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Weekly Technical Market View: 31st August – 4th September 2020



US Dollar Index:

US DOLLAR INDEX

On August 19, the daily support’s response was at 92.26 and this S/R level has been dynamic since late 2017. Unfortunately, it didn’t last long as it topped above daily supply at 94.02/93.56 on August 21. Within the week, the support which was down by a percent re-entered the frame on Friday, coming with all its dominance which might seem complete and having a bearish candle chart.

Theoretically, there has been a southerly course taken by the immediate trend since the 102.99 peaks on March 20, with the movement in price lately taking out the 94.65 low (March 9) in late July. With the removal of 92.26 support this week, some light will be shed on the 91.00 level and also, there is some potentiality in the daily falling pattern of the wedge (93.91/92.55).

Traders that are centering on momentum-based indicators will as well recognize that the RSI oscillator just left oversold space and is now trending north. About the 200-day simple moving average, circling 97.54, the dynamic value continues to drop, two years after surging regularly.

Virtually, USD buyers may not trade but fill more of the noted falling wedge configuration, to possibly generate sufficient force to traverse with the 91.00 level.

EUR/USD:

EUR/USD

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

In July, the euro made a profit for the third time in the month against the US dollar with about 5 percent. The move collapsed long-term trendline opposition (1.6038) and met with the upper border of supply from 1.1857/1.1352.

This, along with August going for a quite constructive close on the month, suggests further inclination may be a possibility, with trendline opposition (previous support – 1.1641) on the radar as the next objective. Also, an object of concern, though, is the primary downtrend (since July 2008) is still intact, at least until 1.2555 is overwhelmed (Feb 1 high [2018]).

Daily timeframe:

Attempts to widen July’s progress have been limited presently in an expanding channel pattern (1.1695/1.1909), besides supply at 1.2012/1.1937 also just appearing (August 18), unmitigated from May 2018. Trend traders will as well observe the immediate trend advancement since late March.

Fascinatingly, trendline support (1.0774) presently crosses with the abovementioned channel support, possibly strengthening the area in the possibility of a test this week. Alternatively, dip the current supply support movement to the opposition at 1.2095.

Since the start of August, the RSI indicator has descended and left overbought space, presently rotating the 65.00 neighborhood.

H4 timeframe:

Last Thursday, supply at 1.1828/1.1868 tolerated a vigorous impale to highs at 1.1901, sufficient to crackdown numerous sell orders. This, joined with extra fuel from the DXY dropping by 0.7% on Friday, made EUR/USD surge into the week’s end, obtaining the said supply.

H1 timeframe:

In US trading, Friday produced a bullish emblem pattern between 1.1918/1.1868.

Captivatingly, the concluding stages of the session saw price address, and slightly exceed, not just the higher margin of the aforementioned emblem pattern but 1.19 opposition too.

Seen as an extension pattern, the bullish emblem take-profit aim measured by weighing the prior move and summing the rate to the breakout point (blue), can be seen, some pips north of the broadly observed 1.20 figure. Nevertheless, traders will also note the 1.1950 opposition.

Structures of Interest:

Long term:

The monthly timeframe pressures extra purchase beyond supply at 1.1857/1.1352, inclining towards the 1.24 region. We are limited daily in an increasing channel between 1.1695/1.1909, although fairly hindered by supply at 1.2012/1.1937.

Generally, buyers seem to be advantageous this week.

Short term:

After retesting 1.1828/1.1868 on the H4 timeframe, buyers might receive supply moves at 1.1953/1.1929. Hence, H1 also displays bullish signs: preceding 1.19 and removing the bullish emblem’s upper boundary (1.1918).

With the landscape of the higher and lower timeframes also signifying higher moves, buyers could key into H1 structure in early trading this week.

AUD/USD:

AUD/USD

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

May’s extension, coupled with follow-through in June, July, and August, has observed supply at 0.7029/0.6664 and crossing lasting trendline opposition (1.0582) dump its place.

Technically, buyers seem free now to survey as far north as 0.8303/0.8082 in future months, a supply zone allying strongly with trendline opposition (previous support – 0.4776).

Though the price has detached trendline opposition and a prominent supply, the market’s primary trend (since mid-2011) stays south until breaking 0.8135 (January high [2018]).

Daily timeframe:

Besides Monday closing off preeminent levels, the rest of the week assumed a bullish theme with Friday staying at session highs in front of supply from 0.7453/0.7384. The new proceed also instituted a drop-base-rally demand area at 0.7131/0.7192, and drew the RSI indicator to inside overbought territory.

H4 timeframe:

Opposition at 0.7237 brawled slightly on Thursday, with the pair eventually accepting supply at 0.7300/0.7282.

0.7237 performed well as support, with Friday collapsing the aforementioned supply as well as trendline opposition (0.7241). Hence, this resulted in end-of-week trade intersecting with supply at 0.7393/0.7366, an easygoing rally-base-drop supply that cohabits with a 161.8% Fib ext. the level at 0.7373.

H1 timeframe:

The advantage force on Friday dislodged sellers, making sudden exertion of the 0.73 level. Arriving at the US session, although the force fairly diminished, we also filled 0.7350 opposition and thus revealed 0.74 opposition as well as drawing the RSI value into overbought space.

Structures of Interest:

Long term:

Monthly action hints higher moves after taking supply at 0.7029/0.6664, although the primary trend is still behind.

Daily candles hint supply at 0.7453/0.7384 could hamper purchase this week, with retracting sighting demand at 0.7131/0.7192.

Short term:

There could be room for more advantage on the H1 timeframe to 0.74 as buyers institute a position above 0.7350. Conversely, H4 action is fronting supply from 0.7393/0.7366.

Based on this analysis, monthly, daily and the H1 timeframes show there could be a surge, hence, stressing potential intraday bullish action in early trading. This will, certainly, see the H4 supply at 0.7393/0.7366 see pressure.

USD/JPY:

USD/JPY

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

Since its launch in 2017, USD/JPY has been on a steady descent between 118.66/104.62.

It was quite uneventful in April, May, and June, with JPY dithering having a neutral Doji candlestick pattern. However, it sunk by almost 2 percent in July, hitting the lower boundary of the descending triangle, while there were better trades in August.

Daily timeframe:

After improving slightly at 104.62 in early August, supply from 107.58/106.85 has demonstrated defiant (an area cohabiting with trendline opposition from 111.71 and also positioned just below the 200-day simple moving normally at 107.96), with Friday stepping out and chalking up a vigorous bearish external day setback.

H4 timeframe:

After the close of a three-drive bearish pattern at the 127.2% Fib ext. level from 106.86, candlestick moves produced a shooting star pattern, assumed a bearish signal at climaxes, and declined greatly. The move eliminated trendline support (104.18) and analyzed demand at 105.06/105.30.

Abandoning current demand this week will result in monthly support at 104.62.

H1 timeframe:

Exiting 107 unrestricted on Friday, USD/JPY impales several technical supports on the H1 timeframe, analyzing support at 105.20 to-the-pips, a level sited just before the 105 hurdles. Advantageous efforts have so far been limited by 105.50 opposition and trendline opposition from 106.21.

Interest Structures:

Long term:

Since daily supply at 107.58/106.85 has limited advantageous efforts, there is a probability of the monthly descending triangle support at 104.62 to be used this week.

Short term:

The result from H4 demand at 105.06/105.30 has been unsuccessful hitherto to bring much of an advantageous move, limited by trendline opposition (104.18). By the same token, buyers off support at 105.20 encounter opposition from the 105.50 region on the H1 timeframe.

Noting that short-term action can’t easily press higher, alongside the higher timeframes indicating a move towards monthly support at 104.62, this may have traders try to protect bearish tactics off 105.50 in early trading this week.

GBP/USD:

Monthly timeframe:

(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)

In July, GBP/USD finished higher by 5.5 percent, leading to long-term trendline opposition (1.7191) vacating its place.

Notwithstanding the primary trend facing lower since early 2008 (constant until 1.4376 concedes – April 2 high [2018]), the split of current trendline opposition has August heading towards a 2 percent gain, with September probably aiming trendline opposition (2.1161).

Daily timeframe:

Last week, buyers finally gathered enough force to surpass opposition at 1.3201, in order with the instant trend on the daily timeframe. This site a 161.8% Fib ext. level at 1.3408 in the mix this week as possible opposition.

1.3021/1.2844 remains placed as demand, with an infringement exposing the 200-day uncomplicated moving standard at 1.2724.

H4 timeframe:

After Thursday’s dismissal from the supply at 1.3301/1.3273, a drop-base-rally demand area produced at 1.3160/1.3201. Channel opposition (1.3263), plus supply at 1.3301/1.3273, taken from December 2019, were both eliminated in the second half of the week, possibly instituting a foundation for supplementary purchase to supply at 1.3422/1.3389, and a 161.8% Fib ext. level at 1.3421.

H1 timeframe:

Demand at 1.3254/1.3273 obtained price action heading into the US session on Friday, after running ends above 1.33. Price progressed and recovered 1.33 and crossed into 1.3350 opposition by the close. Whilst dragging the RSI indicator into overbought territory, traders will as well note that a 1.3350 break maybe highlights an advance to 1.34.

The Interest Structure:

Long term:

Longer-term price movement hints, buyers will continue to lead the market till next week, at least till we hold the 161.8% Fib ext. level on the daily timeframe at 1.3408.

Short term:

H4 trades in synchrony with the higher timeframes, displaying potentials to reach for supply at 1.3422/1.3389. This discloses 1.3350 opposition on the H1 timeframe is implausible to show sufficient signal, with bullish signals, possibly forming above 1.3350 in early trading, targeting at 1.3389 (the lower edge of H4 supply) and then the 1.34 level on the H1 which also allies directly with the 161.8% Fib ext. level on the daily timeframe at 1.3408.

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