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February 9th 2021: Dollar Index Remains Depressed Following Friday’s Non-Farm Payrolls

February 9th 2021: Dollar Index Remains Depressed Following Friday’s Non-Farm Payrolls, 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)

Following the break of long-term trendline resistance (1.6038) in July, and subsequent break of supply at 1.1857/1.1352 in August, EUR/USD, by way of two vigorous back-to-back bullish candles, welcomed 2021 in good health.

While increased upside towards ascending resistance (prior support – 1.1641) may materialise, an 1.1857/1.1352 retest is also on the cards in view of January and February’s correction.

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:

Demand at 1.1923/1.2001, together with support at 1.1965 (previous Quasimodo resistance), claimed position into the second half of last week.

Friday also produced a bullish outside reversal—a signal buyers tend to take note of, particularly off supportive structure within uptrends (note this market has been trading higher since 2020). The next upside target on the daily scale can be seen around 1.2190 tops.

Technicians are also urged to chalk up support at 1.1887, realised a touch south of the aforesaid demand area.

With reference to the RSI indicator, the value (currently trades at 44.30) remains on the doorstep of the 50.00 centreline, followed by RSI trendline resistance and RSI resistance at 60.30.

H4 timeframe:

Trendline resistance (1.2349) and a 50.0% retracement level at 1.2067 deserve attention on the H4 scale. Although sellers could make an entrance here, a breach is also interesting—movement that directs focus to Quasimodo resistance priced in at 1.2142 and resistance at 1.2179.

H1 timeframe:

With the US dollar index exploring deeper water Monday, this modestly lifted EUR/USD and registered a second consecutive gain.

After H1 retested support at 1.2032 (sited above the 100-period simple moving average), a previous Quasimodo resistance, the candles made their way into the walls of supply at 1.2078/1.2062. Interestingly, the supply merges with H4 trendline resistance.

Skies above current H1 supply point to the 1.21 neighbourhood.

RSI followers will note support at 52.09 served well on Monday, closely coinciding with trendline support.

Observed levels:

From a long-term technical perspective, buyers could book further gains. The upper side of monthly demand at 1.1857, along with daily demand at 1.1923/1.2001 and daily support from 1.1965, offers healthy confluence to work with.

While bullish bets are likely to increase, short-term chart structure exhibits resistance (trendline formation on the H4 and H1 supply from 1.2078/1.2062) and, by extension, possible bearish themes.

February 9th 2021: Dollar Index Remains Depressed Following Friday’s Non-Farm Payrolls, FP Markets

AUD/USD:

Monthly timeframe:

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

January pencilled in a half-hearted shooting star candle formation (often interpreted as a bearish signal at peaks), following two spirited months of gains off demand at 0.7029/0.6664 (prior supply).

February, however, is positive thus far, sparking a possible continuation higher to 0.8303/0.8082—a supply zone aligning closely with trendline resistance (prior support – 0.4776).

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

Daily timeframe:

Partly modified from previous analysis –

Monday extended recovery gains north of trendline support (0.5506), with sustained bullish interest to perhaps approach 0.7782 tops, along with the 2021 peak at 0.7820. Should buyers throw in the towel and take over trendline support, on the other hand, light shines on demand at 0.7453/0.7384 (prior supply).

RSI flow elbowed back above 50.00 in recent moves, signalling the value could reach for RSI trendline resistance and possibly venture into overbought space.

H4 timeframe:

Sellers from Quasimodo resistance at 0.7698 were on the ropes Monday as AUD/USD pursued higher ground. With 0.7698 possibly echoing support today, follow-through upside could materialise and approach another Quasimodo resistance at 0.7747.

H1 timeframe:

In tandem with the H4 chart, offers were cleared around the 0.77 figure on the H1 chart Monday, likely tripping stops.

Supply (red arrow) is visible around 0.7725, yet price may be attracted to 0.7750 resistance and H4 Quasimodo resistance from 0.7747.

Mild bearish divergence is seen out of the RSI window, along with the indicator also exiting overbought territory.

Observed levels:

All four timeframes show bulls are growing in confidence.

With this, H1 could defend 0.77 today and reach for at least the 0.7750 region.

February 9th 2021: Dollar Index Remains Depressed Following Friday’s Non-Farm Payrolls, FP Markets

USD/JPY:

Monthly timeframe:

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

Since January snapped a four-month bearish phase in the shape of a bullish engulfing candle, buyers have remained mostly at the wheel in February, north of support at 101.70.

Resistance can be seen in the form of a descending line (not considered a traditional trendline resistance), etched from the high 118.66.

Daily timeframe:

Partly modified from previous analysis –

USD/JPY recently snapped a seven-day winning streak, garnering resistance from the lower side of supply at 106.33/105.78 and a 200-day simple moving average at 105.57. Healthy selling from here could eventually pull things back to trendline resistance-turned support, taken from the high 111.71.

Technical eyes may also be drawn to the RSI indicator, which recently exited overbought levels and drew light on support at 57.00.

H4 timeframe:

Largely unchanged from previous analysis –

In conjunction with the daily timeframe recently crossing swords with supply and the 200-day simple moving average, last week saw H4 bump heads with an alternate AB=CD bearish pattern at the 127.2% Fib extension level from 105.63.

Traditional take-profit objectives from AB=CD formations are 38.2% and 61.8% Fib retracements, which in this case are 104.50 and 103.72, respectively, derived from the pattern extremes: A-D legs.

H1 timeframe:

In line with the US dollar index navigating lower levels, USD/JPY, heading into the US session on Monday, aggressively pushed lower and shook hands with interesting support between 105.10 and 105.18 (green—made up of a 78.6% Fib level at 105.10, a support level at 105.14, a 127.2% Fib projection also at 105.14 and a 100% extension from 105.18).

Downstream, we also have demand at 104.96/105.06, an area that houses the 105 figure.

Momentum—measured by the RSI oscillator—is showing signs of recovering ahead of the oversold region, following a dominant move beneath the 50.00 centreline.

Observed levels:

January’s Monthly bullish engulfing candle could prove persuasive over the coming weeks. Though buyers could have trouble booking further gains in the face of daily supply (106.33/105.78) and 200-day simple moving average.

The H4 timeframe registers scope to reach for the 38.2% H4 Fib level at 104.50, in line with the daily timeframe’s direction.

H1 support between 105.10 and 105.18 is currently working alongside the monthly timeframe’s bullish engulfing candle.

February 9th 2021: Dollar Index Remains Depressed Following Friday’s Non-Farm Payrolls, FP Markets

GBP/USD:

Monthly timeframe:

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

December’s 2.5 percent extension elevated GBP/USD and stirred trendline resistance (2.1161), with January refreshing multi-month highs and logging a 0.2 percent gain.

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

Daily timeframe:

Largely unchanged from previous analysis –

In spite of a third consecutive daily gain, resistance at 1.3755 remains a ceiling buyers have been unable to penetrate since January 21.

Breaching the latter, however, brings light to supply at 1.3996/1.3918.

The RSI indicator has revealed a rangebound environment since November, limited by support around 47.00 and resistance at the 66.00 region (the value stands at 58.00). It is common to see higher oversold support areas form in an uptrend.

H4 timeframe:

Largely unchanged from previous analysis –

The Quasimodo formation at 1.3572 proved effective support in the second half of last week, with recent action touching gloves with peaks at 1.3749. Overhead, resistance is visible at 1.3763, with a break unveiling supply at 1.3837/1.3800.

H1 timeframe:

Following a dominant whipsaw through 1.37, with enough force to likely trip stops and cause pain, H1 reclaimed 1.37+ status as we transitioned into the US session and consolidated gains just south of Quasimodo resistance from 1.3751.

Above 1.3751, the H1 chart exhibits scope to approach 1.38.

RSI fans may also note the indicator formed bearish divergence on Monday and is currently pursuing terrain slightly south of overbought space.

Observed levels:

While the monthly timeframe shines light on the possibility of further gains, along with a clear upside bias in play since the beginning of March, sellers may attempt to secure a position from the combination of daily, H4 and H1 resistances between 1.3755, 1.3763 and 1.3751, respectively.

February 9th 2021: Dollar Index Remains Depressed Following Friday’s Non-Farm Payrolls, FP Markets

DISCLAIMER:

The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com and should be considered before deciding to deal in those products. Derivatives can be risky; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • February 9th 2021: Dollar Index Remains Depressed Following Friday’s Non-Farm Payrolls, FP Markets
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