Monday 30th March: Weekly technical outlook and review

EUR/USD:

Weekly timeframe perspective: Following the strong rebound seen two weeks ago from the weekly demand area at 1.0333-1.0502, the buyers attempted to take the Euro higher last week, which, as a result, saw price break above last week’s high at 1.1036. Clearly though, this was not enough to attract further buying, as selling interest came into the market 40 or so pips below the major weekly swap (resistance) level seen at 1.1096, consequently forcing price to close at 1.0884.

Daily timeframe perspective: From this angle, however, things look far more positive than they do on the weekly chart. Friday’s sessions saw the Euro retest a daily swap level coming in at 1.0825, which, if you look a little to the left, you’ll notice was strongly broken north at the beginning of last week. Providing that the buyers can register some meaning here this week, we feel there’s a good chance that price will likely attack the aforementioned major weekly swap (resistance) level. It will be interesting to see what the 4hr timeframe makes of this…

4hr timeframe perspective: For those who read our last report on the Euro, you may recall us mentioning that we set a pending buy order (1.0834) just above a 4hr demand area at 1.0766-1.0826 (located just below the aforementioned daily swap level), which has now been filled. We took partial profits at the 1.0900 psychological number, but have yet to move our stop to breakeven. The reason for why is simply because we feel, judging by the recent bearish bar formed at 1.0900, the market will very likely retest (albeit deeper this time) our 4hr demand area sometime today…

Taking all of the above into account, and considering that price has yet to hit the weekly swap (resistance) level at 1.1096, we see the following taking place this week. The move above 1.0900 has very likely consumed most of the sellers in this region, and potentially cleared the path north up to a rather weak-looking 4hr sell zone coming in at 1.1050-1.1011, which, as we’re sure you can already see, is located just below the aforementioned weekly swap (resistance) level. Therefore, should the market drop today, and active buyers come in around the near-term 4hr demand area, we may consider adding to our current live position (with lower timeframe confirmation), and attempt to ride this train all the way up to the weekly swap (resistance) level.

It will be interesting to see what today brings…

Current buy/sell orders:

• Buy orders: 1.0834 [Live] (Predicative stop-loss orders seen at: 1.0759) 1.0766-1.0826 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 1.0759).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

GBP/USD:

Weekly timeframe perspective: Last week’s trading action shows price spent much of its time lingering below a recently broken weekly Quasimodo support (now resistance) level at 1.5007. On the condition that the sellers can hold out below this level, further downside from here could see price eventually drop as far as the major weekly demand area coming in at 1.4225-1.4482.

Daily timeframe perspective: The daily timeframe shows that sterling made very little progress last week. The market was seen oscillating between the aforementioned weekly Quasimodo resistance level, and a daily demand area coming in at 1.4643-1.4823.

4hr timeframe perspective: The latest coming in from the 4hr chart reveals that the GBP/USD rallied beautifully from 1.4800 up to 1.4900 on Friday, where at which point, potential long covering was seen taking place into the weekly close 1.4869.

Given that price is currently trading below a weekly Quasimodo resistance level at the moment, and somewhat supportive pressure is being seen from a daily demand area (see above), our team remain hesitant trading this pair.

Shorting the market at its current location is not something we’d label high probability, seeing as we have a cluster of supports (all located within the aforementioned daily demand area) looming below at: 1.4800/ 1.4721-1.4767/ 1.4698.

On the flip side, buying the GBP will only be considered if price manages to close above 1.4900 (look to play the retest here then), or reaches the 1.4800 level. That said, we would highly recommend only trading these levels with nice-looking lower timeframe confirmation, since let’s not forget that price is trading below weekly resistance!

Current buy/sell orders:

• Buy orders: 1.4800 [Tentative – confirmation required] (Predicative stop-loss orders are seen at: dependent on where one confirms this level).
• Sell orders: Flat (Predicative stop-loss orders are seen at: N/A).

AUD/USD:

Weekly timeframe perspective: For the past two months, the buyers and sellers have been seen pulling for position around the upper limit of a long-term weekly demand area seen at 0.7449-0.7678. Considering that the Aussie is still in an overall downtrend at the moment, we’re not holding out much hope for this demand zone.

Daily timeframe perspective: Other than Monday’s daily session, we can see that the rest of the week was bearish. For the second time running, price has been held lower by a rather insignificant-looking daily supply area coming in at 0.8024-0.7883. This does not exactly echo a great deal of confidence in longs right now.

4hr timeframe perspective: Given that the weekly timeframe is not really showing much in the way of bullish strength at the moment, and the daily chart is showing that shorts are entering the market once again, where does this leave us on the 4hr timeframe?

Well, price is presently hovering above a 4hr swap level seen at 0.7738, which, if you look to the left, you’ll notice has quite a respectable history. That being the case, a bounce will likely be seen from here, thus giving us the chance to potentially scalp a few pips out of the market around the open. The reason we’re only playing for a bounce here is simply because we see no higher-timeframe barriers supporting this 4hr level

A break below 0.7738 would likely do two things:

• Provide us with a potential short trade on any retest seen at 0.7738.
• Open the doors to further downside towards a very fresh 4hr decision-point demand area at 0.7661-0.7695 (located around the upper base of the aforementioned weekly demand area).

Current buy/sell orders:

• Buy orders: 0.7738 [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

USD/JPY:

Weekly timeframe perspective: Last week shows that price was driven deep into a minor weekly decision-point demand area coming in at 118.22-119.40. If the buyers manage to maintain their position within this zone this week, we may see price attack the weekly Quasimodo resistance level at 122.18.

Daily timeframe perspective: From the daily picture, we can see that supportive pressure came into the market on Thursday from a minor daily support level at 118.32 (located deep within the aforementioned weekly decision-point demand area).

4hr timeframe perspective: Friday’s trading action shows that the market spent much of its time trading, or should we say ‘consolidating’, between the lower limits of a 4hr decision-point supply area at 119.64-119.38, and the 119.00 handle.

Judging by the reaction seen at the 4hr decision-point supply area, and considering that price is trading from both weekly and daily timeframe support (see above) at the moment; there is a good chance that this area could be taken out this week. This move would likely open the doors to intraday buying opportunities up to 120.00. Should price manage to get above this handle, however, we’ll be heavy buyers from that point on up to 120.60/121.00.

Conversely, should price close below and retest 119.00 as resistance, this would be our cue so to speak to begin watching the lower timeframes for selling confirmation. However, caution is advised here, shorting this level with or without lower timeframe confirmation would automatically put you up against weekly buyers (see above). So trade carefully here.

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/CAD:

Weekly timeframe perspective: From this angle, the USD/CAD pair has seen very little change over the past two months. Price still remains trading/consolidating around the underside of a weekly Quasimodo resistance level coming in at 1.2765. Assuming that the sellers begin showing strength here this week, we might, just might, see price attack the weekly swap (support) level at 1.2260.

Daily timeframe perspective: Friday’s action saw strong buyers enter the market from within a daily demand area at 1.2405-1.2517. This area, as far as we can see, is the (technical) reason why price is unable to trade lower on the weekly timeframe. It will be interesting to see what the 4hr timeframe makes of this…

4hr timeframe perspective: The recent ascent on this pair forced price to close the week just above the 1.2600 handle at 1.2611. Assuming that the buyers can hold out above 1.2600 today, our team will be looking for confirmed longs on any retest seen at this number, as the path is now likely clear for further upside to at least the 4hr supply area at 1.2721-1.2673.

In the event that price closes below 1.2600, however, two areas of strong 4hr demand jump out at us. The first, the higher of the two, comes in at 1.2562-1.2582 (tentative buy orders seen just above at 1.2585). This is where we believe the decision was made by pro money to initially push above 1.2600; therefore, it remains significant in our opinion. The second area, seen a little lower down on the scale, at 1.2473-1.2517 (tentative buy orders seen just above at 1.2519) is far more prominent and will likely be a zone watched by many.

As a closing point, if price does manage to hold above 1.2600, things will not be looking too good for the aforementioned weekly Quasimodo resistance level, as the only thing that we see standing in the way of price retesting this weekly level, is a 4hr supply area coming in at 1.2721-1.2673, and a minor 4hr swap level seen at 1.2743. It will be interesting to see how this pans out.

Current buy/sell orders:

• Buy orders: 1.2600 [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level) 1.2585 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 1.2557) 1.2519 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 1.2469).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

USD/CHF:

Weekly timeframe perspective: Last week saw the Swiss pair close below a weekly swap (support) level at 0.9663. This has, in all likelihood, cleared the runway south for price to challenge the strong-looking weekly decision-point demand area coming in at 0.9170-0.9343.

Daily timeframe perspective: For the best part of last week, we saw price consolidating between a very clean-looking daily decision-point demand area at 0.9449-0.9534, and the recently broken weekly swap (now resistance) level mentioned above at 0.9663.

4hr timeframe perspective: The 4hr timeframe shows that price reacted just fantastically to the fresh 4hr supply area coming in at 0.9693-0.9666, which, as you can probably see, drove price down to around the 0.9600 region, consequently forcing price to close the week at 0.9606. We do hope some of our readers took part in this move, as this was a highlighted area to watch on Friday.

Given that we’ve seen price close below a weekly swap (support) level, and, at the same time, attack a daily decision-point demand area (see above), we believe there to be very little higher-timeframe direction at the moment . Does this mean we cannot trade this pair intraday – no sir!

Intraday buying levels to watch for today come in as follows:

• The 4hr Quasimodo support level at 0.9535. One could look to trade any bounce seen from here up to 0.9600.
• The 4hr demand area at 0.9449-0.9500 (located deep within the aforementioned daily demand area). This zone has already been tested, so caution is advised here…

Intraday selling levels:

• One could try to short the round-number region 0.9600 around the open down to the aforementioned 4hr Quasimodo support level.
• The 4hr supply area already mentioned above at 0.9693-0.9666. This area has already seen a very deep test, so in looking to short this zone today, one should be prepared for the possibility of a fake above to 0.9700.

All the levels mentioned above are places where price MAY bounce, there is nothing to say that it will. Therefore, let’s all play on the side of caution here and wait for the lower timeframes to shows some strength around these areas before committing our hard-earned cash here.

Current buy/sell orders:

• Buy orders: 0.9535 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 0.9486) 0.9449-0.9500 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 0.9441).
• Sell orders: 0.9600 [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level) 0.9693-0.9666 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 0.9705).

DOW 30:

Weekly timeframe perspective: From the weekly timeframe, we can see that even though the overall up trend remains very strong, selling pressure was seen from a minor weekly resistance level at 18098 last week. Are the sellers strong enough here to continue pushing price south this week, let’s take a look at the lower timeframes to see what we can find.

Daily timeframe perspective: Monday through to Wednesday were clearly ‘bear days’, but once price reached, or should we say ‘faked below’ the daily decision-point demand area at 17561-17655 (converges beautifully with a trendline extended from the low 15849), buyers began entering the market.

4hr timeframe perspective: Following Thursday’s rally up to the 4hr swap area at 17690-17774, Friday’s sessions saw little to no follow-through action. Therefore much of our previous analysis still holds weight here…

Given that the weekly timeframe is seeing resistive pressure at the moment, and with the daily chart currently showing price trading from daily demand (see above), our main focus for today will be WATCHING the aforementioned 4hr swap area. If this area is consumed, the path north will then likely be clear for further buying up to at least 17871, and potentially the 4hr decision-point supply area at 18045-17981 given enough time. In addition to this, a break higher will also likely confirm buying strength from the aforementioned daily decision-point demand area.

Conversely, should selling be seen around this 4hr swap area today, we may see price attack, and possibly break the small ‘kink’ 4hr demand area, which, as we’re sure you can guess by now, would likely indicate selling strength from the aforementioned minor weekly resistance level.

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).

XAU/USD (Gold):

Weekly timeframe perspective: The situation on the weekly chart shows that price was driven deep into a small weekly decision-point supply area coming in at 1223.1-1202.6 last week. Active selling was clearly present here, consequently forcing the market to close at 1198.0.

Daily timeframe perspective: The daily timeframe shows that price reacted beautifully from a minor Quasimodo resistance level at 1219.9 on Thursday, which, as you can probably see, attracted further selling on Friday. This level is surrounded by a daily supply area seen at 1223.1-1213.0, but is also located deep within the aforementioned weekly decision-point supply area. If further selling is seen this week, we see very little support in the market until price reaches 1182.0, a major daily swap (support) level.

4hr timeframe perspective: From the 4hr timeframe, we can see that in order for price to reach the daily swap (support) level at 1182.0, the sellers will need to take out a 4hr demand area coming in at 1186.5-1191.9.

With the overall trend pointing south on Gold, and the fact that price is currently trading from higher-timeframe supply (see above), buying from this 4hr demand area is something we have no interest in taking part in. In the event that this area is consumed this week, however, the spotlight will then be focused on the aforementioned daily swap (support) level. Entering long from here is valid in our opinion, as long as one waits for confirmation from the lower timeframes, since (at that point); we should not forget where price came from – weekly supply! (See above).

Current buy/sell orders:

• Buy orders: 1182.00 [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level).
• Sell orders: Flat [Tentative – confirmation required] (Predicative stop-loss orders seen at: N/A).

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