Tuesday 21st April: Daily technical outlook and review.

EUR/USD:

Weekly timeframe perspective: The technical studies from the weekly scale show that buying interest came in from just above weekly demand at 1.0333-1.0502 last week, which, if you scale out far enough, you’ll be able to see that this area also boasts long-term trendline convergence from the low 0.8230 (year 2000). However, with the weekly trend still firmly trending south, we feel that there’s a good chance this area will eventually be taken out.

Daily timeframe perspective: From this angle, we can see that price is currently retesting a recently broken daily swap level as support at 1.0716. In the event that the buyers can hold out above here, further upside could see prices challenge the daily resistive structure at 1.1051-1.0967. That being said though, the daily trend is also down, so buying at this support could prove challenging.

4hr timeframe perspective: The open 1.0816 saw the Euro sell off yesterday from round-number resistance at 1.0800, consequently taking out not only the mid-level number 1.0750 but also Friday’s low seen at 1.0733 as well.

Intraday support at 1.0723 is presently holding the market higher. However, once Europe opens for business, we believe this level will be consumed and the 1.0700 handle seen just below will likely see some action. This psychological number is a key level for us today. In the event that supportive pressure is seen here, we’ll be looking for confirmed longs up to at least 1.0750, and potentially 1.0800 given enough time. The reason we NEED to see confirmation is simply because the overall trend on the higher-timeframe picture is against us (see above).

A significant break below 1.0700 on the other hand would, in effect, be our cue to begin watching for prices to retest this number as resistance. Granted, by selling here we would at that point effectively be selling here with the trend, but you’d also be selling into higher-timeframe demand (see above), so trade carefully today guys!

Current buy/sell orders:

• Buy orders: 1.0700 [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).

GBP/USD:

Weekly timeframe perspective: Even though last week was clearly a great week for the bulls, prices did not manage to close above the weekly Quasimodo swap level at 1.5007. This – coupled with the fact that the GBP is in an extremely aggressive downtrend at the moment does not exactly inspire confidence to begin buying!

Daily timeframe perspective: From the daily scale, we can see that there is clearly interest being shown from shorts around the aforementioned weekly Quasimodo swap level. And in addition to this, we see very little supportive structure stopping a sell off until price hits the daily demand area at 1.4503-1.4712, which, as you can see, has proven a tough nut to crack over the past month or so.

4hr timeframe perspective: The open 1.4956 saw Cable hesitate for a few hours, and then aggressively sell off. This consequently forced price to take out Friday’s low 1.4915 and slam dunk itself into round-number support at 1.4900.

Considering that the market is currently trading around higher-timeframe resistance (see above), we’re not even going to consider buying from 1.4900. That being the case, the main focus for today will be watching to see if price can close below this number and successfully retest it as resistance. Shorting (with lower timeframe confirmation) the retest would likely give you a clear forty or so pips profit down to the first-take profit area – 4hr demand coming in at 1.4811-1.4854. Ultimately though, we’re looking to take advantage of the fact the price is trading from weekly resistance, and trail this pair down to at least the top-side of the daily demand area mentioned above at 1.4503-1.4712.

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: Considering that the Aussie has been in a sharp downtrend since the 30/06/2014, the buyers have been able to defend the weekly demand at 0.7449-0.7678 since February. On top of that, this weekly zone also boasts additional support from a long-term trendline right the way back to early 2001 (0.4775).

Daily timeframe perspective: The battle going on around the weekly demand area mentioned above shows a daily scale consolidation zone forming between a daily decision-point supply at 0.8024-0.7883 and a daily demand area seen at 0.7449-0.7598 (located deep within weekly demand at 0.7449-0.7598).

4hr timeframe perspective: The Aussie started the week positively with prices gapping north towards 4hr supply coming in at 0.7841-0.7812. As you can see though, this was clearly not enough to attract buyers into the market thus an aggressive sell off of over 100 plus pips took place. At the time of writing, this move appears to have just taken out the 0.7700 psychological number and slammed into a 4hr swap area visible at 0.7695-0.7671.

Assuming that this 4hr area holds today, and takes out both the 0.7700 number and also the local swing high seen marked with a green arrow at 0.7727, we’ll then consider looking to enter long on this pair. However, as things stand, buying this market will automatically put us against the steep downtrend currently in motion (see weekly analysis above), so closely monitoring of any long positions is strongly advised here.

That being said, should price close below this 4hr zone, our attention will then shift to look for intraday shorting opportunities down to 0.7647, and potentially the 0.7600 number given enough time. Selling here, however, would effectively place us trading in line with the overall trend but at the same time against weekly buyers (see above). Therefore, once again, monitoring positions closely here is recommended.

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).

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