EUR/USD prime resistance calling for attention at $1.1767-1.1776


EUR/USD:

(Italics: previous analysis)

Weekly timeframe:

Technical elements on the weekly timeframe reveal EUR/USD has been somewhat stationary since mid-June. Deserving attention, however, is prime support at $1.1473-1.1583, a long-term base sharing chart space with a 100% Fib projection at $1.1613 and 1.27% Fib extension at $1.1550. Note the 100% value represents a harmonic AB=CD bullish point, which brings a 1.13 BC Fibonacci extension also to table at $1.1623.

Also technically interesting on the weekly scale is the possibility of long-term sell-stops residing south of late September lows at $1.1612 (2020).

In addition, we see trend on the weekly chart has largely been bullish since early 2020.

Daily timeframe:

Quasimodo support at $1.1689 welcomed healthy buying on Thursday, clipping a portion of early-week losses.

Sustained interest to the upside on this timeframe seats $1.1900ish resistance in sight. The opening above $1.1900 shines light on prime resistance at $1.2115-1.1990 and the 200-day simple moving average at $1.1981. 

Failure to command a bullish position above $1.1689 swings the technical pendulum in favour of eventually reaching Fibonacci support between $1.1420 and $1.1522 (glued to the lower side of the weekly timeframe’s prime support at $1.1473-1.1583).  

Momentum studies, according to the relative strength index (RSI), shows the value moving in on the 50.00 centreline. Reclaiming 50.00+ indicates positive momentum: average gains exceeding average losses. 

H4 timeframe:

The $1.1690-1.1705 decision point had its lower boundary clipped late US hours Wednesday—a direct response to the latest FOMC policy meeting. Sell-stops beneath $1.1690-1.1705 potentially helped fuel recovery gains that, in recent hours, hauled the pair above resistance at $1.1742, a previous Quasimodo support base.

Quasimodo resistance at $1.1771, therefore, demands attention.

H1 timeframe:

For those who read Thursday’s technical briefing you may recall the following (italics):

$1.1742 commanding position could swing the pendulum in favour of a test of $1.17 on the H1. And by testing the psychological level, a whipsaw south to daily Quasimodo support at $1.1689 is a potential scenario to have noted on the technical watchlist. $1.1689 bids feeding off sell-stops below $1.17 might be enough to chalk up a bullish wave.  

As evident from the daily and H1 charts, the above came to fruition, aided by USD downside (DXY 0.5 percent). Not only that, additional sell-stops were tripped under the H4 timeframe’s decision point at $1.1690-1.1705. 

Going forward, technical eyes are likely on prime resistance coming in at $1.1767-1.1776 on the H1, joined by supply at $1.1762-1.1774 and H4 Quasimodo resistance mentioned above at $1.1771. Interestingly, meaty stops are perhaps located a touch above the Fed-induced high at $1.1755, liquidity that may excite sellers from $1.1767-1.1776/$1.1762-1.1774 on the H1.

Observed Technical Levels:

Short-term flow is geared towards a whipsaw above Wednesday’s high at $1.1755, a move perhaps drawing sellers into the market from $1.1767-1.1776/$1.1762-1.1774 on the H1. Focus, however, is directed to $1.1767-1.1776, as this area houses H4 Quasimodo resistance from $1.1771.

$1.1767-1.1776 sellers will likely adhere to strict trade management, as daily buyers off Quasimodo support from $1.1689 could take aim at higher levels. 

AUD/USD:

(Italics: previous analysis)

Weekly timeframe:

The weekly timeframe has the currency pair retesting prime support at $0.6968-0.7242. 

Since printing a two-week recovery in late August, however, the unit has been fighting to entice fresh bullish interest. 

Failure to command position from $0.6968-0.7242 opens up support at $0.6673. Buyers regaining consciousness, nevertheless, has prime resistance at $0.7849-0.7599 to target. 

Trend studies on the weekly scale show we’ve been higher since early 2020. Consequently, the response from $0.6968-0.7242 could STILL be the beginnings of a dip-buying attempt to merge with the current trend.

Daily timeframe:

From the daily chart, attention is concentrated on Fibonacci support at $0.7057-0.7126 and prime resistance at $0.7506-0.7474.

Outside of the aforementioned areas is a Quasimodo support-turned resistance at $0.7621 and the 200-day simple moving average at $0.7596. Nearby we also note a 100% Fibonacci projection at $0.7604, a 61.8% Fibonacci retracement at $0.7585 and a 1.618% Fibonacci extension at $0.7644.

To the downside, support also falls in around $0.7021.

Those who follow the relative strength index (RSI) will acknowledge the indicator zeroing in on the 50.00 centreline, coming from below. Moving above the latter signals momentum is to the upside. 

H4 timeframe:

Upbeat market sentiment and the US dollar index registering losses witnessed AUD/USD climb resistance at $0.7281 on Thursday, leaving the $0.7200-0.7218 decision point unchallenged. 

Resistance drawn from $0.7317 entered the fray in recent hours, a level boasting historical significance. Should we overthrow current resistance and (potentially weak) supply, touching gloves with a decision point at $0.7395-0.7410 may be in the offing. 

H1 timeframe:

Thursday saw bulls take on $0.73 and hold the level as support, a move shifting resistance at $0.7322 in the headlights. Although the said resistance is a potential headwind for the currency pair, buy-stops above the level might fuel an assault on Quasimodo resistance at $0.7339. This is a short-term level, therefore, that has the capacity to entice sellers. 

Failure to contain buyers, continuation moves could shape in the direction of prime resistance from $0.7401-0.7379. 

Observed Technical Levels:

Having recently observed H1 action break/retest the $0.73 figure to the upside, and understanding price is showing signs of bullish life from weekly prime support at $0.6968-0.7242, H4 resistance at $0.7281 is unlikely to deliver much to write home about. 

With that being said, buyers may remain in the driving seat today, taking on the noted H4 resistance as well as H1 resistance from $0.7322 and Quasimodo resistance at $0.7339 to target H1 prime resistance at $0.7401-0.7379. Although do note that $0.7339 is well placed to welcome a short-term bearish pop. 

USD/JPY:

(Italics: previous analysis)
 
Weekly timeframe:
 
¥108.40-109.41 demand recently welcomed a bullish ripple. Yet, before getting too enthusiastic, this area has failed to ignite buyers since mid-July. 
 
Nevertheless, recognising the area derives additional backing from neighbouring descending resistance-turned support, extended from the high ¥118.61, an advance may eventually emerge to familiar supply at ¥113.81-112.22.
 
Daily timeframe:
 
The uninspiring vibe out of weekly demand is demonstrated by way of a consolidation on the daily timeframe between prime support at ¥108.96-109.34 and resistance from ¥110.86-110.27. 
 
Range resistance—thanks to surging US Treasury yields—acknowledged price action on Thursday, which if a break comes to pass brings light to neighbouring Quasimodo resistance at ¥111.11.
 
Based on the relative strength index (RSI), the value remains confined in similar fashion to current price movement, between 40.87 and 56.85. Technicians will recognise the indicator tests the mettle of the upper range limit, as we write.
 
H4 timeframe:
 
Thursday’s continuation rally arranged a decision point at ¥109.76-109.98, and manoeuvred price to within a stone’s throw from two Quasimodo resistances at ¥110.48 and ¥110.42. The aforesaid levels also work with a 1.272% Fibonacci extension at ¥110.37 and a 78.6% Fibonacci retracement at ¥110.44.
 
Note the H4 Quasimodo levels and associated Fibonacci structure resides within the daily timeframe’s range resistance at ¥110.86-110.27.
 
H1 timeframe:
 
A closer examination of price action has the H1 candles closing in on Quasimodo resistance at ¥110.32, which happens to align closely with channel resistance, etched from the high ¥109.90. A response from noted structure could turn price towards support at ¥110.11, a previous Quasimodo resistance base. 
 
¥110.32 interest are urged to pencil in the possibility of a whipsaw higher to take in willing sellers around H4 resistance between ¥110.48 and ¥110.37. Notice that a pop higher will also trip any stops located above ¥110.32, perhaps delivering enough liquidity to persuade heavier selling interest. 
 
Observed Technical Levels:
 
Short-term focus directs emphasis towards Quasimodo resistance at ¥110.32 on the H1, and adjoining channel resistance. However, as referred to in the above text, a pop higher to bring in any H4 seller interest around resistance at ¥110.48-110.37 could also be on the cards before sellers attempt to put in an appearance. 
 
In conjunction with lower timeframe resistances, the daily timeframe’s range resistance is also currently in play at ¥110.86-110.27, alongside the chart’s RSI indicator also displaying range resistance. 
 
The only caveat to the above, of course, is weekly demand coming in at ¥108.40-109.41, albeit an area that’s been unable to inspire much bullish activity of late. 

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