EUR/USD testing $1.17, reinforced by daily support at $1.1689

EUR/USD:

(Italics: previous analysis)

US hours Wednesday welcomed what appears to be a bullish Fed. While the FOMC left its target benchmark interest rate unchanged, a key note from the central bank was that ‘bond-buying may soon be warranted’. This immediately saw the US dollar—the US dollar index—spike to highs of 93.30 before withdrawing to lows ahead of 93.00 shortly after.  

As evident from the H4 timeframe on EUR/USD, the aftermath of FOMC action watch the currency pair touch gloves with the $1.1690-1.1705 decision point, and subsequently confront resistance from $1.1742, a previous Quasimodo support base. Despite $1.1742 currently serving well, and the H1 timeframe’s Fibonacci cluster around $1.1756 also delivering a ceiling, traders are urged to pencil in prime resistance coming in at $1.1767-1.1776 on the H1, joined by supply at $1.1762-1.1774 and H4 Quasimodo resistance at $1.1771.

There’s not really much to discuss on the weekly scale for the time being until we connect with prime support at $1.1473-1.1583. Nevertheless, it’s important to remember the noted zone brings additional technical confluence to the table through a 100% Fib projection at $1.1613 and 1.27% Fib extension at $1.1550. In addition, we see trend on the weekly chart has largely been bullish since the early 2020.

In terms of the daily timeframe, light remains on Quasimodo support at $1.1689. Albeit sponsoring a late August bid (black arrow), action from $1.1689 failed to find approval north of late July tops at $1.1909; therefore, this ranks $1.1689 as perhaps frail support. Assuming bearish leadership on the daily, the $1.1612 and $1.1602 (September/November 2020) lows signify downside support targets, followed by 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).

Observed Technical Levels:

H4 resistance at $1.1742 (and the H1 Fibonacci cluster around $1.1756) relinquishing its spot on the chart unlocks the trapdoor for prime resistance at $1.1767-1.1776 on the H1, an area likely accepted by sellers. 

Alternatively, as underlined in Wednesday’s technical briefing, $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.  

 

AUD/USD:

(Italics: previous analysis)

The weekly timeframe has the currency pair touching gloves with prime support at $0.6968-0.7242. Since printing a two-week recovery in late August, the pair 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.

Interestingly, the daily timeframe’s technical landscape informs traders bids are perhaps thin within weekly prime support, at least until price shakes hands with Fibonacci support at $0.7057-0.7126. Those who follow the relative strength index (RSI) will acknowledge the value journeyed through the 50.00 centreline last week and recently dipped a toe below 40.00. This highlights a bearish atmosphere until making contact with oversold territory. 

Following Fed movement amid US trading Wednesday, AUD/USD took hold of H4 resistance at $0.7281 and chalked up healthy bearish interest. The $0.7200-0.7218 H4 decision point is now within touching distance.

From the H1 timeframe, alongside the aforementioned H4 resistance, Quasimodo support-turned resistance made a show at $0.7288 (sharing space with a 61.8% Fibonacci retracement at $0.7283 and a 100% Fibonacci projection at $0.7286) after the unit whipsawed through trendline resistance, taken from the high $0.7469.

Observed Technical Levels (Unchanged Perspective):

According to chart studies on the higher timeframes right now, sellers are in the driving seat, and unlikely to give way until daily Fibonacci support at $0.7057-0.7126.

This echoes a bearish vibe and consequently places a question mark on the H4 decision point at $0.7200-0.7218 and, by extension, the H1 timeframe’s support at $0.7221 and $0.72. 

Bearish themes sub $0.7221 and $0.72?