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June 3rd 2021: Greenback Reluctant North of 90.00 as US Jobs Data Nears

Charts: Trading View

EUR/USD:

Monthly timeframe:

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

Following a three-month retracement, support at 1.1857-1.1352 made an entrance and inspired a bullish revival in April, up 2.4 percent at the close. May also extended recovery gains, trading higher by 1.7 percent.

April upside—alongside May’s gains—throws light on the possibility of fresh 2021 peaks in the months ahead, followed by a test of ascending resistance (prior support [1.1641]).

Based on trend studies, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017. Additionally, price breached trendline resistance, taken from the high 1.6038, in July 2020.

Daily timeframe:

Europe’s shared currency found some legs on Wednesday, aided not only on the back of the US dollar index (ticker: DXY) fading session tops (90.25), but also technical bids off Quasimodo resistance-turned support at 1.2169.

Quasimodo resistance from 1.2278 demands attention to the upside; navigating south, on the other hand, shines the technical spotlight back on the 200-day simple moving average, circling 1.1977.

The currency pair, as you can see, has been entrenched within a bullish theme since April’s low just north of Quasimodo support at 1.1688, helped by the longer-term uptrend since early 2020.

The RSI continues to echo weakening upside momentum (some analysts may view this as bearish divergence, though we tend to consider divergence signals within overbought and oversold territory). Indicator support is seen around 51.36.

H4 timeframe:

Technical studies out of the H4 chart pins attention on resistance drawn from 1.2244—a level which capped upside on Tuesday—and the 61.8% Fib support at 1.2133 (arranged north of another 61.8% Fib level at 1.2125).

Between the aforesaid levels, this appears to be no man’s land.

H1 timeframe:

Following the formation of hidden bullish RSI divergence, price welcomed support at 1.2168—a level bolstered by a 61.8% Fib at 1.2178. Subsequently, short-term flow climbed the 1.22 figure and overthrew the 100-period simple moving average at 1.2205.

However, before breakout buyers can find acceptance, resistance at 1.2211 must be dethroned, a move potentially clearing the technical pathway towards two Quasimodo resistances at 1.2241 and 1.2257 (note in between the aforesaid levels, H4 resistance mentioned above at 1.2244 is visible).

RSI action is now toying with the 50.00 centreline; a decisive move north of this angle suggests overbought status could be on the cards, followed by resistance at 78.97.

Observed levels:

Having observed daily flow rebound from support at 1.2169, in addition to the monthly timeframe exhibiting scope to pursue higher levels, H1 resistance at 1.2211 is unlikely to deliver much bearish activity. A H1 close north of 1.2210, therefore, may inspire a short-term bullish scenario towards the H1 Quasimodo resistances at 1.2241 and 1.2257 (along with H4 resistance at 1.2240).

Alternatively, a retest at 1.22 (H1) could stir lower timeframe dip buyers.

AUD/USD:

Monthly timeframe:

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

Since the beginning of 2021, buyers and sellers have been battling for position south of trendline resistance (prior support – 0.4776 low) and supply from 0.8303-0.8082. Should a bearish scenario unfold, support at 0.7394 is featured to the downside, with additional downside pressure targeting demand at 0.7029-0.6664 (prior supply).

Trend studies (despite the trendline resistance [1.0582] breach in July 2020) show the primary downtrend (since mid-2011) remains in play until breaking 0.8135 (January high [2018]).

Daily timeframe:

Unchanged technical view from previous analysis.

Despite rupturing resistance at 0.7816 early May, the level maintains its position on the daily chart. Interestingly, since April 20th, AUD/USD has offered a non-committal tone, consolidating between the aforementioned resistance and support from 0.7699 (yellow). Of late, we can see the currency pair shook hands with the lower wall of the said range and adopted a mild bullish vibe.

Below the consolidation, technicians have support at 0.7563 in sight.

With respect to trend, though, we have been higher since the early months of 2020.

Out of the RSI, the indicator remains flirting with the 50.00 centreline, following a dip from 60.30 peaks in May.

H4 timeframe:

Buyers picked up 0.7696-0.7715 support again on Wednesday—served as support and resistance since the end of January.

Quasimodo resistance from 0.7782 calls for attention north of yesterday’s peaks around 0.7773, though should sellers regain consciousness and take the currency pair south of 0.7696-0.7715, demand is featured at 0.7632-0.7653.

H1 timeframe:

Supply at 0.7783-0.7771, an area which essentially formed a decision point to hammer through last Tuesday’s low at 0.7733, made an entrance yesterday and, following a reasonably spirited shooting star candle pattern (bearish signal), price exhibited a one-sided decline.

Brushing aside the 100-period simple moving average around 0.7737, a recovery subsequently developed within striking distance of support at 0.7714. This had price reclaim the 100-period SMA.

Beyond current supply, technicians will likely have 0.78 noted. South of 0.7714, 0.77 is in sight, closely followed by demand at 0.7671-0.7687.

Traders who follow the RSI indicator will note the value pierced the oversold threshold yesterday, yet wrapped up the session on the front foot, north of the 50.00 centreline (a centreline cross indicates a strengthening of the trend).

Observed levels:

The monthly chart is not offering much at this point. The daily timeframe, however, emphasises a bullish theme off range lows at 0.7699. This is further emphasised on the H4 scale following a rebound from familiar support at 0.7696-0.7715, with Quasimodo resistance at 0.7782 representing an upside target.

Knowing both daily and H4 are open to additional upside, H1 is likely to explore territory north of the 100-period simple moving average at 0.7737 today, crossing swords with supply at 0.7783-0.7771.

Unchanged technical view from previous analysis (italics).

However, knowing H4 Quasimodo resistance resides at 0.7782 (essentially the upper edge of the noted H1 supply), this could draw a move through the supply to form a bull trap, movement which larger traders may look to fade (sell into) to take aim at the 100-period SMA.

An alternative scenario, of course, is H1 price tests 0.78. Having seen this level dovetail closely with daily resistance at 0.7816, between the latter and 0.78 could stir a bearish theme.

USD/JPY:

Monthly timeframe:

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

Following January’s bullish engulfing candle and February’s outperformance, March concluded up by 3.9 percent and marginally cut through descending resistance, etched from the high 118.66.

Although April finished lower by 1.3 percent and snapped the three-month winning streak, May (+0.2 percent) held the breached descending resistance, echoing potential support.

Daily timeframe:

We remain a touch off long-term resistance at 110.94-110.29 (posted under supply at 111.73-111.19), with Wednesday finishing considerably off session highs. 108.60ish lows (circle) represent a logical roadblock, followed by supply-turned demand at 107.58-106.85.

Trend studies reveal the pair has been trending higher since the beginning of 2021.

The RSI recently engaged resistance at 57.00, a level that’s been in play since March 2020. Above this base shifts attention to the possibility of further upside momentum into overbought terrain and resistance at 83.02, whereas below welcomes support around 28.19.

H4 timeframe:

The benchmark 10-year US Treasury note fell in excess of 1 percent on Wednesday, hauling the US dollar (DXY off session tops around 90.24) and the USD/JPY lower.

Demand at 109.02-109.20—a decision point to initially push above 109.71 resistance which aligns closely with trendline support, drawn from the low 107.47—is in view should sellers demand further control.

Traders are also urged to note space north of last week’s peak at 110.20 throws light on supply at 110.85-110.46, secured within daily resistance at 110.94-110.29 and joined by a H4 100% Fib projection at 110.59 as well as a 1.618% Fib expansion at 110.69.

H1 timeframe:

Combining trendline support-turned resistance, pencilled in from the low 108.56, and a 61.8% Fib at 109.87 was sufficient to lure sellers into the market off 109.88 tops. As evident from the H1 scale, the unit settled just south of the 100-period simple moving average at 109.68, with technical eyes now pinned on neighbouring support at 109.45.

Lower on the curve, demand at 109.07-109.20 commands attention, sharing chart space with a 61.8% Fib level at 109.20 (set within the upper range of H4 demand at 109.02-109.20).

Technical information derived from the RSI shows the value travelled through the 50.00 centreline yesterday, following an earlier rotation out of overbought territory. Support at 31.10 is seen as a possible downside target, arranged just north of oversold.

Observed levels:

Short term, attention is on H1 support at 109.45, having seen the base serve as a floor in recent movement. Despite this, the H4 timeframe echoes a possible continuation lower to cross paths with demand at 109.02-109.20 (H1 demand seen within its upper range at 109.07-109.20) before buyers make any serious attempts to push higher, as suggested by monthly flow trying to forge support off a recently breached descending resistance line.

GBP/USD:

Monthly timeframe:

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

The pendulum swung in favour of buyers following December’s 2.5 percent advance, stirring major trendline resistance (2.1161). February subsequently followed through to the upside (1.7 percent) and refreshed 2021 highs at 1.4241, levels not seen since 2018. May, despite diminished volatility during March and April, traded firmly on the front foot, up by 2.8 percent and closed near YTD highs.

Despite the trendline breach (which could serve as possible support if retested), primary trend structure has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way (April high 2018).

Daily timeframe:

Unchanged technical view from previous analysis.

Buyers and sellers have been squaring off (consolidating) a touch south of Quasimodo resistance at 1.4250 since May 18th, following an earlier 1.4003 support retest. Tuesday, however, witnessed the currency pair touch gloves with the Quasimodo and deliver a relatively forceful bearish showing.

Renewed interest to the upside will see 1.4250 likely attempt to form a ceiling again, though a break throws light on the 1.4376 April 2018 high (see monthly analysis).

South of support at 1.4003, traders will note demand resides at 1.3857-1.3940—an important technical area where a decision was made to break above 1.4003 resistance.

Trend in this market has remained firmly to the upside since March 2020.

The RSI recently came in contact with trendline support, taken from the low 36.14, following a period of diminishing upside momentum since May 11th.

H4 timeframe:

Although an earnest attempt to find acceptance north of the H4 chart’s current consolidation between 1.4105 and 1.4219 was seen at the beginning of the week, the range remains intact.

Despite the overall trend facing a northerly trajectory, the range break to the upside connected with the daily Quasimodo resistance mentioned above at 1.4250. One can only imagine the number of range sellers caught out here and breakout buy-stops tripped (bull trap).

Also of technical note is a H4 61.8% Fib level at 1.4099 and a nearby trendline support, taken from the low 1.3668, is seen supporting the lower base of the aforesaid range.

H1 timeframe:

Tuesday watched sellers step forward from a double-top resistance formation at 1.4246, consequently guiding short-term flow sub-1.42.

Leaving 1.41 unchallenged on Wednesday, GBP/USD bulls adopted an offensive phase and retested the underside of the 100-period simple moving average around 1.4182, set alongside a 50.00 retracement at 1.4179. Upstream, we can see that an attempt to cross above the SMA could have price test 1.42 resistance.

From the RSI, the value recovered from support at 33.00 and is currently retesting resistance at 56.58. Overbought space is also nearby, with resistance parked at 84.66.

Observed levels:

From a short-term perspective, the combination of the 100-period simple moving average around 1.4182 and the 50.00 retracement at 1.4179 on the H1 may be enough to tempt an intraday bearish setting today. However, a spike higher to collect unfilled orders around 1.42 should not surprise before any downside attempt takes shape (1.42 aligns closely with the upper side of the H4 range at 1.4219).

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