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December 8th 2020: DXY off Best Levels Around 91.00

December 8th 2020: DXY off Best Levels Around 91.00, FP Markets

EUR/USD:

Monthly timeframe:

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

Following the break of long-term trendline resistance (1.6038) in July, and subsequent break of supply from 1.1857/1.1352 in August, a modest correction surfaced. However, with buyers making an entrance in November and December trading higher by 1.6 percent, this argues additional upside may be on the horizon, with ascending resistance (prior support – 1.1641) perhaps targeted.

The primary downtrend, nevertheless, remains unbroken until 1.2555 is engulfed (Feb high [2018]).

Daily timeframe:

Modified from previous analysis –

In tandem with monthly buyers, daily activity squeezed through the upper perimeter of a descending wedge pattern (correction) between 1.2011 and 1.1612 (some may interpret this arrangement as a descending triangle pattern) heading into the final rounds of November with December also overrunning resistance at 1.2095.

Although shaping two shooting star patterns into the second half of last week, sellers failed to navigate space below 1.2095, a level now acting as support. A recovery here directs attention to the descending wedge pattern’s take-profit target at 1.2309 (yellow).

RSI fans, however, will note the value recently crossed paths with overbought space and is on track to exit the area.

H4 timeframe:

Supply at 1.2200/1.2170 made a show last week, an area extended from April 2018. Monday, following an intraday slump to the 38.2% Fib level at 1.2080, also moulded a shooting star just ahead of the aforesaid area.

Demand at 1.2040/1.2065 also merits attention on this timeframe, an area sharing space with a 127.2% Fib projection at 1.2052 and a 50.0% level at 1.2050.

H1 timeframe:

Yesterday’s moderate decline, which recently pulled H1 under its 100-period simple moving average at 1.2117, elbowed demand at 1.2060/1.2076 and an AB=CD correction into the range of vision. Traders will note that in order to reach this area, the 1.21 level must be taken out.

The RSI voyaged above 50.00 on Monday, yet struggled to find acceptance north of the mid-way point and consequently retreated to the 40.00s area.

Observed levels:

H1 demand at 1.2060/1.2076 is likely to stir interest today if the area puts in an appearance. Glued to the upper rim of H4 demand at 1.2040/1.2065, as well as in line with monthly direction and also within close range of daily support at 1.2095, the H1 demand area communicates reasonably healthy confluence.

In addition to the above, liquidity (sell-stops) beneath the 1.21 level may also tempt buying.

December 8th 2020: DXY off Best Levels Around 91.00, FP Markets

AUD/USD:

Monthly timeframe:

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

Following a mild correction that addressed the upper border of demand at 0.7029/0.6664 (prior supply), buyers have so far responded well. Up by 4.5 percent in November, with December also trading higher by 1.1 percent, buyers appear free to explore as far north as 0.8303/0.8082 in the coming months, a supply zone aligning closely with trendline resistance (prior support – 0.4776).

In terms of trend, the primary downtrend (since mid-2011) remains south until breaking 0.8135 (January high [2018]).

Daily timeframe:

Modified from previous analysis –

Supply at 0.7453/0.7384 remains under attack as Monday wraps up considerably off worst levels.

With the trend on the daily timeframe depicting a northerly course since March, this places a question mark on the aforesaid supply. Absorbing the latter helps confirm the current trend and throws light on supply from 0.7587/0.7528.

The RSI indicator continues to hover beneath overbought conditions, following the removal of 52.00 resistance at the beginning of November.

H4 timeframe:

Modified from previous analysis –

Following an early retest at the upper boundary of an ascending triangle from 0.7340 last week, buyers took the currency pair to fresh yearly peaks yesterday.

Demand at 0.7398/0.7420 is also now in the mix after the pair modestly pulled back into the close.

Above, crosshairs are likely directed towards 0.7463, the ascending triangle take-profit target (pink).

H1 timeframe:

0.7450 continues to serve as resistance, a horizontal level fixed within the upper range of daily supply at 0.7453/0.7384 and also aligning with trendline resistance (prior support) on the RSI.

Demand at 0.7391/0.7401 may be a location of interest, buttoned to the lower side of H4 demand at 0.7398/0.7420 and aligning with the 0.74 level.

Observed levels:

With monthly price calling for higher levels, and daily supply from 0.7453/0.7384 currently in a fragile state, a test of H1 demand at 0.7391/0.7401 may spark interest.

December 8th 2020: DXY off Best Levels Around 91.00, FP Markets

USD/JPY:

Monthly timeframe:

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

Since kicking off 2017, USD/JPY has been carving out a descending triangle pattern between 118.66/104.62.

November, as you can see, worked with the lower edge of the aforesaid pattern and finished the month down by 0.3 percent – a third successive monthly loss.

104.62 ceding ground shines light on demand from 96.41/100.81, followed by trendline support (76.15) and the descending triangle’s take-profit level at 91.04 (red).

Daily timeframe:

Brought forward from previous analysis –

Since November 20, price movement on the daily chart has offered a somewhat muted stance.

Technical levels, therefore, remain unchanged.

Supply from 106.33/105.78 and trendline resistance (111.68) are prominent areas north of price.

Light falls on demand at 100.68/101.85 (fixed to the upper base of monthly demand and drawn from September 2016) if sellers make a push.

RSI enthusiasts will note the unit has remained under 57.00 resistance since July.

H4 timeframe:

Brought forward from previous analysis –

Support at 103.70 made its presence known again last Thursday, arranged just ahead of demand from 103.04/103.58, extended from March 2020. Traders will also note resistance is seen at 104.73.

Having seen both support and resistance welcome at least two consecutive tests, the H4 chart is considered range bound for the time being.

H1 timeframe:

The combination of a 161.8% Fib projection at 104.20 and 50.0% level at 104.21, together with the 100-period simple moving average at 104.20, proved effective resistance on Monday.

Despite considerable effort, buyers found a lack of grip above 104.20 and slumped to intraday lows at 103.92, testing the mettle of psychological support at 104.00. As we can see, 104 remains on board as we move into Asia Pac hours.

In terms of the RSI indicator, the value is drifting just beneath the 50.00 level, down from peaks at 64.00.

Observed levels:

Modified from previous analysis –

Monthly price appearing to be on the verge of breaching descending triangle support at 104.62 continues to underline a relatively weak market.

The above, as well as the lack of buying on Monday, implies that buyers off 104 on the H1 may be thin today. A H1 close below 104 could prompt a bearish scene back to H4 support at 103.70, and H1 support from 103.60.

December 8th 2020: DXY off Best Levels Around 91.00, FP Markets

GBP/USD:

Monthly timeframe:

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

November trading higher by 2.9 percent and December currently higher by 0.3 percent recently stirred trendline resistance (2.1161).

In terms of trend, the primary trend has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way – April high 2018.

Daily timeframe:

Modified from previous analysis –

Since crossing paths with demand at 1.2645/1.2773 and the 200-day simple moving average in late September, GBP/USD has displayed a gradual interest to the upside and generated an AB=CD pullback concluding at 1.3392.

With monthly trendline resistance making an entrance and daily supply also recently joining the fight at 1.3622/1.3467, sellers may eventually take the lead despite Monday finishing off session lows.

RSI followers will also see the line is beginning to round ahead of overbought territory, currently navigating space below 60.00.

H4 timeframe:

Monday’s downside, triggered amid Brexit headlines, whipsawed through demand at 1.3240/1.3273 and forged a low ahead of support priced in at 1.3182.

As you can see, the day finished welcoming recovery gains into resistance from 1.3396. Above, traders will see resistance plotted at 1.3483.

H1 timeframe:

Although slumping to lows just ahead of the 1.32 level Monday, in line with the RSI nosediving into oversold waters and forming an AB=CD correction, buyers made a strong comeback heading into US trading.

Buyers recaptured 1.33 to the upside and swiftly retested the latter as support by way of a hammer pattern and eventually elevated towards the 1.34 level and aligning 100-period simple moving average (so far has held buyers back).

Observed levels:

Modified from previous analysis –

Monthly price flirting with trendline resistance, as well as daily supply stepping forward last week at 1.3622/1.3467, communicates a bearish vibe.

Although the immediate trend faces higher on the daily timeframe, the bearish structure and monthly downtrend suggests sellers still have the advantage.

In light of the above, the 1.34 reaction is unsurprising as the round number also brought with it additional confluence: the 100-period simple moving average and H4 resistance found at 1.3396. This implies sellers could continue to discover lower levels, perhaps taking aim at the 1.33 region.

December 8th 2020: DXY off Best Levels Around 91.00, FP Markets

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  • December 8th 2020: DXY off Best Levels Around 91.00, FP Markets
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