USD/JPY Forex Technical Analysis – Trade Through 108.407 Changes Main Trend to Down with 108.230 Next Target

The Dollar/Yen is trading lower early Monday after failing to confirm the previous session’s closing price reversal bottom. The move has put the Forex pair within striking distance of a change in trend.

Lower Treasury yields and the lack of fresh economic news is behind today’s early weakness. The price action also suggests that investors believe the Fed’s assessment of the economy in that any surge in inflation is likely to be “transitory” and therefore, rates are going to remain at historically low levels.

At 05:01 GMT, the USD/JPY is trading 108.662, down 0.131 or -0.12%.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum is trending lower. A trade through 108.407 will change the main trend to down.

A move through 110.966 will signal a resumption of the uptrend. This is highly unlikely, but since the Forex pair is down 13 sessions from this main top, traders should start watching for a closing price reversal bottom. We saw one on Friday, but the move wasn’t convincing enough to attract any buyers.

The minor trend is down. This is controlling the momentum. A trade through 109.961 will change the minor trend to up.

The main range is 111.715 to 102.593. The USD/JPY is hovering just above its retracement zone at 108.230 to 107.154. Since this is a potential support area, watch for buyers to show up on a test of this zone.

The short-term range is 108.407 to 110.966. Its retracement zone at 109.385 to 109.687 is a potential upside target and resistance area.

Daily Swing Chart Technical Forecast

The direction of the USD/JPY on Monday is likely to be determined by trader reaction to 108.966.

Bearish Scenario

A sustained move under 108.966 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the main bottom at 108.407.

Taking out the main bottom will change the main trend to down, setting up a possible extension of the selling into the main Fibonacci level at 108.230. Look for buyers on the first test. If this level fails as support then look for the start of a break toward the main 50% level at 107.154.

Bullish Scenario

A sustained move over 108.966 will signal the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into the short-term retracement zone at 109.385 to 109.687.

For a look at all of today’s economic events, check out our economic calendar.

A Light Economic Calendar Leaves COVID-19 and Geopolitics in Focus

Earlier in the Day:

It was a relatively busy start to the day on the economic calendar this morning. The Japanese Yen was in action this morning. Later this morning, finalized industrial production figures from Japan are also due out. Barring a marked revision from prelim figures, however, the numbers should have a muted impact on the Yen and the broader market.

For the Japanese Yen

Trade data was in focus this morning.

In March, the trade surplus widened from ¥215.9bn to ¥663.7bn. Economists had forecast a widening to ¥490.0bn.

According to figures released by the Ministry of Finance,

  • Exports surged by 16.1% to reverse a 4.5% decline from February. Economists had forecast an 11.6% increase.
    • Exports to China jumped by 37.2%, with exports to Western Europe rising by 8.5%.
    • To the U.S, exports rose by a more modest 4.9%.
  • Imports rose by 5.7%, year-on-year, following an 11.8% jump in February. Economists had forecast a 4.7% increase.
    • Imports from China rose by 10.0%, with imports from Western Europe rising by 19.4%.
    • From the U.S, imports rose by 6.5%.

The Japanese Yen moved from ¥108.702 to ¥108.690 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.14% to ¥108.65 against the U.S Dollar.

Elsewhere

At the time of writing, the Aussie Dollar was down by 0.18% to $0.7720, with the Kiwi Dollar down by 0.11% to $0.7134.

The Day Ahead:

For the EUR

It’s a particularly quiet day ahead on the economic calendar. There are no major stats from the Eurozone to provide the EUR with direction.

The lack of stats will leave the EUR in the hands of COVID-19, vaccination rates, and any plans to ease containment measures.

At the time of writing, the EUR was down by 0.32% to $1.1945.

For the Pound

It’s also a particularly quiet day ahead on the economic calendar.

There are no material stats due out of the UK to provide the Pound with direction.

A lack of stats would leave the Pound in the hands of market risk sentiment on the day.

At the time of writing, the Pound was down by 0.11% to $1.3817.

Across the Pond

It’s a quiet day ahead on the economic calendar. There are no material stats to provide the Greenback and the broader markets with direction.

The lack of stats will leave chatter from Capitol Hill and U.S foreign policy in focus. A rise in geopolitical tension between the U.S and China and the U.S and Russia needs monitoring.

From the weekend, news of new COVID-19 cases rising by a record number last week delivered Dollar support early on. The latest surge in new COVID-19 cases comes amidst the ongoing vaccination programs that had delivered market optimism in recent weeks.

At the time of writing, the Dollar Spot Index was up by 0.20% to 91.735.

For the Loonie

It’s another quiet day ahead on the economic calendar. Housing start figures are due out later today.

Barring particularly dire numbers, however, we don’t expect too much influence from the stats.

Expect market risk sentiment and COVID-19 vaccine news to remain the key areas of focus.

At the time of writing, the Loonie was down by 0.10% to C$1.2521 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Fundamental Daily Forecast – Technical Reversal Could Be Signaling Weakening Selling Pressure

The Dollar/Yen finished higher on Friday after the Forex pair touched its lowest level since March 24 early in the session. The move produced a technical closing price reversal bottom that could be the first sign that the buying is greater than the selling at current price levels.

On Friday, the USD/JPY settled at 108.793, up 0.030 or +0.03%.

The price action was driven by a rebound in U.S. Treasury yields that helped the U.S. Dollar stabilize after a second consecutive week of losses.

U.S. Treasury yields bounced back on Friday after the 10-year rate slipped to 1.53% in the previous session. Near the end of the session, the yield on the benchmark 10-year Treasury note rose to 1.587%. Earlier in the month, the 10-year Treasury yield recently topped 1.70%.

US Economic News

U.S. housing starts surged 19.4% to a seasonally adjusted annual rate of 1.739 million units last month, the highest level since June 2006. Economists polled by Reuters had forecast starts would rise to a rate of 1.613 million units in March.

Permits for future home building rose 2.7% to a rate of 1.766 million units last month, recouping only a fraction of February’s 8.8% plunge. They jumped 30.2% compared to March 2020.

Inflation concerns were on consumers’ minds early this month. A separate report from the University of Michigan on Friday showed its preliminary consumer sentiment index rose to 86.5 from a final reading of 84.9 in March. Economists had forecast the index would rise to 89.6.

Finally, the survey’s one-year inflation expectation jumped to 3.7%, the highest level in nearly a decade, from 3.1% in March. Its five-year inflation outlook was unchanged at 2.7%.

Japan Economic News

In Japan, Preliminary Machine Tool Orders came in at 65.0%, up from 36.7%. Core Machinery Orders, however, fell 8.5%, missing the 2.4% forecast and coming in below the previously reported -4.5%.

Japan’s core machinery orders unexpectedly fell 8.5% in February from the previous month, posting a second straight month of declines, government data showed last week.

The fall in core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, compared with a forecast of 2.8% growth in a Reuters poll of economists, the Cabinet Office data showed.

On a year-on-year basis, core orders, which exclude those for ships and electric utilities, declined 7.1% in February, versus a 2.3% gain expected by economists.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Currencies Rise after US Benchmark 10-year Treasury Yield Dipped to One-Year Low

A combination of factors helped the Asia-Pacific currencies post strong gains last week, including a drop in U.S. Treasury yields, a weaker U.S. Dollar and solid economic data in the United States, China and Australia.

The U.S. Dollar posted losses against the Japanese Yen, Australian Dollar and New Zealand Dollars amid an extended retreat in Treasury yields as investors increasingly bought into the Federal Reserve’s insistence of keeping an accommodative policy stance for a while longer.

The benchmark 10-year Treasury yield dipped to a one-month low of 1.528% overnight, moving further away from over a one-year of 1.776% reached at the end of last month, even in the face of Thursday’s stronger-than-expected retail sales and employment data.

U.S. retail sales increased 9.8% last month, beating economists’ expectations for a 5.9% rise, while first-time claims for unemployment benefits tumbled last week to the lowest level in more than a year, separate reports showed on Thursday.

Australian Dollar

The Australian Dollar hit a three week high last week as Australia’s Westpac Consumer Sentiment Index climbed 6.2% to 118.8 in April, up from a month earlier. This marked the highest level since August 2010.

Australian employment data also cemented confidence that the economic recovery was in full swing. Data showed job creation again far outstripped expectations in March as unemployment dropped to a one-year low and the total number of employed passed its pre-pandemic peak.

The data from the Australian Bureau of Statistics (ABS) showed 70,700 net new jobs were created in March, double forecasts of a 35,000 gain. Unemployment dropped to 5.6%, from 5.8% in February, marking a remarkable recovery from the top of 7.5% hit last July when coronavirus lockdowns tipped the economy into recession.

Last week, the AUD/USD settled at .7734, up 0.0115 or +1.51%.

New Zealand Dollar

New Zealand’s central bank left all its current policy settings unchanged last week, saying monetary stimulus should continue to ensure its inflation and employment targets are met.

The Reserve Bank of New Zealand (RBNZ) also said it needed time to observe the impact of new housing market measures and a gradual revival in tourism on its recovering economy.

It kept the official cash rate (OCR) at a record low of 0.25%, while also continuing the NZ$100 billion ($70.55 billion) quantitative easing and Funding for Lending Program (FLP) tools, both introduced last year to support a market hit by the COVID-19 pandemic.

In other news, New Zealand’s actual business confidence figures declined in the first quarter of the year although other parameters improved, suggesting a continued recovery in sentiment, a private think tank said on Tuesday.

A net 13% of firms surveyed expected general business conditions to deteriorate compared with 6% in the previous quarter, the New Zealand Institute of Economic Research’s (NZIER) quarterly survey of business opinion (QSBO) showed.

Last week, the NZD/USD settled at .7146, up 0.0111 or +1.57%.

Japanese Yen

In Japan, Preliminary Machine Tool Orders came in at 65.0%, up from 36.7%. Core Machinery Orders, however, fell 8.5%, missing the 2.4% forecast and coming in below the previously reported -4.5%.

Japan’s core machinery orders unexpectedly fell 8.5% in February from the previous month, posting a second straight month of declines, government data showed last week.

The fall in core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, compared with a forecast of 2.8% growth in a Reuters poll of economists, the Cabinet Office data showed.

On a year-on-year basis, core orders, which exclude those for ships and electric utilities, declined 7.1% in February, versus a 2.3% gain expected by economists.

Last week, the USD/JPY settled at 108.793, down 0.866 or -0.79%.

For a look at all of today’s economic events, check out our economic calendar.

The Week Ahead – Economic Data, Monetary Policy, and Geopolitics in Focus

On the Macro

It’s a quieter week ahead on the economic calendar, with 45 stats in focus in the week ending 23rd April. In the week prior, 72 stats had been in focus.

For the Dollar:

After a quiet 1st half of the week, the weekly jobless claims figures on Thursday will influence.

Expect any increase in claims to test market risk appetite.

On Friday, prelim private sector PMI figures for April wrap things up. The services PMI will have the greatest impact on the markets.

In the week ending 16th April, the Dollar Spot Index fell by 0.66% to 91.556.

For the EUR:

It’s a quiet start to the week on the economic data front.

German wholesale inflation figures for March are due out on Tuesday. Increased market sensitivity to inflation will give the numbers greater attention than usual.

The focus will then shift to prelim April private sector PMIs for France, Germany, and the Eurozone on Friday.

On the monetary policy front, the ECB will also deliver its first monetary policy decision of the quarter on Thursday.

While the ECB is expected to stand pat on interest rates, updates on the bond purchasing program will be the main area of interest.

From the ECB press conference, views on the economic outlook will also need monitoring on the day.

At the end of the week, ECB President Lagarde will be back in action. Following the Thursday press conference, however, there shouldn’t be too many surprises.

The EUR ended the week up by 0.66% to $1.1977.

For the Pound:

It’s a busy week ahead on the economic calendar.

In the first half of the week, employment, wages, and inflation figures will be in focus.

Expect March claimant counts and annual rate of inflation to be the key drivers.

The focus will then shift to March retail sales and prelim private sector PMIs for April on Friday.

Expect the retail sales and services PMI figures to be the key drivers at the end of the week.

On the monetary policy front, BoE Gov. Bailey is scheduled to speak on Wednesday. Expect any views on the economic outlook or monetary policy to influence.

The Pound ended the week up by 0.53% to $1.3779.

For the Loonie:

It’s a relatively busy week ahead on the economic calendar.

On Wednesday, March inflation figures will be in focus ahead of house price figures on Thursday.

Expect the inflation figures to be the key driver, with focus likely to be on the core inflation figures.

On the monetary policy front, the BoC is also in action on Wednesday. With the BoC expected to stand pat on policy, the monetary policy report will be the main area of focus.

The Loonie ended the week up 0.22% to C$1.2503 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a quiet week ahead.

Prelim retail sales figures are due out on Wednesday. With consumption key to the economic recovery, expect plenty of sensitivity to the numbers.

On the monetary policy front, the RBA meeting minutes on Tuesday will also influence.

The Aussie Dollar ended the week up by 1.46% to $0.7734.

For the Kiwi Dollar:

It’s a quiet week ahead.

1st quarter inflation figures are due out on Wednesday.

Expect sensitivity to the numbers, with the markets having little else to consider in the week.

The Kiwi Dollar ended the week up by 1.55% to $0.7142.

For the Japanese Yen:

It is also a relatively quiet week ahead.

Early in the week, March trade data and finalized industrial production figures for February are due out.

Expect the trade data to have the greatest influence in the week.

At the end of the week, inflation figures for March and private sector PMIs will also draw interest. Expect the private sector PMI and services PMI in particular to have the greatest influence.

The Japanese Yen rose by 0.79% to ¥108.80 against the U.S Dollar.

Out of China

It’s a particularly quiet week ahead.

There were no material stats to provide the broader financial markets with direction in the week.

While there are no stats to consider, the PBoC is in action on Tuesday. The markets are expecting the PBoC to leave 1-year and 5-year loan prime rates unchanged.

The Chinese Yuan ended the week up by 0.49% to CNY6.5206 against the U.S Dollar.

Geo-Politics

U.S-China and U.S-Russia relations are the main areas of focus in the week ahead.

The markets will also need to monitor any chatter from Iran, however.

Corporate Earnings

There are some big names on the docket in the week ahead…

From the U.S:

IBM (Mon), Coca Cola (Mon), Procter & Gamble (Tue), Netflix (Tue), Johnson & Johnson (Tue), and American Express (Fri).

From the EU:

Nestle (Thurs), Renault (Thurs), Daimler (Fri), and Software AG (Fri).

Weekly Technical Market Insight: 19th – 23rd April 2021

Charts provided by Trading View

US Dollar Index (Daily Timeframe):

According to the US dollar index, the greenback extended the recent retracement slide by 0.7 percent last week and concluded a touch off session lows.

Technical movement observed an early-week retest at the lower side of the 200-day simple moving average, currently circling 92.21. This followed the prior week’s downside breach of the said SMA, movement typically interpreted as a bearish cue. Chart studies also shine light on nearby Quasimodo support coming in from 91.36, with subsequent selling unmasking additional layers of support at 91.00 and 90.00.

For those who read the previous week’s technical market insight, you may recall the report underlined that trend studies have displayed a downside bias since topping in March 2020, shaped by way of clear lower lows and lower highs (black arrows). Interestingly, the 93.43 31st March peak echoes the early stages of a bearish wave within the current downtrend (dashed black arrow).

RSI movement travelled south of the 50.00 centreline last week, implying momentum remains to the downside for the time being. This unearthed support at 41.24, though a break of the level indicates oversold space could be challenged.

  • While an obvious downtrend is evident, the combination of support at 91.00 and Quasimodo support at 91.36 may underpin a short-term bullish scenario this week. A 91.00 breach, on the other hand, hints at bearish conviction, targeting 90.00 support.

EUR/USD:

Monthly timeframe:

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

Following the three-month retracement slide, demand at 1.1857-1.1352 sparked a resurgence of bullish activity in April, up 2.2 percent MTD. The possibility of fresh 2021 peaks is on the table, followed by a test of ascending resistance (prior support – 1.1641).

Spinning lower, on the other hand, shines the technical spotlight on trendline resistance-turned support, taken from the high 1.6038.

Based on trend studies, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

Largely unchanged reading from previous analysis.

A closer reading of price action on the daily scale reveals EUR/USD voyaged north of the 200-day simple moving average at 1.1900 the week ending April 9th. While interpreted as a bullish signal, buyers and sellers squared off around resistance at 1.1966 at the tail end of last week.

Additional bullish sentiment this week directs the technical radar to another layer of resistance at 1.2058, with further outperformance throwing light on Quasimodo resistance at 1.2278.

Despite the 2021 retracement slide, trend studies show the pair has been trending higher since early 2020.

RSI analysis has the value hovering within touching distance of resistance at 60.30. This follows a trendline resistance breach (taken from the peak 75.97) as well as the formation of a bullish failure swing.

H4 timeframe:

Resistance at 1.1990, sited above daily resistance at 1.1966, capped upside attempts heading into the closing stages of last week. The lack of energy from sellers hints at the possibility of a 1.1990 breach this week, with any bullish bets likely targeting supply at 1.2101-1.2059, which happens to rest on top of daily resistance at 1.2058.

H1 timeframe:

As can be seen from the H1 chart, 1.1956-1.1945 demand proved an effective floor last week, withstanding numerous downside attempts (representing a decision point to break through remaining offers within supply at 1.1956-1.1935).

Trendline support, extended from the low 1.1738, and the 100-period simple moving average at 1.1954, represent additional areas of importance. To the upside, nonetheless, technical analysts will note the 1.20 figure, a widely watched psychological level which may serve as resistance this week. Note that 1.20 resides ten pips above H4 resistance at 1.1990.

Above 1.20 on the H1, resistance is parked at 1.2026 (previous Quasimodo support).

The view from within the RSI oscillator has seen the value weave around the 50.00 centreline since early Thursday. Support to be mindful of rests at 35.45, with resistance tucked inside overbought space at 78.97.

Observed levels:

Long term:

The technical landscape on the bigger picture has buyers at the wheel for now, with monthly price attempting to claw its way out of demand at 1.1857-1.1352. This helps explain the lack of selling around daily resistance at 1.1966.

The above hints at bullish attempts this week, at least until price shakes hands with daily resistance at 1.2058.

Short term:

The bullish vibe stemming from higher timeframes places H4 resistance at 1.1990 in question, along side the 1.20 figure on the H1.

This underscores two possible scenarios:

  • A H1 breakout above 1.20, movement that could interest breakout buyers to H1 resistance at 1.2026, and then daily resistance at 1.2058 as well as H4 supply at 1.2101-1.2059.
  • A test of H1 demand at 1.1956-1.1945 could come about, with buyers likely targeting 1.20, followed by the aforementioned resistances.

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, AUD/USD has been consolidating just south of trendline resistance (prior support – 0.4776 high) and supply from 0.8303-0.8082.

Demand at 0.7029-0.6664 (prior supply) is featured to the downside, should we see a bearish showing over the coming months.

With respect to trend (despite the trendline resistance [1.0582] breach in July 2020), the primary downtrend (since mid-2011) remains in play until breaking 0.8135 (January high [2018]).

Daily timeframe:

The Australian dollar modestly snapped a three-day winning streak on Friday, within striking distance of resistance at 0.7817. North of the latter, supply at 0.8045-0.7985 is on the radar.

Lower on the curve, the 0.7563 February low has delivered support since March 25th.

Momentum remains above the 50.00 centreline, according to the RSI oscillator. Increased upside momentum this week is likely to elbow things to channel resistance, drawn from the high 80.12.

H4 timeframe:

Largely unchanged reading from previous analysis.

H4 shows price retested 0.7696-0.7715 as demand Thursday and held.

Quasimodo resistance at 0.7800 deserves notice as the next potential ceiling this week, closely stationed by demand-turned supply from 0.7848-0.7867.

H1 timeframe:

Demand at 0.7715-0.7737 served buyers in early trade on Friday, guiding the currency pair to tops around 0.7760, before collapsing back into the jaws of demand. Interestingly, this demand is glued to the upper side of H4 demand at 0.7696-0.7715.

Beneath 0.7715-0.7737, 0.77 is visible, fixed north of demand at 0.7679-0.7695. This is an important area as it was within this base a decision was made to break above 0.77. Should buyers command position off 0.7715-0.7737 this week, the 0.78 level is likely watched as probable resistance (also represents Quasimodo resistance on the H4).

RSI action dipped a toe in waters beneath 50.00 on Friday, threatening possible moves into oversold space, in particular support at 19.40.

Observed levels:

Long term:

The daily timeframe displays scope to approach resistance at 0.7817 this week. Overthrowing this level underscores a possible bullish phase to supply at 0.8045-0.7985.

Short term:

Lower on the curve, H4 is attempting to secure position above demand at 0.7696-0.7715, aided by H1 demand plotted at 0.7715-0.7737. Therefore, a run higher from the aforesaid demand areas this week is on the table, targeting 0.78 on the H1, closely followed by daily resistance at 0.7817.

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.

April, currently down 1.7 percent, is retesting the breached descending resistance, movement that may eventually ignite bullish flow. With respect to long-term upside targets, supply at 126.10-122.66 calls for attention.

Daily timeframe:

Largely unchanged from previous analysis.

Bids and offers were pretty much even on Friday, establishing what’s known as a doji indecision candle.

Despite supply at 110.94-110.29 limiting upside since the beginning of April, the monthly timeframe testing descending resistance-turned support questions further selling. Consequently, the collection of lows around 108.36ish (green oval) could limit downside moves.

Structure beyond said lows point to demand at 107.58-106.85, in conjunction with trendline support, etched from the low 102.59.

In terms of trend on the daily scale, we have been decisively higher since early 2021.

RSI action journeyed beneath support at 57.00, and recently dipped a toe under the 50.00 centreline. This implies momentum remains to the downside for the time being.

H4 timeframe:

The Fib cluster drawn between 108.44 and 108.66 (blue), a zone attached to the upper side of demand at 108.31-108.50, stimulated bullish interest on Friday. Sailing through resistance at 108.99 this week may stir additional buying, with the move perhaps underpinning an approach to supply at 109.97-109.72 (houses a 50.0% retracement within at 109.77).

H1 timeframe:

Demand at 108.60-108.71, an area sharing a connection with the H4 Fib cluster at 108.44-108.66, supported price action into the second half of the week.

109 calls for attention to the upside, while any bearish flow could lead to support at 108.39.

Momentum dipped in line with price action on Friday, with the RSI oscillator now facing trendline support, taken from the low 20.94. It’s also worth pointing out the RSI crossed beneath the 50.00 centreline, indicating the possibility of increased strength to the downside.

Observed levels:

Long term:

Monthly action testing descending resistance-turned possible support, alongside daily price testing an area of support around the 108.36 lows, emphasises a potential bullish atmosphere this week.

Short term:

H4 crossing swords with a Fib cluster at 108.44-108.66, fastened to the upper side of H4 demand at 108.31-108.50, reinforces the higher timeframe bullish vibe.

While the above H4 zones may be sufficient to encourage bullish interaction, Friday’s lacklustre buying from H1 demand at 108.60-108.71 suggests the unit could be headed for H1 support at 108.39 before buyers attempt to make a show. Note the aforesaid support resides within the lower range of H4 demand noted above at 108.31-108.50.

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.

Contained within February’s range, however, March snapped a five-month winning streak and formed what candlestick enthusiasts call an inside candle pattern (represents a short-term consolidation with low volatility). A breakout lower would generally be viewed as a bearish signal.

April has offered limited action so far, currently up by 0.4 percent.

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

Daily timeframe:

Sterling recovered earlier losses against the buck Friday and finished around session tops.

Despite the near-two-month corrective slide, GBP/USD has been trending higher since early 2020.

The technical arrangement on the daily chart remains unchanged. Quasimodo support at 1.3609 is seen, a level associated with a 1.272% Fib expansion at 1.3631, as well as 1.618% and 1.272% Fib extension levels at 1.3614 and 1.3607, respectively. In terms of resistance, April 6th top at 1.3919 is likely considered, closely shadowed by a trendline support-turned resistance, taken from the low 1.1409.

RSI movement finished Friday a touch above the 50.00 centreline, suggesting momentum to the upside could continue to gather traction this week.

H4 timeframe:

Latest developments out of the H4 chart reveal Friday crossed swords with trendline support-turned resistance, taken from the low 1.3670. Note this structure is sheltered just under resistance parked at 1.3852.

A rejection from the said resistances this week throws light back on a possible 1.3680 support test, while scaling above resistance tips the scales in favour of a push to April 6th top at 1.3919 mentioned above on the daily timeframe, with further outperformance to perhaps take aim at H4 Quasimodo resistance at 1.4007.

H1 timeframe:

Friday swept through any offers around 1.38 on Friday and triggered buy-stops. Technicians will note that price formed a bearish outside reversal into the close, alongside RSI action testing a trendline support-turned resistance (taken from the low 27.61).

What’s also technically appealing on the H1 scale this week is the Fib cluster (resistance) around 1.3870.

Observed levels:

Long term:

Although the monthly trendline resistance breach in late 2020 promotes a long-term bullish vibe, traders will likely want to see 1.4376 taken out before committing.

Short term:

Over on the shorter-term charts, buyers face a potential ceiling on the H4 scale at trendline resistance and horizontal resistance at 1.3852. H1 also turns the headlights on a Fib cluster around 1.3870. Given this, between 1.3870 and 1.3840ish, sellers could make an entrance in early trading this week, perhaps zeroing in on the 1.38 figure on the H1.

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The Weekly Wrap – Economic Data, COVID-19 Vaccine News, and Geopolitics Were in Focus

The Stats

It was a busy week on the economic calendar, in the week ending 16th April.

A total of 72 stats were monitored, following 36 stats from the week prior.

Of the 72 stats, 38 came in ahead forecasts, with 21 economic indicators coming up short of forecasts. There were 13 stats that were in line with forecasts in the week.

Looking at the numbers, 36 of the stats reflected an upward trend from previous figures. Of the remaining 36 stats, 23 reflected a deterioration from previous.

For the Greenback, it was a second consecutive weekly loss. In the week ending 16th April, the Dollar Spot Index fell by 0.66% to 91.556. In the previous week, the Dollar had fallen by 0.90% to 92.182.

The Dollar remained under pressure following the dovish FOMC meeting minutes from the week prior. This was in spite of a pickup in inflationary pressures, with FED Chair Powell’s reassurances resonating across the markets.

Out of the U.S

It was a busier week on the economic data front.

Key stats included inflation, retail sales, and jobless claims figures, which were market risk positive.

Early in the week, a pick in inflationary pressure failed to spook the markets. In spite of the annual core rate of inflation accelerating to 1.6%, the FED’s assurance of unwavering support was key.

In the week ending 9th April, initial jobless claims decreased from 769k to 576k. Economists had forecast a decline to 700k.

In the month of March, retail sales jumped by 9.8%, reversing a 2.7% decline from February. Core retail sales rose by 8.4%, reversing a 2.5% decline from February.

Economists had forecast retail sales to rise by 5.9% and for core retail sales to increase by 5.0%.

From the manufacturing sector, the Philly FED Manufacturing PMI fell from 51.8 to 50.2 in April. Economists had forecast a sharper decline to 42.0, however.

At the end of the week, stats were also skewed to the positive. The Michigan Consumer Sentiment Index rose from 84.9 to 86.5 in April, according to prelim figures.

In the equity markets, the NASDAQ rose by 1.09%, with the Dow and the S&P500 gaining 1.18% and 1.37% respectively.

Corporate earnings supported the indexes in the week.

Out of the UK

It was a relatively busy week.

Industrial and manufacturing production, trade, and GDP figures were in focus in the week.

It was a mixed set of numbers for the Pound.

While industrial and manufacturing production partially recovered from declines in January, trade data disappointed. Manufacturing production increased by 1.3% in February, after having fallen by 2.3% in January.

The UK’s trade deficit widened from £12.59bn to £16.44bn in February. While exports to the EU picked up, it was with the rest of the world that led to the sharp widening.

In February, the UK’s trade deficit with non-EU countries widened from £4.46bn to £10.73bn.

GDP numbers also disappointed. The economy grew by just 0.4% in February, partially recovering from a 2.2% contraction in January.

In the week, the Pound rose by 0.53% to end the week at $1.3779. In the week prior, the Pound had fallen by 0.90% to $1.3707.

The FTSE100 ended the week up by 1.50%, following a 2.65% loss from the previous week.

Out of the Eurozone

It was a busy week on the economic data front.

Key stats included Eurozone retail sales, industrial production, and trade data along with economic sentiment figures for Germany and the Eurozone.

It was a mixed set of numbers for the EUR.

Retail sales rose by more than expected in February, while industrial production hit reverse.

Economic sentiment figures for Germany and the Eurozone disappointed Sentiment waned in both Germany and the Eurozone.

For Germany, the ZEW Economic Sentiment Index fell from 76.6 to 70.7, while the Eurozone’s declined from 74.0 to 66.3.

At the end of the week, the Eurozone’s trade surplus widened from €11.0bn to €17.7bn, delivering a positive spin at the end of the week.

Throughout the week, inflation figures for member states and the Eurozone were aligned with prelim figures. The pickup in inflationary pressures delivered EUR support in the week.

For the week, the EUR rose by 0.66% to $1.1977. In the week prior, the EUR had risen by 1.19% to $1.1899.

The CAC40 rallied by 1.91%, with the DAX30 and EuroStoxx600 ending the week with gains of 1.48% and 1.20% respectively.

For the Loonie

It was a quieter week.

Manufacturing sales and wholesale sales figures were in focus in the week.

The stats had a muted impact on the Loonie, however, with market sentiment towards crude oil demand providing support. WTI and Brent ended the week up by 6.42% and by 5.90% respectively.

From the Bank of Canada, the BoC’s business outlook survey reflected a pickup in optimism amongst businesses in Q1. The timing of the survey, however, muted the impact as a pickup in new COVID-19 cases and fresh containment measures were introduced after the survey dates.

In the week ending 16th April, the Loonie rose by 0.22% to C$1.2503. In the week prior, the Loonie had risen by 0.38% to C$1.2530.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 16th April, the Aussie Dollar rose by 1.46% to $0.7734, with the Kiwi Dollar ending the week up by 1.55% to $0.7142.

For the Aussie Dollar

It was a relatively busy week.

Key stats included business and consumer confidence and employment figures.

It was a mixed set of stats for the Aussie Dollar.

Business confidence softened modestly in March, while consumer sentiment improved in April.

The numbers were Aussie Dollar positive ahead of the all-important employment figures late in the week.

In March, Australia’s unemployment rate fell from 5.8% to 5.6% in spite of a rise in the participation rate. Another marked increase in employment led to the fall in the unemployment rate. It was noteworthy, however, that full employment fell in the month.

For the Kiwi Dollar

It was also a relatively busy week.

Early in the week, business confidence and electronic card retail sales were in focus.

The stats were Kiwi Dollar positive. Business confidence improved in the 1st quarter, with retail sales on the rise after a slide in February.

At the end of the week, the business PMI jumped from 53.4 to an all-time high 63.6 in March. A sharp increase in new orders and production drove the PMI to its all-time high.

On the monetary policy front, the RBNZ was also in action. While holding rates steady, the rate statement tested the Kiwi Dollar mid-week. Talk of a willingness to cut the cash rate further amidst a slowdown in the recovery pegged the Kiwi back.

For the Japanese Yen

It was a quiet week.

There were no material stats to provide the Yen with direction.

The lack of stats left core machinery orders in focus mid-week, which took an unexpected slide in February.

While the numbers drew interest, concerns over a fresh spike in new COVID-19 cases, geopolitics, and a weaker Greenback delivered Yen support.

The Japanese Yen rose by 0.79% to ¥108.80 against the U.S Dollar. In the week prior, the Yen had risen by 0.92% to ¥109.67.

Out of China

It was a busy week on the data front.

In the first half of the week trade data impressed, with exports surging by 49.0% and imports by 38.1%.

At the end of the week, GDP and industrial production figures were also in focus.

In the 1st quarter, the China economy expanded by 0.6%, quarter-on-quarter, following 2.6% growth in the 4th quarter. Economists had forecasted growth of 1.5%.

Year-on-year, the economy expanded by 18.3%, versus a forecasted growth of 19.0%. In the 4th quarter, the economy had expanded by 6.5% year-on-year.

Industrial production was up by 14.1% in March, year-on-year, falling short of a forecasted 17.2% rise. In February, industrial production had risen by 35.1%.

Other stats from China included fixed asset investment, unemployment, and retail sales figures.

Fixed asset investment rose by 25.6% year-on-year, coming in ahead of a forecasted 25.0% rise. In February, fixed asset investment had increased by 35.0%.

Retail sales increased by 34.2%, which was better than a forecasted 28%. In February, retail sales had risen by 33.8% year-on-year.

Finally, the unemployment rate fell from 5.5% to 5.3% in March. Economists had forecast for unemployment to hold steady at the end of the quarter.

In the week ending 16th April, the Chinese Yuan rose by 0.49% to CNY6.5206. In the week prior, the Yuan had risen by 0.22% to CNY6.5526.

The CSI300 fell by 1.37%, while the Hang Seng ended the week up by 0.94%.

USD/JPY Forex Technical Analysis – Close Over 108.763 Forms Closing Price Reversal Bottom

The Dollar/Yen is trading slightly higher shortly before the close on Friday. The price action reflects the choppy trade in the U.S. Treasury bond market throughout the session.

U.S. Treasury yields rebounded on Friday after the 10-year rate slipped to 1.53% in the previous session. The yield on the benchmark 10-year Treasury note rose to 1.587% in afternoon trading. The yield on the 30-year Treasury bond climbed to 2.275%.

At 20:26 GMT, the USD/JPY is trading 108.800, up 0.036 or +0.03%.

In U.S. economic news, housing starts jumped 19.4% month-over-month in March, according to the Commerce Department, while building permits rose 2.7%. Additionally, the University of Michigan’s consumer index rose in April to 86.5 from 84.9 a month prior.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through 108.407 will change the main trend to down. A move through 110.966 will signal a resumption of the uptrend.

The minor trend is down. A trade through 109.961 will change the minor trend to up. This will shift momentum to the upside.

The major support is the retracement zone at 108.230 to 107.154. This zone is controlling the near-term direction of the USD/JPY.

The short-term range is 108.407 to 110.966. The Forex pair is trading on the weak side of its retracement zone at 109.385 to 109.687. This zone is the nearest resistance.

Short-Term Outlook

The USD/JPY is currently trading inside the window of time for a closing price reversal bottom. The direction of the Forex pair into the close on Friday is likely to be determined by trader reaction to 108.763.

Bullish Scenario

A sustained move over 108.763 will indicate the presence of buyers. If this move creates enough late session momentum then look for a spike into at least 109.385.

Bearish Scenario

A sustained move under 108.763 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the main bottom at 108.407, followed by the main Fibonacci level at 108.230.

Side Notes

A close under 108.763 will form a closing price reversal bottom. If confirmed on Monday then look for the start of a 2 to 3 day rally into at least 109.385 – 109.687. The move will also shift momentum to the upside.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Weekly Price Forecast – US Dollar Pulls Back Toward Support

The US dollar has fallen during the course of the week, to break below the ¥109 level. That being said, the market certainly looks as if it is trying to find a bit of support in this area, and if you look at it on the daily timeframe, you can clearly see that there are a lot of buyers and noise in this general vicinity, so it will be interesting to see whether or not this market can keep itself supported in this area. If we get a daily close above the ¥109 level, then I would be a buyer to go looking at the ¥110 level as a potential target, perhaps even the ¥111 level.

USD/JPY Video 19.04.21

If we break down below the ¥108 level, then it is possible that we go much lower, perhaps reaching towards the ¥106 level. That being said, I think that would be an extreme move, and if we were to look at the pair falling like that, it would probably be a major “risk off” type of situation where the yen would not only pick up strength against the US dollar, but probably against most other currencies.

At this point, the market looks as if it is trying to form some type of either top or supportive move, so at this point it is going to be best to allow the market to make up its mind before you get involved. All things being equal, if we were to break above the recent highs, it is likely that we go looking towards the ¥112 level, maybe even the ¥115 level. This is a huge move that we have recently seen, so it does make a certain amount of sense that we get that pullback.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Price Forecast – US Dollar Trying to Find Footing Against Yen

The US dollar has gone back and forth during the course of the trading session on Friday as we are looking for some type of support to finally break out to the upside again. The ¥109 level being broken on a daily close would be my signal to start going long, as we have had a nice pullback to a major support level in order to perhaps try to go to the upside again. We have been in a major uptrend, and therefore it makes a certain amount of sense that we would get this pullback as we had been a bit overdone.

USD/JPY Video 19.04.21

All things been equal, I would anticipate a lot of support between here and the ¥108 level, especially now that the 50 day EMA is sitting in that area. The market has continued to see a lot of bullish pressure over the longer term, but the last couple of weeks have been brutal. The last couple of weeks have been a nice pullback though, and now that we are sitting in the midst of what previously could have been thought of as a bullish flag or a pennant, then I think we probably have the ability to find some buying pressure in this area.

Breaking down below the 50 day EMA at the ¥108 level could lead to something rather significant though, and then at this point in time it is likely going to reach towards the 200 day EMA underneath. Ultimately, I do think that we go higher but we need a little bit of stability over the course of a couple of days to get long again.

For a look at all of today’s economic events, check out our economic calendar.

Economic Data and Geopolitics Keep the Dollar in the Spotlight

Earlier in the Day:

It was a busy start to the day on the economic calendar this morning. The Kiwi Dollar was in action this morning, with economic data from China also in focus.

For the Kiwi Dollar

Business PMI numbers were in focus in the early hours.

In March, the Business PMI increased from 53.4 to an all-time high 63.6.

According to the March survey,

  • A sharp increase in the production sub-index from 58.4 to 66.8 and the new orders sub-index from 58.0 to 72.5 drove the PMI to its all-time high.
  • The employment sub-index saw a more modest rise from 50.2 to 53.5

The Kiwi Dollar moved from $0.71740 to $0.71767 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.25% to $0.7152.

From China

GDP and March industrial production figures were in focus this morning.

In the 1st quarter, the China economy expanded by 0.6%, quarter-on-quarter, following 2.6% growth in the 4th quarter. Economists had forecasted growth of 1.5%.

Year-on-year, the economy expanded by 18.3%, versus a forecasted growth of 19.0%. In the 4th quarter, the economy had expanded by 6.5% year-on-year.

Industrial production was up by 14.1% in March, year-on-year, falling short of a forecasted 17.2% rise. In February, industrial production had risen by 35.1%.

Other stats from China included fixed asset investment, unemployment, and retail sales figures.

Fixed asset investment rose by 25.6% year-on-year, coming in ahead of a forecasted 25.0% rise. In February, fixed asset investment had increased by 35.0%.

Retail sales increased by 34.2%, which was better than a forecasted 28%. In February, retail sales had risen by 33.8% year-on-year.

Finally, the unemployment rate fell from 5.5% to 5.3% in March. Economists had forecast for unemployment to hold steady at the end of the quarter.

The Aussie Dollar moved from $0.77345 to $0.77241 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.35% to $0.7725.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.08% to ¥108.85 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Finalized April inflation figures for Eurozone are due out later today.

Following finalized numbers from member states in the week, we don’t expect too much influence from the numbers, however.

At the time of writing, the EUR was down by 0.12% to $1.1953.

For the Pound

It’s another particularly quiet day ahead on the economic calendar.

There are no material stats due out of the UK to provide the Pound with direction.

The lack of stats leaves the Pound in the hands of COVID-19 and vaccine news.

At the time of writing, the Pound was down by 0.22% to $1.3756.

Across the Pond

It’s another busy day ahead on the economic calendar. Building permit and housing start figures are due out along with prelim consumer sentiment figures for April.

Expect the consumer sentiment figures to have a greater impact on the day.

Away from the economic calendar, chatter from Capitol Hill will also need monitoring.

At the time of writing, the Dollar Spot Index was up by 0.09% to 91.757.

For the Loonie

It’s another quiet day ahead on the economic calendar. Wholesale sales figures for February are due out later today.

Barring particularly dire numbers, however, we don’t expect too much influence from the stats.

Expect market risk sentiment and COVID-19 vaccine news to remain key areas of focus.

At the time of writing, the Loonie was down by 0.12% to C$1.2558 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

April 16th 2021: DXY Indecisive Amid Upbeat US Retail Sales and Declining US Treasury Yields

Charts provided by Trading View

EUR/USD:

Monthly timeframe:

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

March carved out a third consecutive loss, extending the 2021 retracement slide by 2.8 percent. Recent underperformance, as you can see, pulled EUR/USD into the upper range of demand at 1.1857-1.1352.

April’s 2.1 percent rebound from the aforesaid demand thus far shifts attention to the possibility of fresh 2021 peaks and a test of ascending resistance (prior support – 1.1641). Extending lower, on the other hand, shines the technical spotlight on trendline resistance-turned support, taken from the high 1.6038.

Based on trend studies, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

Partly modified from previous analysis.

Despite US retail sales surging 9.8 percent in March, and US unemployment claims totalling 576,000 (consensus: 703,000), the US dollar index concluded Thursday unmoved.

EUR/USD, as you can see, engages with resistance drawn from 1.1966. Additional bullish sentiment directs the technical radar to another layer of resistance at 1.2058.

Despite the 2021 retracement slide, trend studies reveal the pair has been trending higher since early 2020.

RSI analysis has the value hovering within TOUCHING distance of resistance at 60.30. This follows a trendline resistance breach last week (taken from the peak 75.97) as well as a bullish failure swing.

H4 timeframe:

Although the pair left behind a muted tone on Thursday, resistance at 1.1990 made an entrance.

Traders will be looking to 1.1937 to provide support should a modest decline materialise. A 1.1990 breach, on the other hand, shines the technical spotlight on supply at 1.2101-1.2059, which happens to rest on top of daily resistance at 1.2058.

H1 timeframe:

1.1956-1.1945 demand is an area of technical importance on the H1 scale, representing a decision point to break through remaining offers within supply at 1.1956-1.1935.

South of demand, analysts will note trendline support, extended from the low 1.1738, aligning with the 100-period simple moving average at 1.1935. Equally important, of course, is potential resistance residing around the 1.20 figure, a widely watched psychological level.

RSI action dipped to trendline support, taken from the low at 20.57.

Observed levels:

Longer-term flow reveals monthly price showing signs of bullish life out of demand at 1.1857-1.1352, potentially placing upside pressure on daily resistance at 1.1966.

Across the page on the shorter-term charts, we can see that although H1 demand is respected structure at 1.1956-1.1945, H1 trendline support and the 100-period simple moving average at 1.1935 could be the more appealing supports, having seen a convergence with H4 support at 1.1937.

AUD/USD:

Monthly timeframe:

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

February finished considerably off best levels, establishing what many candlestick fans call a shooting star pattern—a bearish signal found at peaks. What’s interesting was February also came within striking distance of trendline resistance (prior support – 0.4776 high), sheltered under supply from 0.8303-0.8082.

March subsequently erased 1.5% over the Month and probed February’s lows. Any follow-through selling shines light on demand at 0.7029-0.6664 (prior supply).

With respect to trend (despite the trendline resistance [1.0582] breach in July 2020), the primary downtrend (since mid-2011) remains in play until breaking 0.8135 (January high [2018]).

Daily timeframe:

Partly modified from previous analysis.

Functioning as a proxy for global risk sentiment, the Australian dollar extended recovery gains against the US dollar on Thursday.

Up by 0.4 percent at the time of writing, increased interest to the upside shifts focus to resistance at 0.7817.

It’s also worth noting that since 25th March, buyers and sellers squared off around the 0.7563 February low, aided by a 1.272% Fib extension at 0.7545.

Trend studies reveal the unit has been higher since early 2020.

Momentum, as measured by the RSI oscillator, recently scaled the 50.00 centreline after discovering a floor off channel support at the end of March, taken from the low 43.70.

H4 timeframe:

The technical landscape on the H4 scale shows price retested 0.7696-0.7715 as demand yesterday and established short-term buying. Quasimodo resistance at 0.7800 deserves notice as the next potential ceiling, closely stationed by demand-turned supply from 0.7848-0.7867.

H1 timeframe:

Supply at 0.7747-0.7734, despite sparking moderate bearish flow in early trade on Thursday, stepped aside and served as demand heading into US hours. North of 0.7747-0.7734, the path appears relatively clear to 0.78.

In spite of the bullish tone, momentum, according to the RSI oscillator, is levelling off in the form of bearish divergence out of overbought territory. Note Wednesday also shook hands with resistance at 80.85.

Observed levels:

The daily timeframe displays scope to approach resistance at 0.7817, a level sharing space with Quasimodo resistance on the H4 timeframe at 0.7800 which, of course, also represents 0.78 psychological resistance on the H1.

The above, therefore, informs technicians that a short-term bullish wave may come about from H1 demand at 0.7747-0.7734 today, targeting 0.78.

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.

April, currently down 1.8 percent, is seen retesting the breached descending resistance, movement that may eventually entice bullish flow. With respect to long-term upside targets, supply at 126.10-122.66 calls for attention.

Daily timeframe:

Largely unchanged from previous analysis.

USD/JPY shed 0.2 percent on Thursday, nearing three-week troughs in the shape of four consecutive bearish candles.

Despite supply at 110.94-110.29 limiting upside since the beginning of April, the monthly timeframe testing descending resistance-turned support questions further selling. Consequently, the collection of lows around 108.36ish (green oval) could limit downside moves.

Structure beyond said lows show demand coming in at 107.58-106.85, alongside trendline support, etched from the low 102.59.

In terms of trend on the daily scale, we have been decisively higher since early 2021.

RSI action journeyed beneath support at 57.00, and recently dipped a toe under the 50.00 centreline. This implies momentum remains to the downside for the time being.

H4 timeframe:

Recent downside action pulled H4 candles into a Fib cluster between 108.44 and 108.66 (blue), glued to the upper side of demand at 108.31-108.50. Note the area also holds lows highlighted on the daily scale around 108.36.

H1 timeframe:

Early London and early US hours probed demand at 108.60-108.71 (shares a connection with the H4 Fib cluster at 108.44-108.66). To the upside, 109 calls for attention, while any bearish flow could lead to support at 108.39.

RSI movement shows the value bottoming north of oversold space, forming what technicians call bullish divergence.

Observed levels:

Monthly action testing descending resistance-turned possible support, alongside daily price testing a possible area of support around the 108.36 lows and H4 crossing swords with a Fib cluster at 108.44-108.66, could have H1 buyers attempt to make a show from demand at 108.60-108.71.

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 followed through to the upside (1.7 percent) and refreshed 2021 highs at 1.4241, levels not seen since 2018. Contained within February’s range, however, March snapped a five-month winning streak and formed what candlestick enthusiasts call an inside candle pattern (represents a short-term consolidation with low volatility). A breakout lower in subsequent months would generally be viewed as a bearish signal.

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

Daily timeframe:

Largely unchanged from previous analysis.

GBP/USD ended another session off peaks.

The technical arrangement present on the daily chart remains unchanged. Quasimodo support at 1.3609 is seen, a level connected with a 1.272% Fib expansion at 1.3617, as well as 1.618% and 1.272% Fib extension levels at 1.3614 and 1.3607, respectively.

With reference to trend, GBP/USD has been trending higher since early 2020.

RSI movement is seen closing in on the underside of the 50.00 centreline, following 40.00 lows formed on 9th April.

H4 timeframe:

Unchanged from previous analysis.

Action out of the H4 chart remains focussed on support at 1.3680, as well as trendline support-turned resistance, taken from the low 1.3670.

Additional areas to be cognisant of are 1.3852 resistance and Quasimodo support mentioned above on the daily timeframe at 1.3609.

H1 timeframe:

Unchanged from previous analysis.

The 1.38 figure, surrounded by a 1.272% Fib expansion at 1.3809 and a 50.0% retracement level at 1.3793, continued to deliver resistance on Thursday. 1.3750 support remains in sight to the downside, sharing chart space with the 100-period simple moving average at 1.3754.

Demand-turned supply at 1.3853-1.3869, along with a number of Fib studies between 1.3870 and 1.3847, is an area worth noting higher on the curve. Below 1.3750, technical eyes will likely be drawn to 1.37.

Interestingly, the RSI nudged beneath trendline support, taken from the low 27.58, and subsequently retested the lower side of the ascending line around the 55.00ish region.

Observed levels:

With higher timeframe levels showing limited support and resistance nearby, GBP/USD traders are likely monitoring 1.3750 support on the H1, along with 1.3809-1.3793 resistance.

A H1 close above 1.3809-1.3793 may spark breakout buying, with many taking aim at H1 supply from 1.3853-1.3869. Not only does this base align with numerous Fib levels, the area also joins with H4 resistance at 1.3852.

A H1 close beneath 1.3750, on the other hand, signals a bearish scenario to 1.37.

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USD/JPY Price Forecast – US Dollar Continues to Look For Support

The US dollar has pulled back a bit during the trading session on Thursday, as we are now below the ¥109 level. By doing so, we are in the midst of the previous consolidation area that cause so much noise and bullish pressure in this market. By doing so, it looks as if the market is trying to build a bit of a base up to continue the longer-term uptrend. At this point, if we were to retake the ¥109 level, then I think we will continue to go higher.

USD/JPY Video 16.04.21

To the downside, if we were to break down below the ¥108.35 level, then it is possible that we could go to the 50 day EMA. The 50 day EMA currently sits at the ¥108 level, and that should in and of itself be supportive as well. Regardless, I do not have any interest in trying to short this market, because it has been so strong as of late. While yields in America have calmed down quite a bit, they are still light years away from the low level that Japan sees, and therefore I think it does make quite a bit of sense that we would have plenty of buyers on these dips. Furthermore, the US dollar is starting to pick up a little bit of a bid against multiple currencies again, so that could also come into play.

To the upside, I believe that the market will probably target the ¥111 level again, but we had gotten so overbought that it is not a huge surprise that we needed to do this. This is simply a dip that people will be looking to take advantage of, as many people have missed the entire move up.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Forex Technical Analysis – Downside Momentum Sets Up Move into 108.407, Followed by 108.230

The Dollar/Yen is trading at its lowest level since March 25 on Thursday as U.S. bond yields pulled back from last month’s surge with investors buying the Federal Reserve’s arguments that interest rates can stay low.

At 09:36 GMT, the USD/JPY is trading 108.737, down 0.197 or -0.18%.

U.S. Treasury yields are drifting lower on Thursday morning, ahead of the release of weekly jobless claims and monthly retail sales data, dragging down the U.S. Dollar.

Meanwhile, investors are positioning themselves ahead of the U.S. weekly jobless claims and March retail sales reports that could offer further clarity as to the strength of the U.S. economic recovery.

The initial jobless claims report is expected to show another 710,000 claims were filed for the first time during the week-ended April 10. March retail sales are also set to come out at 12:30 GMT and are expected to have jumped 6.1%, versus a 3% decline in February.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through 108.407 will change the main trend to down. A move through 110.966 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum. A trade through 109.961 will change the minor trend to up.

The main range is 111.715 to 102.593. Its retracement zone at 108.230 to 107.154 is the primary downside target and potential support. This zone is also controlling the near-term direction of the Forex pair.

The short-term range is 108.407 to 110.966. The USD/JPY is trading on the weak side of its retracement zone at 109.385 to 109.687, making it a resistance area.

Daily Swing Chart Technical Forecast

Look for a bearish tone on Thursday as long as the USD/JPY remains under 109.385.

Bearish Scenario

A sustained move under 109.385 will indicate the presence of sellers. The first downside target is the main bottom at 108.407. Taking out this level will change the main trend to down with 108.230 to 107.154 the next likely target zone. Look for buyers on the first test of this area.

Bullish Scenario

If the intraday momentum shifts to the upside then look for a possible rally into 109.385. Sellers are likely to come in on the first test of this level. Overcoming it will likely trigger a move into 109.687.

Side Notes

With today’s reports, it’s important that you trade the reaction in the Treasury yields and not the headline numbers.

For a look at all of today’s economic events, check out our economic calendar.

Canadian Dollar Flexes Muscles

The GBPJPY is in a triple top formation and a divergence on MACD and RSI. There’s a very promising short but before that happens sellers need to break the neckline of this pattern.

The AUDCAD broke the neckline of the inverted head and shoulders formation and later tested it as a closest support.

The EURCAD bounced off a crucial horizontal resistance with two shooting stars. That’s usually very pessimistic.

The Canadian Dollar Index is in a false breakout from the head and shoulders formation. That is promising for the CAD.

The USDCAD bounced off long-term down trendlines and broke the lower line of the rectangle.

The USDJPY is possibly in a very dangerous bearish reversal.

The AUDUSD denied the long-term sell signal and is aiming lower.

For a look at all of today’s economic events, check out our economic calendar.

U.S Jobless Claims and Retail Sales Put the Greenback in the Spotlight

Earlier in the Day:

It was a quieter start to the day on the economic calendar this morning. The Aussie Dollar was in action this morning.

For the Aussie Dollar

Employment figures were in focus this morning.

According to the ABS,

  • The unemployment rate fell from 5.8% to 5.6% in March, while the participation rate rose from 66.1% to 66.3%.
  • In March, employment increased by 70,700 following an 88,700 rise in February. Economists had forecast a more modest 35,000 increase.
  • Full employment declined by 20,800, however, partially reversing an 89,100 rise from February.

The Aussie Dollar moved from $0.77377 to $0.77253 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.09% to $0.7721.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.05% to ¥108.88 against the U.S Dollar, with the Kiwi Dollar up by 0.10% to $0.7148.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Finalized April inflation figures for Germany, France, and Italy are due out later today.

Barring a marked upward revision from prelim figures, however, we don’t expect the numbers to influence.

Away from the economic calendar, news updates on COVID-19 and vaccination rates will continue to influence.

At the time of writing, the EUR was down by 0.04% to $1.1975.

For the Pound

It’s a particularly quiet day ahead on the economic calendar.

There are no material stats due out of the UK to provide the Pound with direction.

The lack of stats leaves market sentiment towards the latest easing of lockdown measures in focus along with next steps.

At the time of writing, the Pound was down by 0.03% to $1.3775.

Across the Pond

It’s a busier day ahead on the economic calendar. Retail sales, jobless claims, and Philly FED Manufacturing PMI numbers are in focus.

Industrial production, business inventories, and NY Empire State manufacturing numbers are also due out. We don’t expect these stats to have an impact on the broader market, however.

At the time of writing, the Dollar Spot Index was down by 0.02% to 91.671.

For the Loonie

It’s a quiet day ahead on the economic calendar. Manufacturing sales figures for February are due out later today.

Barring particularly dire numbers, however, we don’t expect too much influence from the stats.

Expect market risk sentiment and economic data from the U.S to have a greater impact market risk sentiment and the Loonie.

At the time of writing, the Loonie was up by 0.01% to C$1.2520 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

April 15th 2021: 91.60 Daily Support Makes an Entrance on the US Dollar Index

Charts provided by Trading View

EUR/USD:

Monthly timeframe:

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

March carved out a third consecutive loss, extending the 2021 retracement slide by 2.8 percent. Recent underperformance, as you can see, pulled EUR/USD into the upper range of demand at 1.1857-1.1352.

April’s 2.8 percent rebound from the aforesaid demand thus far shifts attention to the possibility of fresh 2021 peaks and a test of ascending resistance (prior support – 1.1641). Extending lower, on the other hand, shines the technical spotlight on trendline resistance-turned support, taken from the high 1.6038.

Based on trend studies, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

Dollar action navigated to three-week troughs on Wednesday. Interestingly, though, the US dollar index (ticker: DXY) shook hands with 91.60 support.

EUR/USD, following Tuesday’s one-sided advance north of the 200-day simple moving average (currently circling 1.1896), crossed swords with resistance at 1.1966 Wednesday. Follow-through upside here shines the technical spotlight on resistance at 1.2058.

Despite the 2021 retracement slide, trend studies reveal the pair has been higher since early 2020.

RSI analysis has the value hovering within striking distance of resistance at 60.30. This follows a trendline resistance breach last week (taken from the peak 75.97) as well as a bullish failure swing.

H4 timeframe:

Quasimodo resistance at 1.1937 stepped aside in recent trading (now potential support) and unlocked upside towards resistance at 1.1990. Upstream, interesting supply resides at 1.2101-1.2059 (sits on top of daily resistance at 1.2058).

H1 timeframe:

Supply from 1.1956-1.1935 had its upper side penetrated on Wednesday, with subsequent movement retesting the zone as demand and holding. 1.20 is seen as potential resistance on the H1 chart, with additional bullish flow targeting resistance at 1.2026 (previous Quasimodo support).

Modest RSI bearish divergence materialised around overbought space. The value currently circles the 60.00 region.

Observed levels:

The 1.20 figure based on the H1 and H4 resistance from 1.1990 forms potential confluence to be mindful of.

A H1 close north of 1.20, however, unbolts a possible bullish scenario, targeting H1 resistance at 1.2026, followed by H4 supply at 1.2101-1.2059 and daily resistance at 1.2058.

AUD/USD:

Monthly timeframe:

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

February finished considerably off best levels, establishing what many candlestick fans call a shooting star pattern—a bearish signal found at peaks. What’s interesting was February also came within striking distance of trendline resistance (prior support – 0.4776 high), sheltered under supply from 0.8303-0.8082.

March subsequently erased 1.5% over the Month and probed February’s lows. Follow-through selling shines light on demand at 0.7029-0.6664 (prior supply).

With respect to trend (despite the trendline resistance [1.0582] breach in July 2020), the primary downtrend (since mid-2011) remains in play until breaking 0.8135 (January high [2018]).

Daily timeframe:

The Australian dollar outperformed against a broadly softer US dollar on Wednesday, adding more than 1 percent on the session and concluding at tops. Following a period of indecision around the 0.7563 February low, aided by a 1.272% Fib extension at 0.7545, recent enthusiasm elbowed resistance into the spotlight at 0.7817.

Trend studies reveal the unit has been higher since early 2020.

Momentum, as measured by the RSI oscillator, climbed the 50.00 centreline after discovering a floor off channel support, taken from the low 43.70.

H4 timeframe:

Trendline resistance, extended from the high 0.8007, as well as supply at 0.7696-0.7715, came under fire yesterday. Quasimodo resistance at 0.7800, therefore, deserves notice as the next potential ceiling, closely stationed by demand-turned supply from 0.7848-0.7867.

H1 timeframe:

Supply at 0.7747-0.7734 made an entrance amid US hours on Wednesday, following a decisive advance through 0.77 offers. Price action traders will note this movement established a demand area at 0.7679-0.7695

North of 0.7747-0.7734, the path appears relatively clear to 0.78.

Resistance at 80.85, plotted within overbought space on the RSI oscillator, welcomed the value as price tested supply. As you can see, noted resistance has so far held form, with the value on course to potentially exit overbought territory (considered a bearish signal).

Observed levels:

Scope to advance on the daily timeframe until resistance at 0.7817 places a question mark on H1 supply at 0.7747-0.7734. This, coupled with H4 action overthrowing supply at 0.7696-0.7715, highlights a bullish market for the time being.

A retest of the H4 supply-turned demand at 0.7696-0.7715 may entice dip-buyers, particularly if H1 greets 0.77.

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.

April, currently down 1.6 percent, is seen retesting the breached descending resistance, movement that may eventually entice bullish flow. With respect to long-term upside targets, supply at 126.10-122.66 calls for attention.

Daily timeframe:

Partly modified from previous analysis.

The greenback eked out modest losses against the Japanese yen Wednesday, consequently extending downside for a third consecutive session.

Despite supply at 110.94-110.29 limiting upside since the beginning of April, the monthly timeframe testing descending resistance-turned support questions further selling. Consequently, the collection of lows around 108.36ish (green oval) could limit downside moves.

Structure beyond said lows, however, shows demand coming in at 107.58-106.85 alongside trendline support, etched from the low 102.59.

In terms of trend on the daily scale, we have been decisively higher since early 2021.

RSI action journeyed beneath support at 57.00, and recently dipped a toe under the 50.00 centreline. This implies momentum remains to the downside for the time being.

H4 timeframe:

As noted in previous writing, supply at 109.97-109.72 stood firm in early trade this week. Thanks to continued weakness, this brings light to a Fib cluster between 108.44 and 108.66 (blue), glued to the upper side of demand at 108.31-108.50 (note the area also holds lows highlighted on the daily scale around 108.36).

H1 timeframe:

Early hours on Wednesday dropped through 109 support and pencilled in lows a few pips ahead of demand at 108.60-108.71 (shares a connection with the H4 Fib cluster at 108.44-108.66). Subsequent action observed a 109 retest, which held as resistance.

RSI movement rebounded from oversold space, following the formation of an AB=CD pattern (black arrows). This led the value back to the 50.00 centreline, which formed resistance and informed traders that momentum faces southbound.

Observed levels:

Partly modified from previous analysis.

Having noted the monthly timeframe testing descending resistance-turned possible support, any selling may be short-lived. As such, overtaking lows around 108.36 on the daily scale, according to chart studies, is unlikely.

In light of where we’re coming from on the monthly timeframe, H1 demand at 108.60-108.71 is likely on the radar for traders, an area plotted just north of H4 demand at 108.31-108.50 (and shares space with the H4 Fib cluster at 108.44-108.66).

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 followed through to the upside (1.7 percent) and refreshed 2021 highs at 1.4241, levels not seen since 2018. Contained within February’s range, however, March snapped a five-month winning streak and formed what candlestick enthusiasts call an inside candle pattern (represents a short-term consolidation with low volatility). A breakout lower in subsequent months would generally be viewed as a bearish signal.

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

Daily timeframe:

Largely unchanged from previous analysis.

Sterling against the US dollar gathered traction Wednesday, though ended the session considerably off session peaks.

The technical arrangement present on the daily chart remains unchanged. Quasimodo support at 1.3609 is seen, a level connected with a 1.272% Fib expansion at 1.3617, as well as 1.618% and 1.272% Fib extension levels at 1.3614 and 1.3607, respectively.

With reference to trend, GBP/USD has been trending higher since early 2020.

The RSI failed to find grip north of the 50.00 centreline last week, though at the same time is reluctant to explore levels south of 40.00.

H4 timeframe:

Largely unchanged from previous analysis.

Action out of the H4 chart remains focussed on support at 1.3680, as well as trendline support-turned resistance, taken from the low 1.3670.

Additional areas to be cognisant of are 1.3852 resistance and Quasimodo support mentioned above on the daily timeframe at 1.3609.

H1 timeframe:

The 1.38 figure, surrounded by a 1.272% Fib expansion at 1.3809 and a 50.0% retracement level at 1.3793, delivered resistance on Wednesday and guided the currency pair back to 1.3750 support.

External levels to be aware of on the H1 scale are the 100-period simple moving average at 1.3740, and a demand-turned supply base residing at 1.3853-1.3869, sharing chart space with a number of Fib studies between 1.3870 and 1.3847.

Interestingly, RSI flow greeted trendline support, taken from the low 27.58, following an earlier rejection from overbought terrain.

Observed levels:

With higher timeframe levels showing limited support and resistance nearby, GBP/USD traders are likely monitoring 1.3750 support on the H1, along with 1.3809-1.3793 resistance.

Another area likely on the technical radar is H1 supply at 1.3853-1.3869. Not only does this base align with numerous Fib levels, the area also joins H4 resistance at 1.3852.

DISCLAIMER:

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USD/JPY Price Forecast – US Dollar Looking for Buyers

The US dollar has fallen initially against the Japanese yen during the trading session on Wednesday but looks as if it is finding a little bit of support exactly where you would expect it based upon previous trading action.

USD/JPY Video 15.04.21

After all, we have seen a lot of noise in this general vicinity, so it does make a certain amount of sense that traders would come back in and try to pick it up “on the cheap.” The market had gotten way ahead of itself, so a pullback to this area of consolidation made the most sense, and now it looks as if we may be able to start taking off again. If that is going to be the case, I believe that we will probably revisit the highs sooner rather than later.

Regardless of what happens next, I am not willing to sell this market, because quite frankly it is far too bullish from a longer-term standpoint. Ultimately, I think this is a market that will find its way back to the ¥111 level, possibly even all the way to the ¥110 level. Interest rate differentials between the two countries continue to be a major factor, so that cannot be stressed enough in this scenario. After the big move that we had previously seen, it does make quite a bit of sense that we would continue to see a lot of noise, but ultimately, I do think we are in a scenario that the market needed to calm down and find a little bit of stability, which is something that I think has happened over the last couple of weeks.

For a look at all of today’s economic events, check out our economic calendar.

Economic Data and Central Bank Commentary Keep the EUR and Greenback in Focus

Earlier in the Day:

It was a relatively busy start to the day on the economic calendar this morning. The Japanese Yen and the Aussie Dollar were in focus this morning, with the RBNZ also in action.

For the Japanese Yen

Core machinery orders were in focus this morning.

In February, core machinery orders slid by 8.5% month-on-month, following a 4.5% decline in January. Year-on-year, orders were down by 7.1%. In January, core machinery orders had been up by 1.5%.

Economists had forecast core machinery orders to increase by 2.8% in the month and to rise by 2.3% year-on-year.

The Japanese Yen moved from ¥108.927 to ¥108.861 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.18% to ¥108.86 against the U.S Dollar.

For the Kiwi Dollar

While there were no material stats to consider, the RBNZ delivered its April monetary policy decision this morning.

In line with market expectations, the RBNZ left the cash rate unchanged at 0.25%.

Salient points from the RBNZ Rate Statement included:

  • The global growth outlook has improved, though the recover in growth is uneven across countries.
  • COVID-19 mutations continue to provide uncertainty over the economic outlook.
  • Economic activity in NZ slowed over the summer before a rebound in domestic activity.
  • December quarter GDP was weaker than expected and more recent indicators suggest that momentum has reduced.
  • Members noted that supply chain disruptions could constrain economic domestic economic activity near-term.
  • Business credit growth and investment also remains subdued.
  • New government housing policies will likely dampen house price growth. It may take time, however, to see any implications on price inflation and employment.
  • Near-term price increases are likely and these will see headline inflation exceed 2% for a period. Price increases are likely to be temporary, however.
  • Employment is below its maximum sustainable level and expect employment to increase gradually.
  • Overall risks to the economic outlook remain balanced, supported by ongoing stimulatory fiscal and monetary policies.
  • The Committee agreed to maintain its current stimulatory monetary settings until it is confident that consumer price inflation will be sustained at the 2% per annum target midpoint, and that employment is at or above its maximum sustainable level.
  • A prolonged period of time is expected to pass before these conditions are met.
  • The Committee agreed that it was prepared to lower the Official Cash Rate if required.

The Kiwi Dollar moved from $0.70580 to $0.70556 in response to the rate statement. At the time of writing, the Kiwi Dollar up by 0.14% to $0.7063.

For the Aussie Dollar

Consumer confidence was in focus following business confidence figures on Tuesday.

In April, the Westpac Consumer Confidence Index rose by 6.2% to 118.8, its highest level since Aug-2010. In March, the index had risen by 2.6% to 111.8.

According to the latest Westpac Report,

  • Family finances vs a year ago jumped by 13.4% to 103.5, with family finances next 12-months up by 5.4% to 117.6.
  • Economic conditions next 12-months increased by 10.3% to 125.5, with conditions next 5-years up by 4.1% to 123.8.
  • Significantly, the economic conditions next 12-months was up 133.8% year-on-year.
  • The Unemployment Expectations Index rose by 5.6% to 118.4, however, with time to buy a dwelling falling by 7.9%.
  • Time to buy a major household item slipped by 0.2% in the month, while up 61.9% year-on-year.

The Aussie Dollar moved from $0.76455 to $0.76445 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.08% to $0.7647.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Industrial production figures for the Eurozone are due out along with finalized inflation figures for Spain.

Expect February industrial production figures to have a greater influence on the EUR.

On the monetary policy front, ECB President Lagarde could also move the dial in a scheduled speech later in the day.

At the time of writing, the EUR was up by 0.09% to $1.1959.

For the Pound

It’s a quieter day ahead on the economic calendar.

4th quarter labor productivity figures are due out later today. With the UK government easing COVID-19 restrictions, however, we don’t expect the numbers to have an impact.

Away from the economic calendar, expect COVID-19 news to influence, however.

At the time of writing, the Pound was up by 0.07 to $1.3759.

Across the Pond

It’s a relatively quiet day ahead on the economic calendar. Import and export price index figures are due out later today. We don’t expect too much influence from the numbers.

Any FOMC member commentary and chatter from Capitol Hill will need monitoring, however.

FED Chair Powell is due to speak and will garner plenty of interest late in the day.

At the time of writing, the Dollar Spot Index was down by 0.07% to 91.789.

For the Loonie

It’s a quiet day ahead on the economic calendar. There are no material stats from Canada to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of crude oil inventory numbers and market risk sentiment on the day.

At the time of writing, the Loonie was down by 0.06% to C$1.2542 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

April 14th 2021: Dollar Index Extends Bearish Presence South of 200-Day SMA Following Inflation Data

Charts provided by Trading View

EUR/USD:

Monthly timeframe:

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

March carved out a third consecutive loss, extending the 2021 retracement slide by 2.8 percent. Recent underperformance, as you can see, pulled EUR/USD into the upper range of demand at 1.1857/1.1352.

April’s 1.8 percent rebound thus far shifts attention to the possibility of fresh 2021 peaks and a test of ascending resistance (prior support – 1.1641). Extending lower, on the other hand, shines the technical spotlight on trendline resistance-turned support, taken from the high 1.6038.

Based on trend studies, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

Trading primarily as a function of USD weakness, EUR/USD movement adopted a bullish phase Tuesday and consequently recorded fresh multi-week peaks. Resistance at 1.1966 is next in line, with a break unmasking additional resistance at 1.2058.

The 200-day simple moving average continues to echo supportive structure, following an upside breach in the second half of last week.

Despite the 2021 retracement slide, trend studies reveal the pair has been higher since early 2020.

RSI analysis shows upside momentum continues to gather traction, after the value swept through trendline resistance (taken from the peak 75.97) and formed a bullish failure swing (a sign of a potential reversal). Resistance is now in sight at 60.30.

H4 timeframe:

Following 1.1870 support serving well since early last week, Quasimodo resistance at 1.1937 came under fire on Tuesday, movement emphasising bullish intent.

With 1.1937 potentially out of the picture, bullish bets may take aim at resistance from 1.1990.

H1 timeframe:

The 100-period simple moving average at 1.1895, once again, delivered dynamic support on Tuesday. This led to a one-sided advance north of 1.19 to supply at 1.1956/1.1935.

1.1974/1.1965 supply is next in the firing range should buyers maintain a bullish trajectory today. Traders, however, are also urged to pencil in the possibility of a 1.1919 support retest.

Thanks to recent upside, RSI movement rebounded from trendline support, taken from the low 20.50, and has made its way to within touching distance of overbought space and RSI resistance plotted at 78.97.

Observed levels:

The technical view from the monthly scale implies a bullish theme could develop, given we’re coming from demand at 1.1857/1.1352. However, buyers face daily resistance at 1.1966, closely shadowed by H4 resistance at 1.1990.

With the above in view, a short-term bullish scenario may materialise today, taking out H1 supply at 1.1956/1.1935 and testing H1 supply at 1.1974/1.1965. It is the latter zone that sellers could make an appearance from, given this area shares chart space with daily resistance at 1.1966. Any bullish moves north of here, nevertheless, buyers could reach for the key figure 1.20 (and H4 resistance at 1.1990).

AUD/USD:

Monthly timeframe:

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

February finished considerably off best levels, establishing what many candlestick fans call a shooting star pattern—a bearish signal found at peaks. What’s interesting was February also came within striking distance of trendline resistance (prior support – 0.4776 high), sheltered under supply from 0.8303/0.8082.

March subsequently erased 1.5% over the Month and probed February’s lows. Should follow-through selling develop, demand is in view at 0.7029/0.6664 (prior supply).

With respect to trend (despite the trendline resistance [1.0582] breach in July 2020), the primary downtrend (since mid-2011) remains in play until breaking 0.8135 (January high [2018]).

Daily timeframe:

Largely unchanged analysis from previous report.

Since 25th March, buyers and sellers have been squaring off around the 0.7563 February low, aided by a 1.272% Fib extension at 0.7545. Tuesday concluded in the shape of a bullish outside reversal (similar formation to a bullish engulfing pattern, though focuses on the range of the previous candle rather than the real body).

Resistance remains at 0.7817; a dip beneath 0.7563 brings light to demand from 0.7453/0.7384 (dovetailing closely with a 100% Fib expansion at 0.7465 and a 1.618% Fib extension at 0.7460). Technicians will also note the 200-day simple moving average circling nearby at 0.7408.

Trend studies reveal the unit has been higher since early 2020.

As for the RSI oscillator, the value remains reinforced off channel support, taken from the low 43.70, and nears the underside of 50.00.

H4 timeframe:

Declining US Treasury yields pressuring the buck lower Tuesday provided AUD/USD support, with enough force to bring light to trendline resistance, extended from the high 0.8007.

Also of technical importance is resistance at 0.7668, followed by supply at 0.7696/0.7715 and a 50.0% retracement at 0.7689.

Any decisive downside shines the technical spotlight on Quasimodo support at 0.7529, a level joined closely by a trendline resistance-turned support, taken from the high 0.7805.

H1 timeframe:

Heading into the early hours of US trading Tuesday, price movement speared through 0.76 to shake hands with a Fib cluster around 0.7586. Strong bids soaking up sell-stops south of 0.76 lifted the currency pair north of the 100-period simple moving average to 0.7650ish, adding 0.3 percent on the day.

Limited (obvious) resistance shifts technical interest to the 0.77 figure, a psychological base sheltered under supply drawn from 0.7716/0.7707 (an important decision point to initially push below 0.77).

Action out of the RSI oscillator reveals the value testing space just south of overbought territory, threatening moves to resistance at 80.85.

Observed levels:

Largely unchanged analysis from previous report.

From the bigger picture, the lack of buying interest from the 0.7563 February low on the daily scale may be due to monthly price pencilling in a bearish candlestick formation in February ahead of notable structure. This indicates sellers could eventually topple 0.7563 and challenge daily demand at 0.7453/0.7384.

In conjunction with higher timeframes, the H4 trendline resistance as well as H4 resistance at 0.7668 may be on the radar for short-term sellers today.

Should the unit spike to 0.77 on the H1, however, sellers may also show interest here as the psychological level aligns with H4 supply at 0.7696/0.7715.

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.

April, currently down 1.5 percent, is seen retesting the breached descending resistance, movement that may entice bullish flow. With respect to long-term upside targets, supply at 126.10/122.66 calls for attention.

Daily timeframe:

The US dollar notched up a second consecutive decline against the Japanese yen Tuesday, in line with US Treasury yields also dipping lower (the benchmark 10-year US Treasury yield ended lower by nearly 3 percent).

Despite supply at 110.94/110.29 limiting upside since the beginning of April, the monthly timeframe testing descending resistance-turned support places a question mark on further selling. Therefore, technically speaking, the collection of lows around 108.36ish (green oval) could limit downside moves.

Structure beyond said lows, however, shows demand coming in at 107.58/106.85 alongside trendline support, etched from the low 102.59.

In terms of trend on the daily scale, we have been decisively higher since early 2021.

RSI action journeyed beneath support at 57.00 in recent trading, implying that momentum remains firmly to the downside for the time being.

H4 timeframe:

Supply at 109.97/109.72 has stood firm in early trade this week, throwing light on a 78.6% Fib level at 108.95. Breaking south of here also shines light on demand at 108.31/108.50, an area not only joined by a Fib cluster between 108.44 and 108.66 (blue), it also holds lows highlighted on the daily scale around 108.36.

H1 timeframe:

Any USD/JPY upside was swiftly capped by the 100-period simple moving average on Tuesday, currently circling 109.47. Technical elements now show demand plotted at 108.86/108.98, with subsequent bearish flow highlighting demand at 108.60/108.71.

In addition to price action, RSI flow dipped a toe in oversold waters in recent hours, establishing an AB=CD formation (black arrows).

Observed levels:

Partly modified from previous analysis.

Having noted the monthly timeframe testing descending resistance-turned possible support, any selling may be short-lived. As such, overtaking lows around 108.36 on the daily scale, according to chart studies, is unlikely.

In light of where we’re coming from on the monthly timeframe, the 78.6% Fib level on the H4 at 108.95 and H1 demand at 108.86/108.98 could deliver a platform for buyers to work with.

H1 demand at 108.60/108.71 is also likely on the radar for traders, an area plotted just north of H4 demand at 108.31/108.50 (and shares space with the H4 Fib cluster at 108.44/108.66).

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 followed through to the upside (1.7 percent) and refreshed 2021 highs at 1.4241, levels not seen since 2018. Contained within February’s range, however, March snapped a five-month winning streak and formed what candlestick enthusiasts call an inside candle pattern (represents a short-term consolidation with low volatility). A breakout lower in subsequent months would generally be viewed as a bearish signal.

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

Daily timeframe:

Partly modified from previous analysis.

Sterling wrapped up Tuesday off worst levels against a broadly weaker greenback; GBP/USD has staged a moderate comeback so far this week off March 25th Lows at 1.3670.

The technical arrangement present on the daily chart displays a Quasimodo support at 1.3609, a level connected with a 1.272% Fib expansion at 1.3617, and 1.618% as well as 1.272% Fib extension levels at 1.3614 and 1.3607, respectively.

With reference to trend, GBP/USD has been trending higher since early 2020.

The RSI failed to find acceptance north of the 50.00 centreline last week, though at the same time is reluctant to explore levels south of 40.00.

H4 timeframe:

Shorter-term flow on the H4 chart has support in play at 1.3680, delivering a floor to work with on Monday. Upside attempts have so far been limited by a 38.2% Fib level at 1.3763, as well as trendline support-turned resistance, taken from the low 1.3670.

External areas to be cognisant of are 1.3852 resistance and the Quasimodo support mentioned above on the daily timeframe at 1.3609.

H1 timeframe:

1.37 welcomed price action on Tuesday, fuelling a healthy bid into the US session (aided by RSI trendline support, taken from the low 27.58). As you can see, this elevated GBP/USD above the 100-period simple moving average to test the mettle of 1.3750 resistance.

Territory north of 1.3750 highlights resistance around the 1.38 figure, surrounded by a 1.272% Fib expansion at 1.3809 and a 50.0% retracement level at 1.3793. Beneath 1.37, the technical radar points to support at 1.3653.

Observed levels:

The daily timeframe’s Quasimodo support at 1.3609 is likely to remain on the watchlist for many traders. Not only is this considered stable structure, the neighbouring Fib confluence reinforces its technical presence.

Across the page on the lower timeframes, H4 is attempting to overthrow a 38.2% Fib level at 1.3763, while H1 is battling 1.3750 resistance. A firm H1 close above 1.3750 may be enough to tempt breakout buying to around 1.38. Equally interesting, this psychological area may be sufficient to hold back buyers, given the level shares space with H1 Fib levels and also unites with H4 trendline support-turned resistance.

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