Potential for modest rally on EUR/USD
EUR/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
March, evident from the monthly chart, left behind a long-legged doji indecision candle, with extremes crossing paths with heavyweight demand-turned supply at 1.1857/1.1352 and demand at 1.0488/1.0912.
As we head into the early stages of April, the technical foundation has price rangebound between the two aforementioned price structures; notably, however, April’s candle is 2% lower, testing the upper boundary of 1.0488/1.0912.
The primary downtrend remains in motion, trading lower since 2008 and exhibiting clear lower peaks and troughs.
Daily timeframe:
Europe’s single currency recorded its fifth consecutive losing day against the greenback Friday, extending its position south of the 200-day SMA at 1.1071 and clearing demand at 1.0925/1.0864.
Friday’s close, according to chart structure, may have liberated sellers, providing a basis for price to address demand at 1.0526/1.0638, an area extended from March 2017. Be that as it may, traders are urged to take into account where the DXY is currently positioned: a few points ahead of supply at 101.79/101.00 (see above), therefore EUR/USD could rebound ahead of the said demand.
H4 timeframe:
As we head into the first full week of April, recent movement left behind a possible 5-wave structure, based on Elliot Wave Theory. Traditional definition of a motive wave is a 5-wave move in the same direction as the trend of one larger degree. Both the daily and monthly timeframe are entrenched within downtrends at present. The 5-wave sequence, going on the basis wave 1 will equate to wave 5, given wave 3 is somewhat extended, could see support develop ahead of demand at 1.0602/1.0630 with Elliot Wave technicians possibly expecting an ABC correction.
In addition, wave 4 may terminate around newly formed supply at 1.0867/1.0839. In the event we violate this area and approach supply at 1.1044/1.0966, expect sellers to potentially make a show here.
H1 timeframe:
According to the US Bureau of Labour Statistics Friday, total non-farm payroll employment fell by 701,000 in March, and the unemployment rate increased by 0.9% to 4.4%. The changes in these measures reflect the effects of the coronavirus (COVID-19) and efforts to contain it.
In another release, US economic activity in the non-manufacturing sector grew in March for the 122nd consecutive month, according to the nation's purchasing and supply executives. The institute for Supply Management (ISM) noted the non-manufacturing index registered 52.5 percent, 4.8 percentage points lower than the February reading of 57.3 percent. This represents continued growth in the non-manufacturing sector, at a slower rate.
Both metrics provided little in the way of fresh impetus; the H1 candles put in a mild bottom around the 1.08 neighbourhood, off channel support (1.0926). Candlestick analysis also reveals a ‘shooting star’ Japanese candlestick formation emerged into the closing hours Friday, a few points above the 1.08 handle.
Demand-turned supply at 1.0889/1.0937 also remains a feature on this timeframe (aligns with the 100-period SMA, the 1.09 RN and channel resistance [1.1144]), while demand south of 1.08 is limited until reaching possible support off 1.07.
Structures of Interest:
Longer term:
April has price trading within monthly demand at 1.0488/1.0912, suggesting a recovery could be on the cards this week. This is further bolstered by the US dollar index revealing nearby daily supply at 101.79/101.00.
Shorter term:
Short sales based on the H1 ‘shooting star’ pattern may be hindered off 1.08 serving as support. A rally from the said RN, based on higher-timeframe flow, is thus a possibility, though expect resistance around 1.0850, knowing the level inhabits H4 supply 1.0867/1.0839.
Continuation above 1.0850 may be drawn to the H1 demand-turned supply at 1.0889/1.0937 which holds 1.09, the 100-period SMA and channel resistance. Also note the H1 base is glued to the top edge of daily supply at 1.0925/1.0864.
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
March, evident from the monthly chart, left behind a long-legged doji indecision candle, with extremes crossing paths with heavyweight demand-turned supply at 1.1857/1.1352 and demand at 1.0488/1.0912.
As we head into the early stages of April, the technical foundation has price rangebound between the two aforementioned price structures; notably, however, April’s candle is 2% lower, testing the upper boundary of 1.0488/1.0912.
The primary downtrend remains in motion, trading lower since 2008 and exhibiting clear lower peaks and troughs.
Daily timeframe:
Europe’s single currency recorded its fifth consecutive losing day against the greenback Friday, extending its position south of the 200-day SMA at 1.1071 and clearing demand at 1.0925/1.0864.
Friday’s close, according to chart structure, may have liberated sellers, providing a basis for price to address demand at 1.0526/1.0638, an area extended from March 2017. Be that as it may, traders are urged to take into account where the DXY is currently positioned: a few points ahead of supply at 101.79/101.00 (see above), therefore EUR/USD could rebound ahead of the said demand.
H4 timeframe:
As we head into the first full week of April, recent movement left behind a possible 5-wave structure, based on Elliot Wave Theory. Traditional definition of a motive wave is a 5-wave move in the same direction as the trend of one larger degree. Both the daily and monthly timeframe are entrenched within downtrends at present. The 5-wave sequence, going on the basis wave 1 will equate to wave 5, given wave 3 is somewhat extended, could see support develop ahead of demand at 1.0602/1.0630 with Elliot Wave technicians possibly expecting an ABC correction.
In addition, wave 4 may terminate around newly formed supply at 1.0867/1.0839. In the event we violate this area and approach supply at 1.1044/1.0966, expect sellers to potentially make a show here.
H1 timeframe:
According to the US Bureau of Labour Statistics Friday, total non-farm payroll employment fell by 701,000 in March, and the unemployment rate increased by 0.9% to 4.4%. The changes in these measures reflect the effects of the coronavirus (COVID-19) and efforts to contain it.
In another release, US economic activity in the non-manufacturing sector grew in March for the 122nd consecutive month, according to the nation's purchasing and supply executives. The institute for Supply Management (ISM) noted the non-manufacturing index registered 52.5 percent, 4.8 percentage points lower than the February reading of 57.3 percent. This represents continued growth in the non-manufacturing sector, at a slower rate.
Both metrics provided little in the way of fresh impetus; the H1 candles put in a mild bottom around the 1.08 neighbourhood, off channel support (1.0926). Candlestick analysis also reveals a ‘shooting star’ Japanese candlestick formation emerged into the closing hours Friday, a few points above the 1.08 handle.
Demand-turned supply at 1.0889/1.0937 also remains a feature on this timeframe (aligns with the 100-period SMA, the 1.09 RN and channel resistance [1.1144]), while demand south of 1.08 is limited until reaching possible support off 1.07.
Structures of Interest:
Longer term:
April has price trading within monthly demand at 1.0488/1.0912, suggesting a recovery could be on the cards this week. This is further bolstered by the US dollar index revealing nearby daily supply at 101.79/101.00.
Shorter term:
Short sales based on the H1 ‘shooting star’ pattern may be hindered off 1.08 serving as support. A rally from the said RN, based on higher-timeframe flow, is thus a possibility, though expect resistance around 1.0850, knowing the level inhabits H4 supply 1.0867/1.0839.
Continuation above 1.0850 may be drawn to the H1 demand-turned supply at 1.0889/1.0937 which holds 1.09, the 100-period SMA and channel resistance. Also note the H1 base is glued to the top edge of daily supply at 1.0925/1.0864.
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