Week ending April 1, 2022
EUR/USD technical analysis:
EUR/USD bulls failed to build on the previous week’s 1.3% rally last week, ending down 0.6%. In the longer term, the trend remains unfavorable to bullish movements, reflecting the bearish status since hitting $1.2350 in early January (2021). This is bolstered by a weekly break of trendline support, taken from the $1.0636 low, as well as the break of the November 2020 low of $1.1602 (circled) and the pair refreshing since the start of the year at $1.0806 in early March.
Weekly resistance continues to draw attention at $1.1174, strategically positioned in the current downtrend. The weekly channel support, extended from the low $1.1186 (arranged north of the weekly Quasimodo support at $1.0778), remains a technical “floor” at this time.
Sharing chart space with weekly channel support, the daily timeframe shows the move shaking hands with the decision point of $1.0788-1.0854 (as well as cross ascending support, pulled from the $1.0340 3rd January 2017 low) in early March. Weekly resistance at $1.1174 joins closely with daily resistance at $1.1224.
Territory north of the level uncovers a daily resistance zone at $1.1483 (located near the 200-day simple moving average at $1.1506 – price has been trading south of here since mid-June ). Further study on the daily scale reveals that the Relative Strength Index (RSI) has risen above the center line of 50.00. Maintaining the position in the latter case informs market participants that average losses outweigh average gains (negative momentum).
On the page, the technical landscape over the H4 time frame shows that the unit respected trendline resistance (taken from the high of $1.1495) in mid-March, with a descending line crossing the supply of 1 ,1139-1,1090$ at the time. Interestingly, the trendline also held back buyers on Friday. Opportunity to push as far south as support at $1.0903 remains on the table for this chart. A break of 22n/a The March low from $1.0961 is action traders should watch this week to “confirm” a bearish presence on the latest trendline resistance test.
The first-half support around $1.0972, consisting of a 78.6% Fibonacci retracement ratio and a 50.00% level, proved to be a stubborn base, withstanding three attempts at drop last week. Despite this, buyers were unable to strike a deal north of $1.10.
Friday, as you can see, fell back below the psychological level for the fourth time last week, hitting $1.0972 again. What gives this support additional credence is the support turned into resistance of the trendline, taken from the high level of $1.1137, and the nearby support of Quasimodo at the price of $1.0958 (below calls for Quasimodo support at $1.0932, followed by $1.09).
Due to the current trend direction (lower), the weekly and daily resistances between $1.1174 and $1.1224 could welcome active sellers should the “zone” emerge this week. Again, it is important to remain aware of the prospect of further downward moves from the current price, targeting the daily decision point of $1.0788-1.0854.
H1 Quasimodo support at $1.0958 paired with H1 support at $1.0972 and H1 trendline support provides a short-term “floor” to keep in mind at the start of the week.
A crucial technical caveat to keep in mind, however, is the H4 period rejecting trendline resistance and displaying the possibility of price sailing lower to support at $1.0903. For this reason, traders are also advised to prepare for a breach of $1.0958 and a continuation to $1.0932 and $1.09 on the H1.
AUD/USD technical analysis:
Extending last week’s rally gains, AUD/USD gained 1.4% and occupied weekly resistance from $0.7501. This followed the previous week’s decisive bid at the main weekly support at $0.6948-0.7242. Following the recent move, the weekly main resistance at $0.7849-0.7599 is also worth watching this week.
While the upside may excite traders and investors, the trend, according to global chart studies, suggests that breaking above the resistance levels noted on the weekly scale may be problematic. Looking further ahead, the monthly timeframe has depicted a downtrend since August 2011, meaning the 12.9% correction from mid-February highs at $0.8007 (2021) over the timeframe week could be the start of a bearish phase and not a bearish buying opportunity within the 2021 advance from the pandemic lows of $0.5506.
A bearish scene from the resistance at $0.7051 or the main resistance at $0.7849-0.7599 could therefore develop. Should a break lower from $0.6948 to $0.7242 occur, a weekly support at $0.6673 and a 50% retracement at $0.6764 can be seen.
Meanwhile, on the daily timeframe, early trade last week marked a break of trendline resistance (taken from the $0.8007 high). Sending a bullish signal, the possibility of a continuation towards $0.7660 is in sight. As you can see, the double bottom pattern ($0.6991) saw its neckline taken ($0.7314) in early March and drew attention to its profit target at $0.7660 (closely related with the Fibonacci resistance between $0.7641 and $0.7609).
However, given the weekly space tied to resistance (see above), the bullish momentum ran out of energy in the second half of the week, consequently setting upper shadows. According to the Relative Strength Index (RSI), despite a rebound from the 50.00 midline, the indicator has yet to engulf the 68.24 high formed on the 4th.and March. Thus, a bearish divergence could eventually emerge. Should we be entering overbought territory, however, the indicator’s resistance from 74.80 is of particular importance.
According to the H4 space, the currency pair crossed swords with a resistance zone between $0.7547 and $0.7527 (composed of two Quasimodo resistances and a 1.272% Fibonacci expansion) on Thursday. Sellers, at the time of writing, seem unwilling to commit to pulling things towards Quasimodo’s support-turned-resistance at $0.7451. Still, it is important that traders do not overlook this area as the base closely matches the weekly resistance mentioned above at $0.7501.
Major H1 support lies below $0.75 at $0.7465-0.7482. As seen in the H1 time frame, the unit spent Friday’s session respecting $0.75 as support, threatening to join nearby major resistance at $0.7561-0.7540.
The area between the lower boundary of the weekly main resistance at $0.7849-0.7599 and the weekly resistance at $0.7501 is a space likely to be watched closely this week as the trend puts this area below a favorable day for sellers.
The daily stream has the possibility to approach the Fibonacci resistance between $0.7641 and $0.7609 (as well as the double top profit target at $0.7660), which informs technicians that the lower zone Weekly main resistance at $0.7849-0.7599 is a more realistic resistance for sellers this week.
The main support located on the H1 timeframe at $0.7465-0.7482 is strategically positioned below $0.75 to perhaps facilitate a see-saw scenario at the start of the week (stop-run below $0.75) . If that materializes, further buying could overwhelm bearish interest from the main H1 resistance at $0.7561-0.7540 to target $0.76. Note that this is in conjunction with the daily pattern also suggesting a pop in the $0.76 region.