January 12th 2021: USD Revival Continues to Gather Momentum

January 12th 2021: USD Revival Continues to Gather Momentum, 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)

Shortly following the break of long-term trendline resistance (1.6038) in July, and subsequent break of supply from 1.1857/1.1352 in August, buyers made an entrance heading into the close of 2020 and recorded fresh multi-month highs. This reasons additional upside towards ascending resistance (prior support – 1.1641) may be on the horizon.

The primary uptrend has been in play since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

Partly modified from previous analysis –

By way of three daily bearish candles, EUR/USD is on course to tunnel into a nearby support from 1.2095. This follows last week confronting the descending wedge pattern’s (1.2011/1.1612) take-profit target at 1.2318 (yellow).

Trend on this timeframe remains decisively north, establishing a series of higher highs and higher lows since March 2020.

In terms of the RSI indicator, following the formation of bearish divergence, the value is seen attempting to cross through the 50.00 centreline.

H4 timeframe:

After bringing down trendline support (1.1602) in the latter half of last week, Monday addressed notable S/R at 1.2164, derived from January 2018. Traders will also note the support level joins forces with a number of Fib levels at 1.2154/1.2167.

With buyers yet to show much enthusiasm from 1.2164, demand at 1.2040/1.2065 is well-positioned to receive price action.

H1 timeframe:

Areas of interest on the H1 chart are the supply zone at 1.2197/1.2181 and neighbouring round number resistance 1.22. In addition, support is fixed at 1.2125, placed just ahead of the 1.21 level.

RSI fans may also see the indicator is currently rangebound between resistance at 42.21 and the 30.00 oversold level.

Observed levels:

1.2095 support fixed on the daily timeframe could make a show today, perhaps dragging H4 through support around 1.2164 and H1 through support at 1.2125 to test the 1.21 level. Given monthly price calling for higher levels, buyers may be drawn to the 1.21 level and daily support 1.2095 combination today.

Before any downside emerges, however, a spike into H1 supply at 1.2197/1.2181 could form.

January 12th 2021: USD Revival Continues to Gather Momentum, 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 pivotal rebound from demand at 0.7029/0.6664 (prior supply), buyers, according to the monthly chart, 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:

Thanks to further weakness materialising on Monday, extending south of recent 2021 peaks, AUD/USD is poised to test the resolve of 0.7647 support.

In conjunction with the prevailing uptrend (since March 2020), and monthly price taking aim at higher pinnacles, a successful 0.7647 retest throws a light on supply at 0.7937/0.7890.

Momentum, as measured by the RSI oscillator, shows the indicator exited overbought terrain in recent trading.

H4 timeframe:

Trendline support (0.7461) gave way in early movement, allowing for a near-test of demand at 0.7665/0.7644 (prior supply). Price action traders may have also noticed this demand intersects with trendline support (0.6991).

Below the aforesaid supports, another demand is centred around 0.7600/0.7625. This is considered an important zone, with it being here a decision was made to breakout higher and take on offers around the 0.7639 December 17 high.

H1 timeframe:

Demand at 0.7654/0.7672 made an entrance heading into the US session Monday, fuelling a move above 0.77 to peaks just south of resistance from 0.7721/0.7731.

Although the rebound from the aforesaid demand was relatively spirited, price is seen crossing back beneath 0.77, threatening to retest demand and possibly make a run for support at 0.7623.

The RSI indicator tested oversold space on Monday, and recently generated a modest correction ahead of 50.00 and trendline resistance.

Observed levels:

Partly modified from previous analysis –

Monthly price appears itching to reach supply at 0.8303/0.8082, with daily price also exhibiting scope to rally to at least supply at 0.7937/0.7890. However, a 0.7647 support retest could arise on the daily chart before buyers come forward.

Interestingly, the H4 demand at 0.7665/0.7644 connects not only with H4 trendline support but also daily support from 0.7647. This confluence, therefore, may draw in dip-buyers.

January 12th 2021: USD Revival Continues to Gather Momentum, FP Markets

USD/JPY:

Monthly timeframe:

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

Over the span of four years, USD/JPY carved out a descending triangle pattern between 118.66/104.62.

Although December pursued terrain south of 104.62, January recently arranged a modest comeback and is on course to retest the lower side of 104.62.

104.62 ceding ground throws light on support from 101.70, with a break uncovering trendline support (76.15) and the descending triangle’s take-profit level at 91.04 (red).

Daily timeframe:

Partly modified from previous analysis –

Over the course of four consecutive bullish candles, price recoiled from support at 103.08 and is now within close range of welcoming trendline resistance (111.71), with a break unmasking supply at 106.33/105.78 and the 200-day simple moving average.

H4 timeframe:

Monday, as you can see, made its way above resistance at 104.16. This deserves notice. Resistance is seen around 104.76, spotted just above the 104.57 December 10 peak.

Having seen H4 action retesting 104.16, buyers may attempt to make an entrance from this region today.

H1 timeframe:

Demand at 104.03/104.10 (seated just above 104 support), formed in early trading on Monday, provided short-term buyers a platform with which to work with. The next upside resistance falls in around 104.50.

The picture coming out of the RSI indicator right now shows 44.40 support is in sight, with the value lifting above 50.00.

Observed levels:

Partly modified from previous analysis –

Higher timeframe action proposes a move to the lower side of the monthly descending triangle pattern at 104.62, aligning with daily trendline resistance.

H4 support forming a defence at 104.16, along with H1 demand also making a show at 104.03/104.10, advertises a possible bullish presence, with 104.50 and 104.62 (see above on the monthly chart) targeted.

January 12th 2021: USD Revival Continues to Gather Momentum, 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 push elevated GBP/USD to fresh multi-month highs and stirred trendline resistance (2.1161).

In terms of trend, however, the primary trend has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way – April high, 2018. In fact, the aforesaid high represents the next upside target on the monthly chart.

Daily timeframe:

Brought forward from previous analysis –

Resistance at 1.3755 remains a key level to be aware of on the daily chart, stationed below supply at 1.3996/1.3918. A sell-off, on the other hand, projects light on support at 1.3176.

The RSI has revealed a rangebound environment since November, limited by support around 47.00 and resistance at the 66.00 region.

H4 timeframe:

Monday’s technical research aired the following:

As you can see, demand at 1.3527/1.3556 remains in force.

Yet, through the simple lens of a technical trader, buyers appear to be losing grip. The initial reaction (black arrow) achieved modest highs at 1.3671, though subsequent reactions failed to challenge said peaks, implying sellers possibly have the upper hand here. Drifting through the aforesaid demand gestures a possible continuation to demand at 1.3401/1.3446 (aligns with a 161.8% Fib projection at 1.3441 and a 50% level at 1.3447).

As you can see, price did indeed drop through demand at 1.3527/1.3556 and came within touching distance of demand at 1.3401/1.3446, before pulling back to test the lower side of 1.3527/1.3556.

H1 timeframe:

Demand at 1.3435/1.3461 stepped forward as we transitioned into US trading on Monday, providing enough of a platform for buyers to overturn 1.35 resistance.

Overhead, 1.3550 resistance is seen, and represents a level of strength having noted the number of times the figure held as support since early January.

Observed levels:

The fact H4 retested the lower side of resistance at 1.3527/1.3556 may hinder buying above 1.35 on the H1. Though moves to 1.3550 are not out of the question as, technically speaking, this level is housed within the upper range of 1.3527/1.3556.

January 12th 2021: USD Revival Continues to Gather Momentum, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • January 12th 2021: USD Revival Continues to Gather Momentum, FP Markets
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