Potential whipsaw through 1.10 today, traders...
EUR/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
March, evident from the monthly chart, left behind a long-legged doji indecision candle, with its extremes crossing paths with heavyweight supply at 1.1857/1.1352 (intersects with a long-term trendline resistance [1.6038]) and demand at 1.0488/1.0912.
April, as you can see, spent the best part of the month feasting on the top edge of 1.0488/1.0912, squeezing out a Japanese hammer candlestick pattern, typically viewed as a bullish reversal signal.
May is seen recovering off worst levels, on track to perhaps form another Japanese hammer candlestick pattern out of current demand.
With reference to the primary trend, price has exhibited clear lower peaks and troughs since 2008.
Daily timeframe:
Partially altered from previous analysis -
Pattern traders will note a large potential bearish pennant pattern between 1.1147/1.0635, forming since late March.
Aside from Tuesday’s decisive retreat off 1.0976, the euro has outperformed against its US counterpart this week. Wednesday rose to highs of 1.0999, breaching the upper border of the current pennant formation and shining light on the 200-day simple moving average (SMA), currently circling 1.1014.
H4 timeframe:
Dipping from Tuesday’s peak of 1.0976, technical action bottomed out of demand at 1.0925/1.0897 (prior supply), leading to a decisive recovery that pinned supply at 1.1057/1.1013 in sight. This is an area that’s capped upside since late March.
H1 timeframe:
Mid-way through London Wednesday, GBP/USD bulls voyaged northbound, forming fresh demand at 1.0955/1.0946 and toppling supply (prior demand) at 1.0971/1.0990. This led to tops formed just ahead of the widely watched 1.10 level, closely joined by a 127.2% Fib ext. level at 1.0995.
Above 1.10, skies are reasonably clear until reaching 1.1050; that is, of course, if we’re able to overthrow the 200-day simple moving average at 1.1014. Indicator-focused traders may also wish to note the RSI oscillator recently produced bearish divergence out of overbought territory.
Structures of Interest:
Although we’re seeing mild intraday weakness a few pips under 1.10 on the H1 timeframe, buyers may still have a hand in this fight until reaching the 1.1015 region. 1.1015 essentially represents the underside of H4 supply at 1.1013 and the 200-day simple moving average at 1.1014.
Therefore, technical studies indicate we may see a run of buy-stops above 1.10 today to bring in 1.1015 before sellers make their debut.
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
March, evident from the monthly chart, left behind a long-legged doji indecision candle, with its extremes crossing paths with heavyweight supply at 1.1857/1.1352 (intersects with a long-term trendline resistance [1.6038]) and demand at 1.0488/1.0912.
April, as you can see, spent the best part of the month feasting on the top edge of 1.0488/1.0912, squeezing out a Japanese hammer candlestick pattern, typically viewed as a bullish reversal signal.
May is seen recovering off worst levels, on track to perhaps form another Japanese hammer candlestick pattern out of current demand.
With reference to the primary trend, price has exhibited clear lower peaks and troughs since 2008.
Daily timeframe:
Partially altered from previous analysis -
Pattern traders will note a large potential bearish pennant pattern between 1.1147/1.0635, forming since late March.
Aside from Tuesday’s decisive retreat off 1.0976, the euro has outperformed against its US counterpart this week. Wednesday rose to highs of 1.0999, breaching the upper border of the current pennant formation and shining light on the 200-day simple moving average (SMA), currently circling 1.1014.
H4 timeframe:
Dipping from Tuesday’s peak of 1.0976, technical action bottomed out of demand at 1.0925/1.0897 (prior supply), leading to a decisive recovery that pinned supply at 1.1057/1.1013 in sight. This is an area that’s capped upside since late March.
H1 timeframe:
Mid-way through London Wednesday, GBP/USD bulls voyaged northbound, forming fresh demand at 1.0955/1.0946 and toppling supply (prior demand) at 1.0971/1.0990. This led to tops formed just ahead of the widely watched 1.10 level, closely joined by a 127.2% Fib ext. level at 1.0995.
Above 1.10, skies are reasonably clear until reaching 1.1050; that is, of course, if we’re able to overthrow the 200-day simple moving average at 1.1014. Indicator-focused traders may also wish to note the RSI oscillator recently produced bearish divergence out of overbought territory.
Structures of Interest:
Although we’re seeing mild intraday weakness a few pips under 1.10 on the H1 timeframe, buyers may still have a hand in this fight until reaching the 1.1015 region. 1.1015 essentially represents the underside of H4 supply at 1.1013 and the 200-day simple moving average at 1.1014.
Therefore, technical studies indicate we may see a run of buy-stops above 1.10 today to bring in 1.1015 before sellers make their debut.
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