Technical studies could see 1.10 brought into view above 1.0950

12 апр. 2020 г.

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 demand-turned supply at 1.1857/1.1352 and demand at 1.0488/1.0912.

The technical foundation has April rangebound between the two aforementioned price structures; notably, however, the current monthly candle is nearly 1% lower, testing the upper boundary of 1.0488/1.0912.

The primary downtrend has remained in motion since 2008, exhibiting clear lower peaks and troughs.

Daily timeframe:

Partially altered from previous analysis -

Buoyed on the back of a 78.6%/61.8% Fib zone at 1.0745/1.0830 (pink), EUR/USD experienced a surge in demand over the course of the week, adding more than 100 points, or 1.20%.

Northbound, the 200-day simple moving average (SMA) at 1.1060 offers a layer of resistance. Supply at 1.1239/1.1179 also remains a prominent fixture on this timeframe, sited just north of a 61.8% Fib level at 1.1171 and intersecting with trendline resistance (1.0879).

In addition to this, traders may find interest in supply coming in from 1.1323/1.1268, having seen a potential AB=CD correction point terminate at 1.1276 (orange).

H4 timeframe:

Partially altered from previous analysis -

Thursday’s advance ahead of support at 1.0831 came about as the US dollar index folded over and reclaimed 100.00 to the downside, with EUR/USD eclipsing Tuesday’s high at 1.0925.

As you’d expect, Friday put up little in terms of market movement as the majority of banks shut their doors in observance of Good Friday. Price action remains hovering a touch beneath supply at 1.1044/1.0966, accompanied with a nearby 50% retracement at 1.0954 and a 127.2% Fib ext. level at 1.0973.

H1 timeframe:

Intraday flow on the H1 timeframe spent Friday clutching the underside of 1.0950. Understandably, the reaction was reasonably modest in light of holiday-thinned trade.

Moves above 1.0950 this week faces a somewhat large supply at 1.1033/1.0982 that houses the widely watched 1.10 level and a channel resistance (1.0925).

Technicians will also note the RSI momentum indicator recently faded overbought territory and challenged its 50.00 value.

Structures of Interest:

Longer term:

Monthly price rebounding from demand at 1.0488/1.0912, together with buyers latching onto a reasonably strong bid from 1.0745/1.0830 on the daily timeframe, potentially sets the stage for further upside this week. The 200-day SMA rests as an initial upside target on the bigger picture.

Shorter-term:

Having noted higher-timeframe flow echoing a bullish vibe, 1.0950 on the H1 timeframe is perhaps vulnerable. The most traders likely expect off here is a retest at 1.09/channel support (1.0768). However, breakout buyers above 1.0950 not only face H1 supply at 1.1033/1.0982, but also the 50% retracement value at 1.0954 and a 127.2% Fib ext. level at 1.0973 on the H4 timeframe, which envelope the lower boundary of the H4 supply base at 1.1044.

Ultimately, technical studies could see 1.10 brought into view on a breakout above 1.0950. Although a pullback from here is likely, higher-timeframe direction seeks more northerly ground (the 200-day SMA).