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January 15th 2021: DXY off Best Levels After Powell’s Dovish Comments

January 15th 2021: DXY off Best Levels After Powell’s Dovish Comments, 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, buyers made an entrance heading into the close of 2020 and recorded fresh multi-month highs.

This, despite January’s current slide off 2021 pinnacles (-0.4 percent), 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:

Largely brought forward from previous analysis –

1.2095 support has been a talking point on this timeframe since price recoiled from 2021 highs around 1.2349 (after crossing paths with a descending wedge pattern’s [1.2011/1.1612] take-profit target at 1.2318 [yellow]). As you can see, Thursday spiked to lows just ahead of 1.2095.

Trend on this timeframe remains decisively north, with the latest correction to possibly attract dip-buying strategies.

Through the lens of the RSI indicator, the value hovers within a stone’s throw from trendline support, though is also circling under the 50.00 centreline.

H4 timeframe:

Support at 1.2164, a level with history dating as far back as January 2018 and additional support from Fib levels at 1.2154/1.2167, came under fire on Thursday as price journeyed to a session low at 1.2111.

Should 1.2164 survive, resistance is calling at 1.2214. Abandoning the aforesaid support, on the other hand, guides attention to demand from 1.2040/1.2065.

H1 timeframe:

1.2125 support made an entrance heading into US trading on Thursday, and held tight, albeit experiencing a modest whipsaw to session lows. The 100-period simple moving average is currently active, circling the 1.2169 neighbourhood. Space above the noted SMA points to 1.22 resistance.

With reference to the RSI indicator’s position, the value climbed 50.00 and hovers around the 52.00 mark, as we write.

Observed levels:

Partly modified from previous analysis –

H4 support at 1.2164 continues to echo a vulnerable tone, particularly after Thursday’s downside assault.

Elbowing through H1 support at 1.2125, therefore, remains a scenario worth keeping an eye on, as 1.21 may act as a magnet to price, given its connection with daily support set at 1.2095. A rebound from here, of course, would also be in line with the monthly timeframe calling for higher levels.

January 15th 2021: DXY off Best Levels After Powell’s Dovish Comments, FP Markets

AUD/USD:

Monthly timeframe:

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

Rebounding from demand at 0.7029/0.6664 (prior supply) in late 2020, buyers, according to the monthly chart, appear free to explore as far north as 0.8303/0.8082, 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:

In recent days, AUD/USD spun higher ahead of support at 0.7647 and is en route to challenge 2021 tops at 0.7820. Sustained interest to the upside also sheds light on supply at 0.7937/0.7890.

Momentum, as measured by the RSI oscillator, shows support at 60.00 creating a base. The indicator currently loiters around 65.00.

H4 timeframe:

Developments from the H4 chart reveals the pair tested the resolve of resistance at 0.7805. As you can see, this level also brings together trendline resistance (prior support – 0.7461) and a 127.2% Fib projection at 0.7815. Above 0.7805 throws light on 0.7843 resistance.

Downstream, trendline support (0.6991) is visible, together with demand at 0.7665/0.7644.

H1 timeframe:

US trading Thursday lifted the currency pair into an area of resistance, mustered from 0.78, a 127.2% Fib projection at 0.7804 and a 100% Fib ext. at 0.7807.

The recent withdrawal from 0.78 throws trendline support (0.7666) into the limelight, arranged just ahead of 0.7750 support and the 100-period simple moving average around 0.7736.

RSI fans will note the indicator greeted overbought territory as price welcomed 0.78, with the RSI value now trading just south of 60.00.

Observed levels:

Partly modified from previous analysis –

  • Monthly price set to reach supply at 0.8303/0.8082.
  • Daily price exhibits scope to reach supply at 0.7937/0.7890.
  • H4 and H1 welcoming resistance.

On account of the above, a minor correction is on the table, with dip-buyers possibly eyeing H1 trendline support/0.7750 support as a platform.

January 15th 2021: DXY off Best Levels After Powell’s Dovish Comments, 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 within close range of retesting 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:

Brought forward from previous analysis –

Buyers and sellers continue to square off ahead of trendline resistance (111.71), following the 103.08 support rebound seen last week.

Beyond the aforesaid areas, demand is seen at 100.68/101.85 (encases monthly support at 101.70), and supply at 106.33/105.78 along with the 200-day simple moving average.

Also prominent is the RSI indicator testing resistance at 57.00, a level hampering upside since July 2020.

H4 timeframe:

Thursday, as you can see, reconnected with 104.16 resistance and stirred a downside reaction back into the hands of demand at 103.46/103.58 (prior supply).

Downriver, demand is set around 102.95/102.82, arranged beneath support at 103.08.

H1 timeframe:

Technical observations on the H1 are as follows:

  • 104 resistance, in addition to supply at 104.03/104.10 (prior demand).
  • 103.50 support.
  • Fibonacci support zone between 103.24 and 103.32 (blue).

Observed levels:

Partly modified from previous analysis –

The monthly timeframe shows 104.62 is likely to still be retested (closely unites with daily trendline resistance) before reaching for 101.70 support.

H4 areas to be mindful of are 104.16 resistance and demand at 103.46/103.58.

A closer reading on the H1 shows Fibonacci support at 103.24/103.32 may garner attention, as might the 104 space owing to the local confluence it brings to the table.

 

January 15th 2021: DXY off Best Levels After Powell’s Dovish Comments, 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). January, as you can see, modestly extended gains and currently trades off session lows.

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:

Partly modified from previous analysis –

Renewing 2021 highs, GBP/USD is on the verge of joining hands with resistance at 1.3755, with a breach uncovering supply at 1.3996/1.3918.

Should sellers regain consciousness, Monday’s swing low at 1.3450 could be challenged.

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

H4 timeframe:

Resistance at 1.3711, and associated Fib ext. levels, are under fire as we write. Splitting the aforesaid level shines light on resistance from 1.3763, set just a few pips north of daily resistance at 1.3755.

Demand at 1.3576/1.3607 is plotted below, with a break uncovering additional demand at 1.3401/1.3446 (and associated Fibs).

H1 timeframe:

The technical scene on the H1 chart has buyers and sellers going toe-to-toe around the lower side of 1.37.

Although sellers defended 1.37 in the past, the recent downside move from the round number failed to reach the demand area listed on the H4 timeframe at 1.3576/1.3607, which suggests bid-side strength.

Skies above 1.37 appear reasonably clear until the 1.3750 resistance, arranged just under daily resistance at 1.3755.

Observed levels:

Scope to travel north on the monthly timeframe and also on the daily timeframe (at least until resistance at 1.3755), on top of the lack of selling interest from the 1.37 region on the lower timeframes, implies a break of 1.37 is in the offing, with 1.3750 resistance targeted (plotted on H1 chart).

January 15th 2021: DXY off Best Levels After Powell’s Dovish Comments, FP Markets

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  • January 15th 2021: DXY off Best Levels After Powell’s Dovish Comments, FP Markets
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