Wednesday 1st April: Daily technical outlook and review.

EUR/USD:

Weekly timeframe perspective: The upward momentum from the weekly demand area at 1.0333-1.0502 seems to be crumbling, as sellers appear to be entering the market from just below a major weekly swap level coming in at 1.1096.

Daily timeframe perspective: Yesterday’s daily session saw the Euro strongly close below a daily swap level at 1.0825. This move has likely cleared the path south for further selling down towards a daily demand area seen at 1.0461-1.0565, which, if you look back to the weekly chart, you’ll notice that this area was in actual fact a reaction to the larger weekly demand area mentioned above.

4hr timeframe perspective: Recent events have forced price to trade just above the psychological number 1.0700. This level, and the nice-looking 4hr demand area seen below it at 1.0612-1.0658 are all that (as far as we can see) stands in the way of price reaching the aforementioned daily demand area.

In view of the higher-timeframe technical structure (see above), the outlook for the Euro is not really a positive one. Therefore, buying from either 1.0700 or the 4hr demand area with anything more than an intraday view may not be the best path to take in our opinion. Our team feels that a move from either level will see prices struggle to trade above the 4hr decision-point supply area seen at 1.0844-1.0809. Reason being is because this was likely where pro money made the decision to break below the aforementioned daily swap level, as such, there may well be unfilled sell orders still remaining. Should price reach this area of 4hr supply today, this would be our signal to begin watching the lower timeframes for selling confirmation to join in on any move south from here.

Current buy/sell orders:

• Buy orders: 1.0700 [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level) 1.0612-1.0658 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 1.0605).
• Sell orders: 1.0844-1.0809 Tentative – confirmation required] (Predicative stop-loss orders seen at: 1.0849).

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 maintain a strong position 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 on the other hand, shows that in order for further selling to be seen on the weekly timeframe, the sellers must take out a daily demand area positioned at 1.4643-1.4823.

4hr timeframe perspective: During the course of yesterday’s sessions, we can see that Cable eventually rallied from the 4hr demand at 1.4721-1.4767 (located within the aforementioned daily demand area). Nonetheless, as you can see, price found a nice bit of selling pressure around an almost invisible 4hr Quasimodo resistance level at 1.4866.

Considering that the higher timeframes are not really giving us much in the way of future direction (see above) at the moment, our team remains hesitant trading this pair medium/long term. That said, we are still keeping an eye out for intraday bounces around the following levels:

Buys:

• 4hr demand at 1.4721-1.4767.
• 4hr Quasimodo support level seen at 1.4698.

Sells:

• Minor 4hr Quasimodo resistance at 1.4866.
• Fresh 4hr supply seen at 1.4919-1.4896.

In trading the above areas, we highly recommend waiting for the lower timeframe structure to confirm buying or selling strength around your chosen zone.

Current buy/sell orders:

• Buy orders: 1.4721-1.4767 [Tentative – confirmation required] (Predicative stop-loss orders are seen at: 1.4714) 1.4698 [Tentative – confirmation required] (Predicative stop-loss orders are seen at: dependent on where one confirms this level).
• Sell orders: 1.4866 [Tentative – confirmation required] (Predicative stop-loss orders are seen at: dependent on where one confirms this level) 1.4919-1.4896 [Tentative – confirmation required] (Predicative stop-loss orders are seen at: 1.4925).

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. If you take a look back to early 2001, you’ll also notice that this weekly area boasts strong trendline support from the low 0.4775.

Daily timeframe perspective: The current view we have of the daily chart shows us that price is once again tackling the topside of a daily demand area seen at 0.7449-0.7598 (located deep within the aforementioned weekly demand area).

4hr timeframe perspective: Yesterday’s sessions saw the Aussie once again decline in value, consequently forcing this market to test the upper limits of a small 4hr Quasimodo support level at 0.7587 (located just within the aforementioned daily demand area), which, as you can probably see, was clearly enough to support a counterattack back up to a newly-formed 4hr decision-point supply area at 0.7663-0.7639.

Given that both the weekly and daily timeframes show price in demand (see above) now, we could potentially see a rally north from here. That said though, with the long-term downtrend still very much in play, and the fact that price is rebounding from the aforementioned 4hr decision-point supply area at the moment, we remain skeptical. Waiting for price to break above this 4hr decision-point supply area seems to be the most conservative route to take. This move would not only tell us that potential strength was entering the market from the higher-timeframe demand areas, but also that the path north is likely clear for buying up to at least the 0.7700 level.

Therefore, with no tradable price action for us on this pair at present, opting to stand on the side lines here may very well be the best path to take.

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/JPY:

Weekly timeframe perspective: At the time of writing, we can clearly see that active buyers have entered the market from within a small weekly decision-point demand area coming in at 118.22-119.40. Assuming that the buyers can continue with this tempo, it is likely we’ll see price attack the weekly Quasimodo resistance level seen at 122.18.

Daily timeframe perspective: Following the recent move north from daily support at 118.32 (located deep within the aforementioned small weekly decision-point demand area), a small daily indecision candle was printed yesterday. Could this be a sign that prices want to reverse? Let’s see what the 4hr timeframe has to say on the matter…

4hr timeframe perspective: From this angle, it’s clear that the buyers were not strong enough to hold out above 120.00. This resulted in the pair slipping below this number and rebounding off of a small 4hr decision-point demand area at 119.64-119.80.

Despite 120.00 failing to hold, we’re still quite confident higher prices are in store for this pair. Our reasoning is as follows:

• Overall higher timeframe trend is north.
• 4hr trend is north. This was confirmed for us when price broke the high 120.24.
• Both weekly and daily timeframes are showing price trading from supportive structures with room to move higher (see above).

With the above in mind, today’s spotlight will be firmly focused on the 4hr Quasimodo resistance line at 120.21. This almost hidden level is what is stopping us from entering long. A break above this beauty, will, in effect, be our cue to begin watching for price to retest this level as support.

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: For the past two months, price has been seen teasing the underside of the weekly Quasimodo resistance level at 1.2765. A break above this number would likely clear the path north for further buying towards another weekly Quasimodo resistance level seen at 1.3014.

Daily timeframe perspective: Recent events show that price has rebounded from daily supply at 1.2833-1.2747 (surrounds the aforementioned weekly Quasimodo resistance level), consequently forming a bearish pin bar candle into yesterday’s daily close.

4hr timeframe perspective: We can see from the 4hr chart that price pinned the aforementioned weekly Quasimodo resistance level, and sold off down to a mid-level number 1.2650. Both the 1.2700 level and a 4hr decision-point demand area at 1.2671-1.2705 were taken out in the process.

Given that the this pair is trading around overall higher-timeframe supply (see above) at the moment – other than the mid-level number mentioned above, we see very little obvious 4hr supportive structure until price reaches 1.2600. Therefore, selling could very well be in store today. Levels we have our eye on are:

• The round number 1.2700.
• The weekly Quasimodo resistance level at 1.2765, which, as you can probably see, also now converges with minor 4hr trendline resistance from 1.2833.

Although price is indeed trading from higher-timeframe supply structures at present, lower timeframe confirmation is still recommended if you’re considering trading at the two levels mentioned above. The reasons for why are simply because not only is the Loonie pair in an incredibly strong uptrend at this time, but the weekly price action also shows very little sign of bearish strength around the aforementioned weekly Quasimodo resistance level, so please do trade with caution guys.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: 1.2700 [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level) 1.2765 [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level).

USD/CHF:

Weekly timeframe perspective: Even though price is now trading a little above the weekly swap level at 0.9663, it’s still way too early to count this potential resistive beast out yet. Let’s see what we can find on the lower timeframes…

Daily timeframe perspective: From this angle, we can see that price has closed above the aforementioned weekly swap level, and is now tackling the underside of daily decision-point supply area seen at 0.9904-0.9771.

4hr timeframe perspective: The USD/CHF pair rallied during the course of yesterday’s sessions and firmly closed above 0.9700, which, as you can see, is currently being retested as support. Below this number, there is also an additional supportive structure in the form of a 4hr swap area seen at 0.9693-0.9666.

With all of the above taken into consideration, we believe that prices will bounce from the 0.9700 region up to a mouth-watering fresh 4hr supply area at 0.9811-0.9767 (located within the aforementioned daily decision-point supply area) sometime today. Our team has no interest in trading the bounce from here unless very attractive lower timeframe price action presents itself, but even then, the take-profit target would be relatively small, since let’s not forget that price is trading around higher-timeframe supply (see above) at the moment. As such, we’re far more interested in the aforementioned 4hr supply area seen just above it. A pending sell order has been set just below this zone at 0.9763 for the following reasons:

1. The 4hr area of supply is EXTREMELY fresh and has great momentum from the base. Take a look at historical structures similar to this; you’ll be surprised at how well they react.
2. Located within a daily decision-point supply area at 0.9904-0.9771.
3. Potential resistive pressure from the weekly swap level at 0.9663.
4. Trendline support-turned resistance extended from the low 0.9170.
5. Round-number resistance seen within the 4hr zone at 0.9800.

Current buy/sell orders:

• Buy orders: 0.9700 [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level).
• Sell orders: 0.9763 (Predicative stop-loss orders seen at: 0.9822).

DOW 30:

Weekly timeframe perspective: The weekly picture shows that even though the DOW is still in a VERY strong uptrend, resistive pressure is currently being seen from a minor weekly resistance level coming in at 18098.

Daily timeframe perspective: Recent events have confirmed (as far as we can see) that the DOW is now range bound between the daily decision-point demand area at 17561-17655, and a small daily supply area coming in at 18279-18192. At present, nonetheless, price is seen trading nearer the lower limits of this range, so traders looking to short today may want to note this down.

4hr timeframe perspective: Yesterday’s sessions saw this market aggressively sell off from a great-looking 4hr supply area at 18045-17981, which, as you can see, has just recently forced price into a 4hr decision-point demand area at 17666-17714 (located just above the aforementioned daily decision-point demand area).

Now, considering that the weekly timeframe, although in an incredibly strong uptrend, is seeing downward pressure from 18098, and the daily timeframe is showing price trading near the lower limits of the current daily range (see above), where does this leave us on the 4hr timeframe? Well, one could look to enter long around the current 4hr decision-point demand area. However, although this area is backed up so to speak by the lower limits of the daily range, we must remember that selling pressure is being seen on the weekly timeframe. Therefore, longs from here will only be permitted with extremely nice-looking lower timeframe price confirmation.

Should the market break below this 4hr area, however, we’ll likely see price collide with a 4hr demand area at 17546-17633. A bounce north is expected from here (one we intend to take part in with lower timeframe confirmation), as price would, at that point, be located extremely deep within the aforementioned daily decision-point demand area.

Current buy/sell orders:

• Buy orders: 17666-17714 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 17660) 17546-17633 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 17537).
• 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. This move has clearly attracted sellers into the market.

Daily timeframe perspective: From the daily picture, we can see that price is currently teasing the topside of a major daily swap level coming in at 1182.0.

4hr Timeframe perspective: For anyone who is familiar with the Quasimodo pattern, this is what’s just formed beautifully on the 4hr timeframe around the aforementioned major daily swap level (represented by the green-dashed line at 1182.3). Unfortunately, our team was not at their desks while this beauty completed, so we missed the entry.

All may not be lost. Our hope (dangerous word in trading) is that price retests this 4hr Quasimodo support line sometime today. Be that as it may, even if we get a second chance at trading here, we still need to step carefully, since let’s not forget that not only is Gold in a monster downtrend at the moment, but price is also trading from weekly supply (1223.1-1202.6) as well, therefore lower timeframe confirmation is a MUST here.

Current buy/sell orders:

• Buy orders: 1182.3 [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).

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