20/08/2021
Friday’s Pre-Session Technical Outlook – 20th August
Chief Market Technician
August 20, 2021
EUR/USD:
Daily timeframe –
EUR/USD recently pushed through support at 1.1710, which reveals support to watch around 1.1613. If we get back above 1.1710, the 50-day SMA (1.1846) is seen as a possible resistance.
[Underlined in previous text] The trend in this market shows the pair has been involved in a technical uptrend since 2020. 2021, however, has struggled to maintain the bullish tone, and is offering directionless trading now. The 50-day SMA also crossed under the 200-day SMA (1.2004) in late July.
[Underlined in previous text] The MACD, since 9th August, has been merging with its signal line (9-day EMA of the MACD value). Moving above the signal line could hit the centreline, while lower puts support at -0.00817.
H1 timeframe –
The price on Thursday retested 1.1700 and has formed resistance. This appears to have been helped by the 20-hour SMA (1.1690). If we break to fresh lows, support is at 1.1624. If the price moves back above 1.1700, traders will look at 1.1723 as resistance.
The RSI is finding it troublesome to breach the 50.00 line coming from the lower range. This is bearish for now.
Analyst perspective –
As daily support at 1.1710 is now taken out, and the H1 timeframe is seen reacting from 1.1700 as a resistance, this could deliver fresh short-term lows.
H1 could target support at 1.1624 and daily price to support at 1.1613.
GBP/USD:
Daily timeframe –
After 1.3909/1.3855 was retested as resistance and price dropped through the 200-day SMA (1.3781), we saw Thursday move lower. This could have the 1.3572 low come into the picture and also support at 1.3486.
The pair has been entrenched within an uptrend since early 2020. But since late February, the market has been adrift.
The MACD formed a bearish signal line crossover in recent days, positioned just below the centreline (12-day EMA < 26-day EMA).
H1 timeframe –
After the price retested below 1.3700 (currently joining with the 20-hour SMA), we moved lower and formed fresh lows. This is now looking at pushing price to 1.3600.
The RSI is deciding whether to exit oversold (30.00), following bullish divergence.
Analyst perspective –
This is a bearish market it seems. H1 could push to 1.3600, which may even see the 1.3572 low come through (visible clearly on the daily timeframe).
AUD/USD:
Daily timeframe –
Price moving lower from resistance at 0.7345/0.7447 has taken out support at 0.7244 and shown we could drop to support at 0.6961/0.7043.
The 50-day SMA (0.7439) crossed below the 200-day SMA (0.7605) in late July, which is a bearish signal for many traders.
[Underlined in previous text] Despite trending higher in 2020, 2021 has so far been disappointing.
The MACD formed a bearish signal line crossover this week and is nearing support at -0.0060.
H1 timeframe –
Support is active at 0.7156, but not really offering much to buyers at this point. Above is the 20-hour SMA (0.7188) and 0.7200. Below is 0.7100.
The RSI is playing with the oversold (30.00) range, currently trying to get back above the area which could be looked at as a positive sign.
Analyst perspective –
The room to move lower on the daily timeframe to test support at 0.6961/0.7043 will place any buying at H1 support at 0.7156 in a fragile position. As a result, we could view the H1 price drop through 0.7156 to test 0.7100.
USD/JPY:
Daily timeframe –
The 50-day SMA (110.17) has been retested on Thursday and held as a resistance. Below, support is at 108.41, as well as a 78.6% Fib level at 108.35. Above, resistance is at 111.24.
[Underlined in previous text] Price has been trending higher since 2021.
[Underlined in previous text] The MACD recently formed a bearish signal line crossover, and also dropped back under the centreline (12-day EMA < 26-day EMA).
H1 timeframe –
Support at 109.61 and the 100-hour SMA (109.57) offered buyers something to work with on Thursday. Right now, the 20-hour SMA (109.85) is seen near and also the 110.00 level. Below 109.61, we can also see support at 109.06/21.
The RSI is now above 50.00 after coming from lows at 37.50. This could push the indicator to test overbought (70.00).
Analyst perspective –
Sellers could come in between 110.00 and the 20-hour SMA (109.85) and look to retest H1 support at 109.61. This is because the daily timeframe is also coming from the 50-day SMA (110.17).
XAU/USD:
Daily timeframe –
Price has not been doing much since Tuesday, fluctuating modestly under the 50-day SMA ($1,795). Below, support is at $1,754. We can also see the 50-day SMA recently crossed below the 200-day SMA ($1,812).
[Underlined in previous text] Although the price of the precious metal has been actively trending higher since mid-2018, August 2020 saw a top form and subsequent declines thereafter.
The MACD recently turned off -15.646, and formed a bullish signal line crossover. We are still below the centreline, however (12-day EMA < 26-day EMA). Support is seen at -25.524.
H1 timeframe –
Recent activity put the price of gold back under the 20/100-hour SMAs ($1.783), which opens things back to support at $1,750/61. Above the SMAs, we can see resistance at $1,795.
The RSI is below 50.00, with a possible drop into oversold (30.00) occurring today.
Analyst perspective –
H1 moving below the 20/100-hour SMAs ($1.783) puts a possible move to H1 support at $1,750/61.
The above is strengthened by the daily timeframe rounding off below the 50-day SMA ($1,795).
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