1. Home
  2. »
  3. Technical Analysis
  4. »
  5. January 29th 2021: Greenback...

January 29th 2021: Greenback Entered Defensive Phase Amidst Risk-On Environment

January 29th 2021: Greenback Entered Defensive Phase Amidst Risk-On Environment, 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 back-to-back bullish candles, welcomed 2021 in good health.

This—despite January’s modest 0.7 percent slide—reasons additional upside towards ascending resistance (prior support – 1.1641) may eventually 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:

Brought forward from previous analysis –

38.2% Fib support at 1.2059 recently welcomed price for a second time this month, as the pair failed to find acceptance beyond 1.2189.

Buying invites the possibility of retesting 2021 tops at 1.2349; in case of a EUR/USD dip, demand at 1.1923/1.2001 occupies space south of 1.2059—an area complemented by trendline support (1.0774).

The RSI indicator remains navigating south of the 50.00 centreline, leaving resistance at 60.30 untested.

H4 timeframe:

Largely brought forward from previous analysis –

Holding back sellers since the beginning of December, demand at 1.2040/1.2065 stepped forward on Wednesday and prompted a hammer candle formation (bullish signal at troughs). As you can see, buyers marginally extended recovery gains on Thursday, though it was not anything to write home about.

Resistance at 1.2179 remains in the crosshairs (capping buyers since the middle of January), while a 1.2179 breach shines light on 1.2214 resistance. Interestingly, the aforesaid level is sheltered under supply coming in from 1.2282/1.2245 (Fib fans will also note the 61.8% Fib level inhabits territory at 1.2241).

H1 timeframe:

Early hours US on Thursday saw price change hands, following a 1.21 retest. Subsequent upside witnessed EUR/USD greet the 100-period simple moving average at 1.2140, fixed nearby resistance at 1.2145.

Aside from the 1.2177 previous AB=CD resistance, further outperformance could target 1.22.

Meanwhile, the RSI indicator is on the verge of retesting support around the 50.00 centreline, following a retreat from 59.70.

Observed levels:

Similar to Thursday’s technical outlook, the rebound from 38.2% Fib support at 1.2059 on the daily, in tandem with monthly possibly calling higher, could have H1 buyers attempt to topple resistance at 1.2145 today, with H4 resistance at 1.2179 targeted.

January 29th 2021: Greenback Entered Defensive Phase Amidst Risk-On Environment, FP Markets

AUD/USD:

Monthly timeframe:

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

Following two spirited months of gains off demand at 0.7029/0.6664 (prior supply), early 2021 shines light on a possible continuation higher to 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:

Technicians will note support at 0.7647 encouraged a hammer pattern on Thursday, a move that also missed trendline support (0.5506) by a whisker. Supply at 0.7937/0.7890 may make an arrival in the event we press higher.

Out of the RSI indicator, the value is currently testing the lower side of an early descending channel (balancing off the 50.00 centreline), while resistance beyond channel resistance is set at 80.19.

H4 timeframe:

Underpinned on the back of a moderately weaker US dollar, AUD/USD forged support from demand at 0.7600/0.7625, accompanied by a 127.2% Fib projection at 0.7620.

Heading into the final hours of Thursday, however, price is on course to conclude by way of a shooting star from a Fib cluster at 0.7696.

H1 timeframe:

Upon closer examination of price action, the H1 chart reveals the pair topping within close range of the 0.77 level and 100-period simple moving average at 0.7699.

From the RSI indicator, you will also note the value recently joined hands with resistance at 60.18, shortly after advancing from oversold space.

Observed levels:

Higher timeframes suggest buyers have the upper hand, according to charts: monthly eyeing higher levels and daily chalking up a hammer candle off support.

Shorter-term, however, H4 could squeeze out a shooting star pattern off a Fib cluster at 0.7696, with H1 also seen spinning lower ahead of 0.77.

The higher timeframes, therefore, could influence selling today. Above 0.77 may trigger a bullish play, with 0.7750 targeted.

January 29th 2021: Greenback Entered Defensive Phase Amidst Risk-On Environment, 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 has so far attempted a comeback. On course to snap a four-month losing streak, the pair could retest 104.62.

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

Daily timeframe:

Partly modified from previous analysis –

Trendline resistance (111.71) made a show on Wednesday, following two weeks of consolidation. Interestingly, Thursday responded by forming a shooting star (a candlestick pattern often interpreted as a bearish signal). Traders will note the lower side of the descending triangle pattern at 104.62 unites closely with the daily trendline resistance.

Also of technical interest is the RSI indicator linking with resistance at 57.00, a level hindering upside since July 2020.

H4 timeframe:

The 127.2% Fib extension at 104.34 knocked some wind out of the USD/JPY’s recent upside, forming a number of consecutive indecision candles.

Support is in position below at 104.16. Assuming buyers make a stand here and manage to conquer 104.39 and 104.57 pinnacles, 104.76 resistance is seen, a level that closely shares space with monthly resistance at 104.62 (lower side of the descending triangle pattern).

Below 104.16, this may unshackle downside to trendline support (102.59).

H1 timeframe:

Thursday’s retracement slide from near-two-month highs led H1 to support at 104.19 (previous resistance). As you can see, the past five hours have seen buyers and sellers square off around the aforesaid support level. 104.19 letting go today perhaps unlocks the door to 104.05 support, fixed on top of the 104 psychological support level.

RSI followers may also note the value is seen attempting to rebound from the 50.00 centreline.

Observed levels:

Monthly price is on the verge of welcoming 104.62 resistance, while daily price furnished its chart with a shooting star candle at trendline resistance on Thursday.

H4 dropping through support at 104.16 potentially provides an early cue higher timeframe sellers could seek deeper water, with H4 trendline support in sight. By extension, a H4 close sub 104.16 could also provoke a H1 close below 104 and trigger an intraday breakout scene.

January 29th 2021: Greenback Entered Defensive Phase Amidst Risk-On Environment, 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).

January, as you can see, currently trades off session lows and recorded fresh 2021 highs (up by 0.5 percent).

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:

Partly modified from previous analysis –

Despite Wednesday connecting with resistance at 1.3755, price continues to consolidate gains around 2021 tops.

Breaching 1.3755 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. It is common to see higher oversold support areas form in an uptrend.

H4 timeframe:

Demand at 1.3618/1.3637 has proven an effective base in the latter part of January, withstanding numerous downside attempts.

Overhead, resistance is seen at 1.3763, with a break unmasking supply at 1.3837/1.3800.

H1 timeframe:

Though not considered traditional trendline support, the ascending line extended from the low 1.3450 has provided support since January 18, with Thursday rebounding strongly from the aforesaid line.

This deserved notice as price dethroned the 100-period simple moving average and the 1.37 level. Directly above, 1.3750 resistance is realised, closely stationed nearby daily resistance at 1.3755 and H4 resistance from 1.3763.

Observed levels:

With the immediate trend pointing higher (see daily timeframe), and considerable resistance made up between 1.3763 and 1.3750 (daily, H4 and H1), price action could become messy over the next few days.

However, seeing monthly price settling above trendline resistance, albeit with the primary trend still facing south, this could eventually call for higher levels.

January 29th 2021: Greenback Entered Defensive Phase Amidst Risk-On Environment, 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 29th 2021: Greenback Entered Defensive Phase Amidst Risk-On Environment, FP Markets
    • Articles
    • Views
    AUTHOR

    FP Markets

    FP Markets is an Australian regulated broker established in 2005 offering access to Derivatives across Forex, Indices, Commodities, Stocks & Cryptocurrencies on consistently tighter spreads in unparalleled trading conditions. FP Markets combines state-of-the-art technology with a huge selection of financial instruments to create a genuine broker destination for all types of traders.

    PROFILE