Charts: trading view

(Italics: previous analysis)

EUR/USD

European and US stock indexes fell sharply on Thursday as central banks around the world hike rates in an attempt to combat rising inflation. Less than stellar US economic data and hawkish comments from the ECB have supported EUR/USD in recent trade, up 1.2%.

From a technical standpoint, although the currency pair has been entrenched in a primary downtrend since 2021, the price is pulling back from the weekly support (composed between 2^n/a January low at $1.0340 [2017] and a 100% Fibonacci projection at $1.0445 [AB=CD harmonic bullish formation]). Of course, the aforementioned weekly support is aided by Quasimodo’s daily support, which came into play Wednesday at $1.0377, and trendline support, taken from the 23.08 low, on the index. relative strength (RSI).

If the momentum gauge continues north, a break above the 50.00 midline would be seen as a positive sign for the bulls (average gains exceeding average losses). Broader medium-term price targets draw attention to daily resistance from $1.0638 followed by weekly resistance at Quasimodo support from $1.0778.

Across the page, in one fell swoop, the price action on the H4 chart engulfed resistance at $1.0483, clearing the river for a potential test of resistance drawn from $1.0655-1.0632. While the charts are clearly echoing a bullish tone right now, the pullback recently shook hands with resistance on the H1 timeframe: a Fibonacci projection of 1.618% from $1.0562 (another bearish build AB= CD). Above you will also notice a major resistance zone at $1.0608-1.0582 which houses the psychological figure of $1.06.

Technical expectation:

The 1.618% Fibonacci projection of the H1 period at $1.0562 is unlikely to have enough reserves to stop higher. However, the area between the daily resistance at $1.0638 and the main H1 resistance at $1.0608-1.0582 might be able to fight back and allow sellers to show in line with the current downtrend.

AUD/USD

On Thursday, the Australian dollar rose against the US dollar, shaping a second consecutive bull session, bolstered by upbeat Australian labor data and sour demand for the greenback.

Despite an enthusiastic pullback in recent days, bolstered by Quasimodo support at $0.6901 on the daily chart, the opportunity to sail south is evident on a weekly timeframe. Price action, consistent with the current primary downtrend (since early 2021), continues to target weekly support between $0.6632 and $0.6764, comprising of 100% Fibonacci projection, price support and a 50% retracement.

That being said, however, it is possible to move higher on the daily timeframe, aiming for the 200-day simple moving average at $0.7242.

Tackling the lower time frames puts the H4 decision point in the mix at $0.7140-0.7098, a clear supply zone that is close to welcoming price action. Interestingly, sharing chart space with the H4 area, we have the $0.71 figure on the H1 scale, alongside a bearish H1 AB=CD pattern at $0.7129 and a ratio Fibonacci retracement of 61.8% from $0.7118.

Technical expectation:

After noting the bearish primary trend and the weekly timeframe pointing to lower levels, a jigsaw above $0.71 to test H1 harmonic resistance at $0.7129 may be in sight. Since the H1 structure enjoys confluence from the H4 decision point at $0.7140-0.7098, sellers may decide to try and make an appearance at this point.

USD/JPY

After a two-week bullish phase, USD/JPY crossed swords with 28^e The January (2002) high at ¥135.16 and prompted a bearish presence this week, down 1.7%, at the time of writing. Since the start of the month, the currency pair is still 2.7% higher, although the weekly timeframe has room as far south as support from ¥125.54, a level below the trough ¥126.36 (24^e May). The potential seller lockout, aside from the unmistakable primary uptrend (since 2021), is the daily supply-side demand that sits between ¥131.93 and ¥131.10.

If we manage to get down here, the doors, technically speaking, are open for a drop from the weekly support highlighted above at ¥125.54. Finally, it should be noted that the daily timeframe Relative Strength Index (RSI) has formed a negative divergence in the overbought space and is now poised to connect with support between 40.00 and 50, 00 (an area serving as a “temporary” oversold region since May 2021 [common view during downtrends]).

Turning to our position on the H4 chart, support turned by Quasimodo resistance is visible nearby at ¥131.25, with additional Quasimodo support barriers visible from ¥130.58 and ¥129.67. Based on the H1 period, price movement has recently fallen in the vicinity of ¥132, touching a low of ¥131.49 and missing the 1.618% Fibonacci projection at ¥131.33 by a hair’s breadth (joined closely with the H4 Quasimodo bracket that became a ¥131.25 bracket).

Technical expectation:

It remains a buyer’s market, according to chart studies. The trend is healthy, daily support is active at ¥131.93-131.10, and H1 price is testing support between ¥131.33 and ¥132. Conservative traders, however, can include H4 support from ¥131.25, providing an area of ​​support between ¥131.25 and ¥132 that buyers can potentially work with.

GBP/USD

Immediately after the Bank of England (BoE) raised its benchmark discount rate by 0.25 basis points to 1.25% on Thursday, the GBP/USD pair fell, leading to selling stops south of the figure of $1.21 before turning north. Sterling finished the session 1.7% higher.

An impressive lower shadow forms on the weekly timeframe after touching Quasimodo support at $1.1958, on track to possibly plot a hammer candlestick formation (bullish signal). With help from daily support at $1.2018, daily trendline resistance (taken from the high of $1.3639) begs attention, followed by weekly resistance from $1.2719 and daily resistance of Quasimodo support at $1.2762. However, outside of the daily timeframe Relative Strength Index (RSI), we can see the indicator testing resistance around the 50.00 midline, after a positive divergence.

Looking at the first half time frame, it is clear that we are disappearing from the lower side of $1.24 at the moment. In light of the recent bullish momentum and the lack of obvious resistance on the H4, daily and weekly timeframes, the $1.24 level is unlikely to serve as much resistance. As such, an H1 close north of $1.24 should come as no surprise, followed by a further rise towards H4 resistance between $1.2524 and $1.2458. Technicians will note that this area also joins an alternate bearish H1 pattern AB=CD (Fibonacci projection of 1.618% at $1.2478) and sits near the daily time frame trendline resistance shown above.

Technical expectation:

An H1 close above $1.24 may open the door for a breakout game for willing buyers, although many will view this as a short-term setup as sellers could emerge from H4 resistance between 1.2524 $ and $1.2458.

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