February 24th 2021: Dollar Stabilises After Powell to End Mostly Unchanged; Pound Clocks Three-Year High

February 24th 2021: Dollar Stabilises After Powell to End Mostly Unchanged; Pound Clocks Three-Year High, FP Markets

Note—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)

February, as you can see, remains considerably off worst levels and recently entered positive territory, trading 0.1 percent higher. Closing the month out at current prices, in the form of a hammer candle (bullish signal at troughs), is likely to excite candlestick enthusiasts.

Downstream, 1.1857/1.1352 represents demand; northbound, however, shines light on ascending resistance (prior support – 1.1641).

In terms of trend, the primary uptrend has been in play since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

The USD, as measured by the US dollar index, staged a modest recovery Tuesday, snapping a three-day bearish phase. This witnessed EUR/USD fade session peaks and produce a well-known candlestick formation, commonly labelled as a shooting star—a bearish pattern.

1.2190 tops continue to represent immediate resistance, with a break uncovering Quasimodo resistance from 1.2278. Any downside attempts will likely zero in on demand from 1.1923/1.2001, which happens to house a support at 1.1965—a previous Quasimodo resistance.

RSI action remains north of the 50.00 centreline, within striking distance of resistance at 60.30.

H4 timeframe:

Resistance at 1.2179 proved an effective base once again on Tuesday, capping upside. Bearish bets, although appearing to be drying up, could eventually direct price action towards trendline support, extended from the low 1.1952.

North of 1.2179, we have nearby Quasimodo resistance at 1.2200 and another resistance at 1.2214.

H1 timeframe:

Despite an early slump heading into London on Tuesday, volatility thinned considerably for the remainder of the day, ranging between 1.2166 and 1.2134.

Trendline support, extended from the low 1.2036, is not far off, with a breach shining the technical spotlight on additional trendline support, coming in from the low 1.2023. Note that in between the aforesaid trendlines we can also see the 100-period simple moving average lurking around 1.2112.

Out of the RSI indicator, the value is currently entrenched within the walls of two converging trendlines, forming what many may recognise as a bearish pennant pattern.

Observed levels:

With monthly price displaying scope to scale higher, alongside H4 sellers showing little interest off resistance at 1.2179, targeted supports today may be the H1 trendlines from lows 1.2036 and 1.2023.

February 24th 2021: Dollar Stabilises After Powell to End Mostly Unchanged; Pound Clocks Three-Year High, FP Markets

AUD/USD:

Monthly timeframe:

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

Up by 3.6 percent, February is on track to conclude in the shape of a clear-cut bullish engulfing candle. Also technically appealing is the pair closing in on 0.8303/0.8082—a supply zone aligning closely with trendline resistance (prior support – 0.4776).

In the context of 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 –

Despite AUD/USD taking a breather yesterday and establishing an indecision candle, the pair remains testing the mettle of supply from 0.7937/0.7890. Therefore, the possibility of additional upside unfolding today is still there, targeting supply coming in from 0.8045/0.7985 (located south of monthly supply at 0.8303/0.8082).

Any corrections have 0.7726/0.7806 demand in sight, fixed above trendline support, an ascending level drawn from the low 0.5506.

H4 timeframe:

Retracing from fresh 2021 highs, Tuesday reconnected with support at 0.7897 (a prior Quasimodo resistance level).

With buyers and sellers currently battling for position around the aforesaid support level, in a market trending higher since 2020, Quasimodo resistance seen at 0.7966 is likely to be on the radar for many technical traders today.

H1 timeframe:

Whipsawing through the 0.79 figure to within touching distance of demand at 0.7857/0.7877, price went forward and reclaimed 0.79+ status heading into the US session on Tuesday.

Forming a position north of 0.79 today could have buyers invade Tuesday’s peak at 0.7934, with subsequent upside to possibly reach for 0.7950.

In line with the above, the RSI is rebounding from the 50.00 centreline.

Observed levels:

Largely unchanged from previous analysis –

The monthly timeframe continues charging towards supply at 0.8303/0.8082, implying a push above supply at 0.7937/0.7890 to supply at 0.8045/0.7985 on the daily scale may be on the menu.

Short term remains positive for buyers, with a 0.79 retest (H1) holding firm, bolstered by H4 support priced in at 0.7897.

February 24th 2021: Dollar Stabilises After Powell to End Mostly Unchanged; Pound Clocks Three-Year High, FP Markets

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, buyers have attempted to find some grip in February, up by 0.6 percent.

Descending resistance (not considered traditional trendline resistance) governs the spotlight to the upside, etched from the high 118.66, whereas support inhabits 101.70.

Daily timeframe:

Partly modified from previous analysis –

Snapping a four-day losing streak, boosted on USD strength, USD/JPY is on the brink of retesting the 200-day simple moving average at 105.48.

February 10th trough at 104.40 calls for attention to the downside, arranged just ahead of demand at 103.56/103.93. This is an interesting zone, given it was within this area a decision was made to generate seven back-to-back bullish days and penetrate a number of local peaks.

With respect to the RSI indicator, the value is flirting with support at 57.00.

H4 timeframe:

Trendline support, taken from the low 102.59, fixed above demand at 104.67/104.81, are prime areas to be watchful of to the downside on the H4 chart.

A pop above Monday’s high at 105.84, on the other hand, throws light on resistance at 106.11—October 7 peak.

H1 timeframe:

Resistance at 105.40 made its way on the scene Tuesday—a previous Quasimodo support base—and served short-term sellers well. Upstream, technical eyes are likely fixed on the 100-period simple moving average around 105.47, with subsequent buying to possibly draw in Quasimodo resistance at 107.73.

105 support also remains a point of interest on the H1 scale, fixed just north of Quasimodo support at 104.91.

Observed levels:

Long term, sellers appear in control at the moment, south of the 200-day simple moving average, targeting February 10th trough at 104.40 (daily timeframe—see above). This, of course, could weigh on buying derived from January’s bullish engulfing candle.

Short term, H1 is sandwiched amidst resistance at 105.40 and the 105 figure, therefore intraday traders may be drawn to this region today. Though be aware a whipsaw above 105.40 to the 100-period simple moving average on the H1 (105.47) and the 200-day simple moving average on the daily (105.48) could also take shape.

February 24th 2021: Dollar Stabilises After Powell to End Mostly Unchanged; Pound Clocks Three-Year High, FP Markets

GBP/USD:

Monthly timeframe:

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

Following December’s 2.5 percent advance—movement that stirred major trendline resistance (2.1161)—February has refreshed 2021 highs at 1.4116, levels not seen for three years.

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

In effect, 1.4376 represents the next upside objective on the monthly chart.

Daily timeframe:

Partly modified from previous analysis –

Sterling finished higher Tuesday, further extending a bullish presence north of support at 1.4011 and inching closer to 1.4250 Quasimodo resistance.

The RSI continues to trek overbought terrain, reaching highs of 76.20 yesterday. Bear in mind, the indicator can remain overbought for prolonged periods in trending environments.

H4 timeframe:

Supply drawn from 1.4111/1.4091 made an entrance on Tuesday, yet was unable to prompt much in terms of bearish flow. Northbound, technical action notes channel resistance, pencilled in from the high 1.3855, closely followed by resistance plotted at 1.4154.

H1 timeframe:

Bolstered on UK PM Johnson setting out a schedule for easing lockdown, we witnessed short-term flow scale above the 1.41 figure and in recent hours retest the latter in the shape of a hammer candle—often interpreted as a bullish signal.

Although RSI bearish divergence is in view, the 1.41 retest could welcome a bullish scenario today, targeting 1.4150 resistance.

Observed levels:

Monthly price taking in the view north of trendline resistance, together with room for daily buyers to invade resistance at 1.4250 and H4 supply at 1.4111/1.4091 displaying a fragile tone, could have H1 buyers lift the currency pair higher from 1.41 today, with at least 1.4150 resistance in sight.

February 24th 2021: Dollar Stabilises After Powell to End Mostly Unchanged; Pound Clocks Three-Year High, FP Markets

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  • February 24th 2021: Dollar Stabilises After Powell to End Mostly Unchanged; Pound Clocks Three-Year High, FP Markets
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