March 26th 2021: Dollar Index Refreshes 2021 Tops and Dethrones 200-Day SMA

March 26th 2021: Dollar Index Refreshes 2021 Tops and Dethrones 200-Day SMA, 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)

As we head into the closing stages of March, EUR/USD is seen dipping into 1.1857/1.1352 demand, lower by 2.5 percent.

A decisive rebound from the aforesaid demand shifts attention back to the possibility of fresh 2021 peaks and a test of ascending resistance (prior support – 1.1641). An extension to the downside, on the other hand, shines the technical spotlight on trendline resistance-turned support, taken from the high 1.6038.

In terms of trend, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

Europe’s shared currency pencilled in another bearish scenario on Thursday amid Eurozone COVID fears, touching near 5-month lows against the greenback.

Wednesday rupturing the 200-day simple moving average at 1.1854, likely aided Thursday’s decline as breakout sellers entered the fight.

Sustained moves below the 200-day simple moving average shines the technical spotlight on Quasimodo support drawn from 1.1688.

In terms of the RSI oscillator, bullish divergence is taking shape with the value currently teasing 33.00.

H4 timeframe:

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

Quasimodo support at 1.1818 welcomed price movement on Wednesday, a level which, as you can see, has held form so far. Despite this, soft buying interest is seen, suggesting a break to test the double-top pattern’s take-profit target (yellow) at 1.1774 (measured by taking the distance from the highest peak in the pattern to the neckline and extending this measurement to the downside at the breakout point).

As evident from the chart, price dethroned Quasimodo support at 1.1818 and surpassed the double-top pattern’s take-profit target at 1.1774. Recent hours also witnessed price dip below Quasimodo support at 1.1779, which now serves as resistance and could ignite further selling to demand at 1.1681/1.1725.

H1 timeframe:

With 1.18 cleared amid Thursday’s decline, demand calls for attention around 1.1727/1.1744, an area plotted two pips north of H4 demand from 1.1681/1.1725.

RSI movement, on the other hand, is seen chalking up bullish divergence.

Observed levels:

Technical studies, based on the daily, H4 and H1 timeframes, have short-term sellers at the wheel today, threatening moves to H1 demand at 1.1727/1.1744. Dipping lower places H4 demand at 1.1681/1.1725 on the scene, an area holding daily Quasimodo support at 1.1688.

The above may have sellers drill down to lower timeframes today in attempt to secure a bearish position.

March 26th 2021: Dollar Index Refreshes 2021 Tops and Dethrones 200-Day SMA, FP Markets

AUD/USD:

Monthly timeframe:

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

February finished considerably off best levels, establishing what many candlestick fans call a shooting star pattern—a bearish signal found at peaks. What’s interesting was February came within striking distance of trendline resistance (prior support – 0.4776), sheltered under supply from 0.8303/0.8082.

March trades lower by 1.6 percent, currently testing February’s lows. Should sellers extend, demand is in view at 0.7029/0.6664 (prior supply).

With respect to trend (despite the trendline resistance [1.0582] breach in July 2020), the primary downtrend (since mid-2011) remains in play until breaking 0.8135 (January high [2018]).

Daily timeframe:

The US dollar index (DXY) crossing above its 200-simple moving average left AUD/USD somewhat muted on Thursday, establishing a doji indecision candle. This follows two back-to-back bearish days, spanning more than 160 pips.

Notably, price tested February’s low at 0.7563. Subsequent downside may take aim at demand from 0.7453/0.7384 (previous supply)—dovetailing closely with a 100% Fib extension at 0.7465 and a 161.8% Fib projection at 0.7389.

RSI movement edged closer to oversold space, testing waters south of 40.00.

H4 timeframe:

Buyers from Quasimodo support at 0.7592 were unconvincing on Thursday. This gave rise to a modest breach, with 0.7592 functioning as resistance.

Demanding attention to the downside is another Quasimodo support at 0.7529.

H1 timeframe:

Following the formation of a double-top pattern (purple: 0.7612), price action nosedived south of 0.76. The subsequent 0.76 retest led to additional bearish pressure and short-term pattern sellers likely reducing risk to breakeven.

Demand is seen to the downside at 0.7546/0.7555, converging with the double-top pattern’s take-profit target (yellow).

RSI flow is currently crossing swords with trendline resistance around the 40.00 neighbourhood.

Observed levels:

In similar fashion to Wednesday’s technical report, the 4 timeframes analysed remain in a bearish state, according to chart studies.

This may lead to continuation selling south of 0.76 on the H1, initially targeting H1 demand at 0.7546/0.7555 (set just beneath February’s low from 0.7563). A retest of 0.76, therefore, may also attract bearish flow.

March 26th 2021: Dollar Index Refreshes 2021 Tops and Dethrones 200-Day SMA, 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, up by 2.5 percent, is closing in on descending resistance, etched from the high 118.66. A spirited break of the latter swings the technical pendulum in favour of further upside.

To the downside, support inhabits 101.70.

Daily timeframe:

Partly modified from previous analysis.

USD/JPY buyers went on the offensive Thursday, in line with the DXY rising above its 200-day simple moving average.

Quasimodo resistance from 109.38 is now within touching distance, with a breach fuelling possible continuation action towards supply at 110.94/110.29.

With respect to trend, 2021 has pointed to the upside.

Based on the RSI oscillator, the value continues to circle overbought space.

H4 timeframe:

Partly modified from previous analysis.

Since March 9, USD/JPY has been sandwiched between Quasimodo resistance at 109.16 and demand at 108.31/108.50.

With buyers and sellers now squaring off around the upper side of the said range, supply at 109.59/109.37—houses daily Quasimodo resistance at 109.38—could make an entrance today.

Beneath 108.31/108.50, it may interest traders to note support at 108.09 and fresh demand parked at 107.81/108.01.

H1 timeframe:

Heading into London hours, price begun establishing an ascending wedge (109.16/109.02) and tested a 100% Fib extension at 109.17 heading into US trading. North of here, traders will note Fib resistance at 109.31/109.27 (yellow [made up of a 127.2% Fib extension and a 161.8% Fib projection]).

A breakout beneath the ascending wedge signals short-term weakness, possibly testing 109.

With respect to the RSI oscillator, bearish divergence is taking shape out of overbought territory, with further downside to test trendline support.

Observed levels:

Partly modified from previous analysis.

Longer term, eyes likely remain on daily Quasimodo resistance at 109.38 and merging monthly descending resistance.

Shorter term, H4 Quasimodo resistance at 109.16, coupled with the H1 timeframe’s ascending wedge and 100% Fib extension, could spark bearish activity today, targeting 109 (H1). Alternatively, a spike into H1 Fib resistance at 109.31/109.27 could form before sellers make a show (if at all).

March 26th 2021: Dollar Index Refreshes 2021 Tops and Dethrones 200-Day SMA, 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 followed through to the upside (1.7 percent) and refreshed 2021 highs at 1.4241, levels not seen since 2018. March currently trades lower by 1.4 percent, contained within February’s range.

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

Daily timeframe:

Sterling outperformed against the dollar Thursday, snapping a two-day bearish phase and closing the session within touching distance of resistance at 1.3755.

Any downside attempts has Quasimodo support at 1.3609 to target.

RSI action rebounded from 36.20, with enough force to possibly have the value retest resistance between 46.21 and 49.16.

H4 timeframe:

Thursday’s recovery gains elevated GBP/USD to 1.3730/1.3749 supply, leaving the 127.2% Fib projection at 1.3649 unchallenged.

External zones to be conscious of today are supply at 1.3761/1.3789 and Quasimodo support at 1.3611.

H1 timeframe:

Ahead of support at 1.3653, Thursday had price reclaim 1.37+ status and subsequently retested the latter as support. This formed in lockstep with RSI movement breaching trendline resistance and retesting the level as support (now hovering ahead of overbought space).

1.3750 resistance is worth noting, with territory above highlighting trendline resistance, extended from the high 1.4001, and the 100-period simple moving average around 1.3771.

Observed levels:

1.3755 resistance on the daily scale, 1.3750 resistance on the H1 and H4 supply at 1.3761/1.3789 forms a zone of resistance that sellers may be drawn to.

Alternatively, the H1 chart may see price action welcome trendline resistance and joining 100-period simple moving average.

March 26th 2021: Dollar Index Refreshes 2021 Tops and Dethrones 200-Day SMA, FP Markets

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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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • March 26th 2021: Dollar Index Refreshes 2021 Tops and Dethrones 200-Day SMA, FP Markets
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