June 8th 2021: DXY Tentatively Sub 90.00

June 8th 2021: DXY Tentatively Sub 90.00, FP Markets

Charts: Trading View

EUR/USD:

Monthly timeframe:

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

Following a three-month retracement, support at 1.1857-1.1352 made an entrance and inspired a bullish revival in April, up 2.4 percent at the close. May also extended recovery gains, trading higher by 1.7 percent. June, however, is off to a mildly rocky start, down 0.2 percent as of current trade.

April upside—alongside May’s optimism—throws light on the possibility of fresh 2021 peaks in the months ahead, followed by a test of ascending resistance (prior support [1.1641]).

Based on trend studies, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017. Additionally, price breached major trendline resistance, taken from the high 1.6038, in July 2020.

Daily timeframe:

A closer reading of price action on the daily timeframe has the currency pair modestly higher on Monday in response to the USD edging lower. This follows Friday’s lower-than-anticipated US non-farm payrolls data.

Since mid-May, technicians will note the unit has been hovering (consolidating) within reach of Quasimodo resistance at 1.2278. Territory south of current price unearths dynamic support around 1.1982: the 200-day simple moving average.

The RSI remains engaging with support at 51.36, with the value demonstrating signs of strength off the base yesterday.

H4 timeframe:

For those who read Monday’s extensive technical briefing you may recall the following (italics):

The blend of a 100% Fib projection at 1.2123 and a 61.8% Fib retracement at 1.2094 (green) served as a floor of support Friday. Harmonic traders will recognise the 100% Fib projection established what’s known as an AB=CD pattern.

Textbook AB=CD take-profit targets—derived from legs A-D— fell on the 38.2% and 61.8% Fib retracements at 1.2167 and 1.2206, respectively. As you can see, price struck the 38.2% base and formed a shooting star candlestick pattern (bearish signal) on Friday.

As evident from the H4 chart, Monday dethroned the 38.2% Fib retracement at 1.2167 and is now within striking distance of the 61.8% Fib retracement at 1.2206, which, for many traders, represents the final upside target out of the AB=CD formation. Traders may acknowledge additional resistance resides at 1.2244.

H1 timeframe:

The mood turned positive for Europe’s single currency heading into the early hours of US trading on Monday, a handful of hours following a test of trendline resistance-turned support, taken from the high 1.2254. Subsequent action led to price travelling through the 100-period simple moving average at 1.2178 to shake hands with the 1.22 figure (sheltered just south of resistance from 1.2211). As noted in Monday’s briefing, the ‘H4 AB=CD’ pattern’s 61.8% Fib retracement is also located between the aforesaid H1 levels at 1.2206.

The H1 timeframe’s RSI is toying with space just beneath overbought conditions around 65.00ish. Indicator resistance remains positioned at 78.97.

Observed levels:

Scope for further upside is visible on the monthly scale, with the daily timeframe chalking up a potential line in the sand at 1.2278: a Quasimodo resistance level from 1.2278.

However, lower timeframe technical structure positions H1 around the 1.22 figure, representing possible resistance. This—coupled with another layer of H1 resistance at 1.2211 and the H1 RSI hovering within reach of overbought territory, as well as the H4 timeframe’s 61.8% (AB=CD) Fib level at 1.2206—perhaps unlocks a bearish scenario today, with short-term sellers likely taking aim at the 100-period simple moving average at 1.2178 as an initial base (H1).

June 8th 2021: DXY Tentatively Sub 90.00, FP Markets

AUD/USD:

Monthly timeframe:

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

Since the beginning of 2021, buyers and sellers have been battling for position south of trendline resistance (prior support – 0.4776 low) and supply from 0.8303-0.8082. Should a bearish scenario unfold, support at 0.7394 is featured to the downside, with additional downside pressure targeting demand at 0.7029-0.6664 (prior supply).

Trend studies (despite the trendline resistance [1.0582] breach in July 2020) show the primary downtrend (since mid-2011) remains in play until breaking 0.8135 (January high [2018]).

Daily timeframe:

Technical structure largely unchanged from previous analysis.

Despite the second half of last week snapping to a low of 0.7645, since April 20th, resistance at 0.7816 and support from 0.7699 continues to shape a defined range (yellow).

Support at 0.7563 remains in view as a potential objective should sellers attempt to take the wheel this week, a level deriving additional (dynamic) support from the 200-day simple moving average circling 0.7533. Above 0.7816, supply falls in around 0.8045-0.7985.

With respect to trend, as noted in previous analysis, we have been higher since the early months of 2020. However, we must also take into account that the currency pair has been mostly directionless since the beginning of 2021.

The RSI shows the value took above the 50.00 centreline on Monday, a move highlighting trendline resistance, drawn from 80.12.

H4 timeframe:

The Australian dollar extended Friday’s bullish narrative (delivered from FRESH demand at 0.7632-0.7653) on Monday, rising 0.3 percent against a broadly softer greenback. Overhead resistance falls on peaks around 0.7769 and Quasimodo resistance from 0.7782, shadowed by daily resistance noted above at 0.7816.

H1 timeframe:

Supply at 0.7783-0.7771—capped upside pressure at the beginning of June—is within a stone’s throw of making an entrance, a range secured a few pips beneath the 0.78 psychological figure.

Should short-term flow take a step back today, visiting the 100-period simple moving average at 0.7724 could be on the cards, arranged just ahead of 0.77 psychological level.

RSI action remains around a key level of resistance at 72.21 on the indicator. Incapable of crossing above the resistance shows upside momentum is, in theory, potentially fading.

Observed levels:

The daily timeframe’s consolidation between 0.7816 and 0.7699 remains centre stage.

Across the page on the H4 and H1 timeframes, intraday action, as underscored in Monday’s briefing, is tipped to lock horns with H1 supply at 0.7783-0.7771, which houses H4 Quasimodo resistance at 0.7782. Consequently, a bearish scene could unfold from within H1 supply if tested.

Alternatively, traders are urged to pencil in a possible drive to 0.78, a level sharing chart space with daily (range) resistance at 0.7816.

June 8th 2021: DXY Tentatively Sub 90.00, 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 and February’s outperformance, March concluded up by 3.9 percent and cut through descending resistance, etched from the high 118.66.

Although April finished lower by 1.3 percent and snapped the three-month winning streak, May (+0.2 percent) held the breached descending resistance, echoing potential support for the month of June, currently trading modestly on the backfoot by 0.2 percent.

Daily timeframe:

Technical structure largely unchanged from previous analysis.

As highlighted in Monday’s technical briefing, the piece noted that the lower border of long-term resistance at 110.94-110.29 (posted under supply at 111.73-111.19), in cooperation with Friday’s USD weakness in response to the latest US employment situation report, watched sellers make a show on Friday.

Amidst downside in US Treasury yields and the US dollar index (ticker: DXY) hesitantly elbowing through the 90.00 figure, USD/JPY appears poised to cross with 108.60ish lows (green oval), followed by supply-turned demand at 107.58-106.85.

Trend studies reveal the pair has been trending higher since the beginning of 2021.

The RSI remains stationed under resistance at 57.00 and is on course to tackle the 50.00 centreline. Should a break come to pass, a test of oversold might be in store, targeting support at 28.19.

H4 timeframe:

For those who read Monday’s technical report you may recall the following (italics):

Through the lens of a price action trader, demand at 109.02-109.20—a decision point to initially push above 109.71 tops—will be on the radar, aligning with a trendline support, drawn from the low 107.48. What’s important to recognise is the higher low formed at 109.33 and subsequent higher high at 110.33. This activity draws the attention of trend traders (buyers) who may now have protective stops under the noted higher low. Knowing this, and by identifying demand nearby at 109.02-109.20, we could see a stop run form early this week.

Slipping through 109.33 not only triggers buyers’ protective stop-loss orders (sells), the move also fills breakout sellers’ sell-stop orders, and collectively helps fuel moves into bids at 109.02-109.20 (remember bids/offers represent liquidity, and market orders attempt to consume liquidity).

As you can see, price touched gloves with H4 demand at 109.02-109.20 on Monday and has, for the time being, shown promise as a supportive structure.  

H1 timeframe:

Demand at 109.07-109.19, given the base is fixed within H4 demand mentioned above at 109.02-109.20, welcomed price action on Monday and has so far held position. Note this demand is placed within striking distance of the 109 figure.

What’s interesting is the RSI shows bullish divergence forming as the value left oversold territory. This informs traders that downside momentum could be pressing the pause button for the time being, consequently allowing bulls to make a show, which may see price upside make its way to the 100-period simple moving average around 109.71.

Observed levels:

Technically, we have H1 demand in play at 109.07-109.19 and H4 demand also active at 109.02-109.20, alongside the monthly timeframe attempting to forge support off a recently breached descending resistance line. Aside from the daily timeframe fading long-term resistance at 110.94-110.29, technical elements suggest a bullish wave is around the corner, targeting at least the 100-period simple moving average around 109.71 on the H1.

June 8th 2021: DXY Tentatively Sub 90.00, FP Markets

GBP/USD:

Monthly timeframe:

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

The pendulum swung in favour of buyers following December’s 2.5 percent advance, stirring major trendline resistance (2.1161). February subsequently followed through to the upside (1.7 percent).

May, despite diminished volatility during March and April, traded firmly on the front foot, up by 2.8 percent. June, however, is somewhat depressed, albeit recording fresh YTD peaks at 1.4250.

Despite the trendline breach (which could serve as support if retested), primary trend structure has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way (April high 2018).

Daily timeframe:

Technical structure largely unchanged from previous analysis.

Quasimodo resistance at 1.4250 and support at 1.4003 remain pivotal barriers on the daily chart.

Demand at 1.3857-1.3940—an important technical area where a decision was made to break above 1.4003 resistance—is also perhaps on the radar.

Interestingly, trend in this market has remained to the upside since March 2020.

Trendline support, taken from the low 36.14 on the RSI, gave up position last week and recently witnessed the value bottom ahead of the 50.00 centreline.

H4 timeframe:

Technical structure largely unchanged from previous analysis.

Since mid-May, the H4 chart has been busy carving out a consolidation between 1.4096 and 1.4219. In spite of a handful of whipsaws (fakeouts beyond range extremes are common), the range remains intact as we move into the first full week of June.

Technical structure above the current consolidation has daily Quasimodo resistance from 1.4250 in place; below the range, the chart points to trendline support, drawn from the low 1.3668, and support priced in at 1.4007.

H1 timeframe:

Attention on the H1 chart is largely centred on the 1.42 and 1.41 figures (the latter joins with a 61.8% Fib), echoing a similar picture to the H4 (see above). Within the zone, note we have the 100-period simple moving average trading at 1.4148.

Outside of these levels, focus is drawn to support at 1.4078 and resistance formed from 1.4246.

From the RSI, momentum pulled away from space just beneath oversold resistance yesterday and dipped under 60.00.

Observed levels:

Technical structure largely unchanged from previous analysis.

Aside from the monthly and daily timeframes showing us price trades near 2021 highs at 1.4250, immediate technical structure on these timeframes is limited for the time being. In spite of the above, traders are urged to keep an eye on daily Quasimodo resistance at 1.4250 and daily support at 1.4003 this week.

The H4 timeframe’s range between 1.4096 and 1.4219 is likely on the radar for medium-term traders, looking to fade range extremes. This will see H1 traders hone in on the 1.41/42 figures.

It’s also worth pointing out the technical convergence existing between H4 support at 1.4007 and the key figure 1.40 on the H1 (below current structure—not visible on the screen). The 1.40 zone could actually prove a solid platform to help facilitate a fakeout through H4 trendline support seen just above it around 1.4030ish.

June 8th 2021: DXY Tentatively Sub 90.00, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • June 8th 2021: DXY Tentatively Sub 90.00, 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
Start Trading with a Global Broker

Archives

Archives

Categories


Start
Trading
in Minutes

Open an account now


June 8th 2021: DXY Tentatively Sub 90.00, FP Markets Access +10,000 financial instruments
June 8th 2021: DXY Tentatively Sub 90.00, FP Markets Auto open & close positions
June 8th 2021: DXY Tentatively Sub 90.00, FP Markets News & economic calendar
June 8th 2021: DXY Tentatively Sub 90.00, FP Markets Technical indicator & charts
June 8th 2021: DXY Tentatively Sub 90.00, FP Markets Many more tools included

By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.