Off 0.69 we could be heading for a H1 rising wedge break

25 giu 2020

Monthly timeframe:

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

May’s extension, as well as June’s follow-through, has supply at 0.7029/0.6664 echoing a somewhat vulnerable tone at the moment, despite the base benefitting from additional resistance by way of a long-term trendline formation (1.0582).

Regarding the market’s primary trend, a series of lower lows and lower highs have been present since mid-2011.

Daily timeframe:

Partially altered from previous analysis -

Since June 11 smothered support at 0.6931, the base has proved reasonably worthy resistance, with Wednesday swinging lower from the base and Thursday offering a stationary presence.

In case of a break to the upside here, two trendline resistances inhabit territory close by (prior supports – 0.6744/0.6671). Support at 0.6755 also remains in position to the downside, with a break throwing light on the 200-day simple moving average at 0.6664, a dynamic value in the process of flattening, following months of drifting lower.

H4 timeframe:

Brought forward from previous analysis -

Wednesday’s tumble proposes the possibility of a double-top pattern off 0.6977, with a neckline formed at 0.6807 (blue arrows).

Breaking the neckline, however, entails overpowering demand at 0.6773/0.6814, a familiar area boasting a connection with a 38.2% Fib level at 0.6808.

H1 timeframe:

Heading into London trade Thursday, after revisiting 0.6850, the H1 candles began chalking up a possible rising wedge pattern between 0.6847/0.6888.

The 100-period simple moving average , currently at 0.6894, may be viewed as the next resistance on the H1 timeframe, circling close by the 0.69 level. Combined, these levels could be adequate enough to welcome a move lower, one that penetrates the lower limit of the current rising wedge .

Support targets outside of the aforesaid pattern can be seen at 0.6850, closely intersecting with two trendline supports (0.6976/0.6776).

Structures of Interest:

Combined, monthly supply at 0.7029/0.6664, daily resistance at 0.6931 and room for H4 to drop into demand at 0.6773/0.6814 could swing prices lower from 0.69 today, breaching the H1 rising wedge pattern.