Friday 10th April: Daily technical outlook and review

EUR/USD:

Weekly timeframe perspective: The weekly timeframe shows that active selling is being seen from just below a major weekly swap level coming in at 1.1096. This, coupled with the fact the Euro is in a stonking great downtrend at the moment does not look good for anyone currently long this market.

Daily timeframe perspective: A decision has clearly been made on the daily picture. The sellers strongly closed prices below a daily swap level visible at 1.0716 yesterday, which in turn has likely opened the gates for prices to challenge the daily demand area seen at 1.0461-1.0565 (reaction to the weekly demand area mentioned above).

4hr timeframe perspective: The recent descent on the Euro took out not only a small 4hr demand area at 1.0749-1.0772, but also the round number 1.0700 as well. The assault ended with prices colliding with another 4hr demand area at 1.0612-1.0658, which actually forms the first layer so to speak of a 4hr stacked demand formation.

Considering where the market is trading on the higher timeframes (see above) at present, it’s very hard for our team to be bullish. The 4hr stacked demand formation seen on the chart between the limits of 1.0550 and 1.0658 will in our opinion not see much of a reaction until price reaches the extreme 4hr demand at 1.0550-1.0573, since this zone is located within the aforementioned daily demand area.

With regards to selling, our team has come to a general consensus that it may be best to wait to see if prices can close below the aforementioned stacked demand formation before considering shorts, as this move would likely open the possibility for shorts down to at least until the 4hr demand area at 1.0461-1.0510 (located deep within the aforementioned daily demand area).

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

GBP/USD:

Weekly timeframe perspective: The weekly timeframe shows that not only is the GBP in a freakishly steep downtrend at the moment, but price is also seen selling off from just below a recently broken weekly Quasimodo support (now resistance) line coming in at 1.5007. Therefore, for anyone considering buying this pair medium/long-term may want to consider the above before doing so.

Daily timeframe perspective: From a technical standpoint, we have barely seen any change on this timeframe for quite some time now. The key thing (in our opinion) to take away from this chart is that further selling will/can only take place on the weekly timeframe once the daily demand zone at 1.4643-1.4823 is taken out.

4hr timeframe perspective: The GBP/USD pair fell during the course of yesterday’s sessions, completely wiping out both the 1.4800 level, and the 4hr demand area seen at 1.4721-1.4767. This consequently resulted in price testing the 4hr Quasimodo support level seen just below this demand at 1.4698.

From where we’re standing, buying from this 4hr Quasimodo is not something we’d stamp high probability. Granted, by entering long here you are effectively also buying on the round number 1.4700, which, as you can probably see, is neatly tucked deep within a daily demand area – fantastic! Now switch over to the weekly scale, not so fantastic – strong downtrend, resistive pressure being seen from a weekly Quasimodo resistance level (see above), and this is before we even consider the resistance that may form from the recently broken 4hr demand area just above it at 1.4721-1.4767! With this in mind, there will be no buying seen from our desks today.

With regards to selling, our team has come to a general consensus that shorts will only be permitted when/if price consumes the aforementioned daily demand area. That way, we can be pretty confident the down trend on this pair is likely to resume.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

AUD/USD:

Weekly timeframe perspective: Over the past two months or so, the buyers and sellers have been seen pulling for position within a weekly demand area at 0.7449-0.7678, which, as you can see, also boasts long-term trendline convergence from the low 0.4775. We’re not usually one to make predictions here, but with the lower low that formed last week deep within the aforementioned weekly demand at 0.7532, coupled with the fact that the Aussie is in a severe downtrend at the moment, it looks as though this area will be taken out sooner or later.

Daily timeframe perspective: From this angle, we can see active buying recently took place from a daily demand area at 0.7449-0.7598 (located deep within weekly demand at 0.7449-0.7678). Assuming that this bullish tempo continues today, potential resistances to keep an eye on are the downtrend line extended from the high 0.8294, and the daily supply area seen above it at 0.8024-0.7883.

4hr timeframe perspective: The 4hr timeframe shows a further push north was seen in yesterday’s sessions, consequently forming a higher high at 0.7737. As far as we can see, the route north still appears free up to at least 0.7762, thus most of our previous analysis remains valid.

To take advantage of this potential up move, we’re looking to buy from the fresh 4hr demand area sitting below at 0.7626-0.7649 as per the green arrows. We know prices will have to take out the recent lower low at 0.7658 to get there, but can you imagine the colossal amount of sell stops sitting just below this level – exactly what well-funded traders need to move the market north. With everything taken into consideration, and remembering the fact that price is trading around both weekly and daily demand zones (see above), our team has deemed this a place fit for a pending buy order (0.7652, with a stop set just below at 0.7622).

Current buy/sell orders:

• Buy orders: 0.7652 (Predicative stop-loss orders seen at: 0.7622).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

USD/JPY:

Weekly timeframe perspective: Along with the overall trend still firmly pointing north, buying pressure is being seen from deep within a small weekly decision-point demand area at 118.22-119.40. In the event that the buyers can continue with this tempo, it’s likely we’ll eventually see prices challenge the weekly Quasimodo resistance level seen at 122.18.

Daily timeframe perspective: The daily timeframe shows price is currently trading within a minor daily supply area seen at 121.18-120.08. A convincing push above this barrier could very well be the catalyst needed for a move up to the aforementioned weekly Quasimodo resistance level.

4hr timeframe perspective: Yesterday’s sessions saw price action spike south to 4hr demand at 119.63-119.86, which, as you can see, forced prices to rally up to a minor 4hr swap level coming in at 120.60.

The spike seen above 120.60 has likely flushed most of the traders out who attempted to fade this 4hr swap level, thus clearing the road north for further buying up to 4hr supply at 121.18-120.92. Therefore, we now have potential direction north. That being the case, the next thing we’re going to naturally think to look for is where to buy, right? The area we have our eye on at the moment is the 4hr demand area seen below at 119.84-120.05, which also boasts additional support from the round number 120.00. As long as price does not hit the aforementioned 4hr supply before touching base with this 4hr demand area, we’re still in good shape. So, we now have both direction and a place to buy from. At this point, you may also be thinking why are they buying into daily supply at 121.18-120.08? Good question! Granted, we may be buying into daily supply, but we’re also buying WITH the weekly trend and from a weekly decision-point demand area (for levels see above), since in our experience the higher timeframes usually take precedence.

With all of the above taken into consideration, our team have placed a pending buy order just above the aforementioned 4hr demand area at 120.07, with a stop placed just below at 119.79.

Current buy/sell orders:

• Buy orders: 120.07 (Predicative stop-loss orders are seen at: 119.79).
• Sell orders: Flat (Predicative stop-loss orders are seen at: N/A).

USD/CAD:

Weekly timeframe perspective: Although the view from the weekly timeframe shows price in a firm uptrend at the moment, the last two months or so has seen price struggling to get above the weekly Quasimodo resistance level coming in at 1.2765. Let’s take a look at the lower-timeframe structure to see what we can find…

Daily timeframe perspective: From the daily picture, we can see that this pair is clearly beginning to chisel out a consolidation zone between the daily demand area at 1.2350-1.2468, and a daily supply area seen at 1.2833-1.2742 (encapsulates the aforementioned weekly Quasimodo resistance level). The current location of price is around the lower limit of this range, so any traders looking to sell medium/long term may want to make a note of this.

4hr timeframe perspective: Yesterday’s trading action saw the USD/CAD pair rally, which consequently saw price take out the 4hr supply area at 1.2572-1.2553, and eventually drive towards the 1.2600 handle. A close above this number today would, in effect, be our cue to begin watching for price to retest this barrier as support, since looking above, we see very little resistance until price reaches 1.2692, a minor 4hr Quasimodo resistance level. Conversely, should the sellers be able to hold the market below this round number, we’ll then start looking at how the lower timeframe price action is behaving, and may consider shorting.

Before trading do consider the following: Selling from 1.2600 potentially puts you up against not only the daily timeframe flow from the daily demand area mentioned above at 1.2350-1.2468, but also the overall trend as well, so please monitor any positions carefully. Buying the retest of 1.2600 on the other hand, would likely see you cross swords with weekly timeframe flow from the aforementioned weekly Quasimodo resistance level, but here we’d be trading WITH the overall trend. The main point to this little story is trade with caution!

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

USD/CHF:

Weekly timeframe perspective: The weekly timeframe shows that price has broken above the weekly swap level seen at 0.9663. However, until this weekly candle closes, it’s very hard to come to any real conclusion, since price could very well sell off today, as it did the week before. Let’s check out the lower timeframe situation.

Daily timeframe perspective: From this angle, we can see that price has closed above a daily supply area at 0.9755-0.9662 (located just above the aforementioned weekly swap [resistance] level). In the event that the buyers can hold the market above this area, it is likely we’re going to see higher prices going into next week.

4hr timeframe perspective: The Swissy pair saw nothing but blue bullish candles during yesterday’s sessions. This saw price break above and retest 0.9700 which clearly provided a spring board for the market to rally up to a fresh 4hr supply area seen at 0.9811-0.9767. This area of supply boasts not only additional round number resistance at 0.9800, but also trendline convergence from the high 1.0110. However, we’ll not be taking any shorts at this zone, until we’re confident that the green base below at 0.9755-0.9732 has been consumed.

In view of the higher-timeframe structure, we know price has broken above both a weekly swap level and also a daily supply area (see above). For us to be convinced that this market is truly heading north, a sustained move above the aforementioned fresh 4hr supply area will need to be seen. Why this area? Take a look back to the daily chart, then zoom down to the 4hr scale, can you see how this area of 4hr supply (positioned a little above the aforementioned daily supply area) is the only thing technically stopping prices from rallying higher. Therefore, a push above here would likely confirm the following:

• The break above the weekly swap level and daily supply area was legit.
• The runway is potentially free for buying up to at least 4hr supply coming in at 0.9870-0.9903.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

DOW Jones 30 (US 30):

Weekly timeframe perspective: From the weekly timeframe, we can see that the DOW is in an incredibly strong uptrend at the moment, and has been for the past six years! That being said though, price recently collided with a resistance barrier coming in around the 18098 region, which is currently holding the market lower. It will be interesting to see what the lower timeframes make of this…

Daily timeframe perspective: Overall, price action on the daily timeframe is still being supported by a small, yet clearly resilient daily decision-point demand area at 17561-17655 (trendline convergence can be seen from the low 15849). Considering the overall size of this daily area, we have seen this barrier defended not once, not twice, but THREE times now. Should this area eventually give way, however, it’s likely we’ll see a decline in value back down to the daily demand area positioned at 17032-17186.

4hr timeframe perspective: Buying and selling has been capped between 4hr demand at 17817-17873, and 4hr supply coming in from above at 18009-17939 since the beginning of the week.

A break above the current 4hr range would likely open the gates to intraday buying up to the 18098 weekly level, which we would take part in as long price retested this zone and lower timeframe confirmation presented itself. For us to be confident that the overall trend is continuing, however, we’d need to see a sustained move above this weekly level on the 4hr timeframe before seriously committing to longs.

Conversely, a push below this range would see price almost immediately test a potential barrier of support seen below marked in green at 17811-17778. Buying within this green zone may be a possibility; however we would highly recommend waiting for the lower timeframes to show bullish strength has entered the market before committing your hard-earned capital.

Current buy/sell orders:

• Buy orders: 17811-17778 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 17769).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).​

XAU/USD (Gold):

Weekly timeframe perspective: From the weekly timeframe, we can see that the overall trend is firmly pointing south. In spite of this, price recently pierced above a small weekly decision-point supply area at 1223.1-1202.6, which has very likely flushed out stops and cleared the path north for further upside towards a weekly swap level coming in at 1251.0.

Daily timeframe perspective: The recent move on the weekly timeframe also broke above a daily supply area at 1223.1-1213.0 (located deep within the aforementioned weekly decision-point supply area). This push higher, as per the daily timeframe, has potentially cleared the runway north up to daily supply at 1236.6-1227.7, which is, as far as we can see, now effectively a key obstacle to a move towards the aforementioned weekly decision-point supply area. In addition to this, we can also see that should active buyers come into the market, they will likely do so much lower down, around the major daily swap level region 1182.00 since between this level and the current location of price this is the only logical buy zone in our opinion.

4hr timeframe perspective: Following the break above the 4hr resistance zone at 1223.1-1219.0 (located deep within the daily supply area mentioned above at 1223.1-1213.0) on Monday, the Gold market sold off. As you can see, this forced prices down to a small 4hr decision-point demand area seen at 1191.3-1194.1, which, at the time of writing seems to be holding.

Although the overall trend on Gold is pointing south at the moment, we have seen (bold points above) three supply areas engulfed with room above for prices to move higher in the short term. This can be seen not only on the weekly timeframe, but the daily and 4hr timeframes as well. So, with a potential resistive-free area on the horizon, we’re going to keep a close eye on the following areas today for lower timeframe buying confirmation:

• The small 4hr decision-point demand area mentioned above at 1191.3-1194.1. First take-profit target from this area will be set around the high 1202.5, further targets will depend on how price action behaves, but ultimately were looking towards 1226.5 as our final take-profit target (seen just below the 1236.6-1227.7 daily supply area).
• The 4hr demand area seen at 1180.7-1187.3. This area has a higher probability of seeing a decent reaction since it encapsulates the aforementioned daily swap level. Initial targets will depend on how price approaches this zone.

A close below the daily swap level would be needed to invalidate our medium-term bullish bias.

Current buy/sell orders:

• Buy orders: 1191.3-1194.1 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 1190.2) 1180.7-1187.3 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 1179.4).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

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