Wednesday 22nd April: Daily technical outlook and review.

EUR/USD:

Monthly view: From this timeframe, we can see that the Euro has been in a nose dive since 01/05/2014.Presently however, we’re currently seeing price trading around a long-term monthly swap level at 1.0640, which as you can see, also boasts long-term trendline convergence (green line) from the low 0.8230 (02/10/2000).

Weekly view: The weekly scale reveals that supportive pressure is coming in from a weekly demand area at 1.0333-1.0502, positioned just below the aforementioned long-term monthly swap level.

Daily view: Price appears to be trading in no-man’s-land on the daily timeframe between a daily resistance zone at 1.1051-1.0918, and a daily demand area at 1.0461-1.0565, which, if you look back to the weekly chart, you’ll notice that this area was in fact a prior reaction from the aforementioned weekly demand area.

4hr view: During the course of yesterday the Euro sold off taking out the 1.0700 handle, and driving itself into a minor 4hr demand area at 1.0624-1.0690, where active buyers were evidently positioned.

Support seen on the monthly and weekly scale is clear (see above) but with the prevailing downtrend still going strong, it’s quite hard for us to be bullish long-term or even medium-term come to that. In addition to this, we have very little direction being seen on the daily chart at the moment. So, where does this leave us on the 4hr timeframe? Well, we can see that price has spiked above a minor 4hr swing high at 1.0767, likely flushing out stops and clearing the path north to at least the 1.0816 4hr Quasimodo resistance level. Great! We potentially have short-term bullish direction. With that, we’re currently watching the following two levels for confirmed buying opportunities today:

• The round number 1.0700. Trade carefully here, as fakeouts tend to happen. Waiting for prices to confirm strength on the lower timeframes is advised.
• 4hr demand area coming in below at 1.0570-1.0617 (sits just on top of the aforementioned daily demand area and contains the round number 1.0600). Dependent on how price approaches the zone, we may look to enter at market 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) 1.0570-1.0617 [Tentative – confirmation may be required] (Predicative stop-loss orders seen at: 1.0562).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

GBP/USD:

Monthly view: The monthly chart shows we’ve been trending south since hitting the monthly swap level 1.7134. Current price action shows that the bulls are beginning make a stand just above the monthly demand area at 1.4225-1.4541. Quite frankly though, until we see a break above the monthly supply area seen above at 1.5551-1.5096, our long-term bearish bias will remain unchanged.

Weekly view: For the past five weeks, price has been teasing the underside of a weekly swap level coming in at 1.4989.

Daily view: From here we can see hesitation beginning to form among the sellers around the aforementioned weekly swap level. A daily close above this beast would likely encourage further upside in this market.

4hr view: Yesterday’s sessions saw the pound rally nicely from a 4hr demand area at 1.4811-1.4854 up to a 4hr supply area coming in at 1.4982-1.4949.

Given that we’re seeing obvious resistance on the weekly and daily chart at the moment, we have no interest in buying until we see a clean close above not only the aforementioned 4hr supply area but also the 1.5000 number.

With regards to selling, it seems that we may have missed the boat so to speak on shorting the 4hr supply zone. Selling at current prices, when potential support is looming just below at 1.4900 is, from a risk/reward perspective, not something we’d be comfortable participating in.

Therefore, taking all of the above into consideration, opting to stand on the side lines here until more conducive price action presents itself 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).

AUD/USD:

Monthly view: From this angle, we can see price has recently closed below a monthly swing low coming in at 0.7699. This move has likely cleared the path south down towards a monthly swap level seen at 0.7150.

Weekly view: For the past three months or so, the buyers and sellers have been battling for position around a weekly demand area seen at 0.7449-0.7678.

Daily view: The daily scale shows that price is currently resting on top of a mid-range daily swap level at 0.7691.

4hr view: Yesterday’s trading action saw price react beautifully from the 4hr swap area at 0.7695-0.7671. Consequent to this, a local 4hr swing high at 0.7727 was engulfed, thus likely clearing the runway north for intraday buying today up to at least 0.7758.

Owing to the fact that price is trading around demand on both the weekly and daily charts (see above), we’re quite confident a move higher may take place today from around the 0.7700 region. However, let’s not forget that the monthly chart is suggesting further downside could be in store (see above), so waiting for lower timeframe buying confirmation here is highly recommended. In the event that we spot a suitable entry long from this number, our stop will likely be placed BELOW the 4hr demand area seen at 0.7695-0.7671, and our first take-profit target is likely going to be set at 0.7757.

Current buy/sell orders:

• Buy orders: 0.7700 region [Tentative – confirmation required] (Predicative stop-loss orders seen at: N/A).
• Sell orders: Flat (Predicative stop-loss orders seen at: N/A).

USD/JPY:

Monthly view: The trend direction on the monthly timeframe is clear. However, the past few months has seen momentum severely diminish as selling interest appears to be entering the market around monthly supply at 124.13-120.76.

Weekly view: For the past month or so, the buyers and sellers have been seen pulling for position within a weekly demand area coming in at 118.22-119.40. Should a move north be seen from here, keep an eye on the weekly Quasimodo resistance level above at 122.18.

Daily view: The rebound seen from daily support at 118.62 (trendline convergence from 115.55) extended higher yesterday. Further upside at this point will likely see prices challenge the daily Quasimodo resistance level at 120.35.

4hr view: The USD/JPY pair recently made a run at the swing high 119.73. This move likely flushed out a ton of buy stops and also trapped any breakout buyers, potentially clearing the path north up to 119.96.

Should this buying continue, watch for downward pressure to come into the market around the 119.96 mark, which, as you can see lines up nicely with the 120.00 handle. A bounce will likely be seen from here, how much of one is hard to tell at this point, since let’s not forget that price is trading from weekly and daily supportive structures at the moment (see above). Nonetheless, this is a level to keep an eye on for today.

In the event that prices sell off, our attention will then shift to the 4hr demand area at 119.12-119.30. Buying from here will effectively mean one is buying with the predominant trend which has support coming in from both the daily and weekly structures, but what it also means is you’ll be buying directly into monthly supply (see above). Therefore, lower timeframe confirmation and strict trade management is a MUST!

Current buy/sell orders:

• Buy orders: 119.12-119.30 [Tentative – confirmation required] (Predicative stop-loss orders seen at: 119.08).
• Sell orders: 119.96 [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level).

USD/CAD:

Monthly view: The upward trend seems to be losing steam after hitting a monthly supply zone coming in at 1.3063-1.2597. In the event that prices continue to fall from here, we see very little support until price reaches 1.1752.

Weekly view: From this angle we can actually see that price reacted beautifully to a weekly Quasimodo resistance level at 1.2765, positioned relatively deep within the aforementioned monthly supply area. Weekly support is not expected to come into the market until around the 1.1814 point.

Daily view: As you can see, price recently rebounded from a daily swap level at 1.2083. Assuming that the buyers can hold out above this level, traders should keep a close eye on the 1.2386 mark for downward pressure to come into the market.

4hr view: Recent movements on the 4hr scale reveal prices aggressively rallied north towards the 1.2300 level, which, as you can probably see, is also supported by a minor 4hr structural resistance at 1.2305.

Given that both the monthly and weekly scales are showing bearish intent at present (see above), buying right now may not be a good move. That being said, should the buyers manage to close above 1.2300, and successfully defend this level, we would definitely consider taking an intraday long position up to the aforementioned daily swap level/round-number region.

On the flip side, the 1.2300 area could be a nice place to be looking for confirmed shorts today. Granted, 4hr demand at 1.2213-1.2244 is sitting just below, but if we take this trade with a ‘scalp and see’ approach, it may pay off nicely if price manages to get below 1.2200. Remember though, by selling at this level, you’re crossing swords with daily buyers, so monitor your positions closely.

Current buy/sell orders:

• Buy orders: Flat (Predicative stop-loss orders seen at: N/A).
• Sell orders: 1.2300 region [Tentative – confirmation required] (Predicative stop-loss orders seen at: dependent on where one confirms this level).

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