June’s 3.0 percent decline, and July tumbling 2 percent, this brings demand at $0.7029-0.6664 to light (prior supply). 

Month to date, August is up 0.8 percent.

Trend studies (despite the trendline resistance [$1.0582] breach in July 2020) show the primary downtrend (since mid-2011) is in play until breaking $0.8135 (January high 2018). 

Daily timeframe: 

July carving a bottom ahead of a 1.272% Fib projection at $0.7273 places resistance at $0.7453-0.7384 under pressure in early August. 

Thursday chalked up gains, boosted amidst risk flow. Sustained bullish interest shines light on the 200-day simple moving average at $0.7597, a dynamic value sheltered south of resistance at $0.7626.

With respect to trend, 2021 is underwater right now, emphasised by the close below the 200-day simple moving average at the beginning of July. As for momentum, the relative strength index (RSI) manoeuvred above resistance at 41.63 this week, clearing the path to the 50.00 centreline and trendline resistance, drawn from the high 80.12.

H4 timeframe: 

Fibonacci structure between $0.7293 and $0.7315—an area housing a 100% Fib projection at $0.7313 which is a level harmonic traders recognise as an AB=CD bullish formation—held firm heading into the later stages of July.

Harmonic AB=CD traders commonly set take-profit targets at 38.2% and 61.8% Fib retracement levels, derived from legs A-D. 

The 38.2% Fib retracement at $0.7408, as you can see, is proving stubborn resistance. Though in light of an uninspiring bearish presence (green zone), unable to penetrate $0.7376, buyers perhaps maintain the upper hand. Voyaging beyond $0.7408, therefore, could land the currency pair at the 61.8% Fib retracement drawn from $0.7482. 

H1 timeframe: 

Using the 100-period simple moving average as dynamic support, currently circling $0.7382, bullish forces are attempting to overthrow $0.74. Supply exists nearby at $0.7450-0.7436, yet this zone has already welcomed selling mid-July and therefore may be fragile. This implies a run through tops around $0.7485 could be on the cards to cross swords with $0.75.

Momentum, according to the relative strength index (RSI), is seen engaging with the 50.00 centreline. This follows the indicator levelling off just south of overbought. Crossing below 50.00 highlights weakness, displaying average losses exceed average gains. 

Observed levels:

Scope to navigate deeper water on the monthly timeframe places daily resistance at $0.7453-0.7384 in a favourable light, technically speaking. 

Against the backdrop of higher timeframes, the H4 chart shows offers drying up around the 38.2% Fib retracement at $0.7408, which may lead to the 61.8% Fib retracement at $0.7482 making an entrance. Short term, therefore, the charts could witness H1 form bullish scenarios off either $0.74 or the nearby 100-period simple moving average around $0.7382. Ultimately, any upside attempt is likely to take aim at $0.75 on the H1 scale, arranged just above the H4 timeframe’s 61.8% Fib at $0.7482.