Technical Outlook and Review

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Technical Outlook and Review


USD longs made a comeback Thursday, with the DXY staging a stronger-than-expected recovery above 96.50. This firmly weighed on the euro, the largest component of the index making up almost 58%.To get more news about 1prime options, you can visit wikifx.com official website.

With USD/CHF holding north of its 0.94 handle, EUR/USD, based on the H4 timeframe, found thin air above 1.14, on track to greet the 1.13 handle, as we write. The latter, as you can see, shares space with Quasimodo support at 1.1268 and trend line support, extended from the low 1.0727.

On the data front, US unemployment claims fell to 1.5 million last week and US PPI data for May came in better than expected.
In the week ending June 6, the advance figure for seasonally adjusted initial claims was 1,542,000, a decrease of 355,000 from the previous week’s revised level. The previous week’s level was revised up by 20,000 from 1,877,000 to 1,897,000. The 4-week moving average was 2,002,000, a decrease of 286,250 from the previous week’s revised average. The previous week’s average was revised up by 4,250 from 2,284,000 to 2,288,250.

The Producer Price Index for final demand rose 0.4 percent in May, seasonally adjusted, the US Bureau of Labour Statistics reported today. This increase followed declines of 1.3 percent in April and 0.2 percent in March. On an unadjusted basis, the final demand index decreased 0.8 percent for the 12 months ended in May.

The technical landscape on the higher timeframes had weekly price recently go toe-to-toe with long-standing trend line resistance, stretched from the high 1.2555. Sellers are beginning to make an appearance here and could unwind to 1.1222, the 2020 yearly opening level. Further upside, though, may have the unit cross swords with the 2019 yearly opening level at 1.1445.

In conjunction with the weekly timeframe, daily flow recently touched gloves with resistance at 1.1349, a level converging closely with channel resistance, taken from the high 1.1147. Remaining on the backfoot here throws support at 1.1239 into the light, with a break potentially exposing the 200-day SMA (orange – 1.1020).

1.13, as well as H4 Quasimodo support at 1.1268, is likely to make an entrance thanks to noted higher-timeframe resistance. Technically speaking, though, the pair is unlikely to seek bids until reaching daily support at 1.1239, sited ahead of weekly support at 1.1222 (2020 yearly opening level)/H4 support at 1.1221. Therefore, bearish strategies could be an option upon closing under 1.13 on a H4 basis.Increased dollar demand weighed on the British pound Thursday, with GBP/USD unwinding through 1.27 to 1.26 on the H4 timeframe. 1.26, as you can see, joins with additional support in the shape of May’s opening level at 1.2583, support at 1.2575 and channel resistance-turned support, extended from the high 1.2296.

Meanwhile, on the weekly timeframe, healthy selling emerged from the 61.8% Fibonacci retracement ratio at 1.2718 and the 2019 yearly opening level at 1.2739 in recent movement, on track to close in the form of a shooting star candle pattern. Additional downside has Quasimodo support at 1.2163 to target, while a strong bid could eventually take the currency pair to trend line resistance, extended from the high 1.5930.

Daily price, after Wednesday’s rejection off resistance at 1.2769, dipped through the 200-day SMA (orange – 1.2677) yesterday and underlined the possibility of further declines to support drawn from 1.2485.While 1.26 on the H4 currently holds, higher-timeframe direction indicates possible weakness off the round number. However, given local H4 structure exhibits additional support nearby (highlighted above), along with the current trend displaying an upward bias, buyers are likely to still attempt a recovery.

Once/if we cross beneath H4 support at 1.2575, open space to 1.25 is visible for shorting opportunities, backed, of course, by current higher-timeframe resistances.

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[FrankJScott]

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[FrankJScott]

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[FrankJScott]

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