March 2nd 2021: DXY Clocks 3-Week High and Tackles 91.00

March 2nd 2021: DXY Clocks 3-Week High and Tackles 91.00, 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)

February, as you can see, eked out marginal losses (0.5 percent), ranging between 1.2243 and 1.1952.

Upriver, technical action suggests March could reach for ascending resistance (prior support – 1.1641), while lower on the curve 1.1857/1.1352 represents demand

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

Daily timeframe:

Thursday’s clear-cut shooting star pattern, in addition to Friday’s one-sided decline, had Monday increase downside and throw light on demand from 1.1923/1.2001, an area housing support at 1.1965 (a previous Quasimodo resistance).

The RSI wrapped up Monday south of the 50.00 centreline, following a near-test of resistance at 60.30 last week.

H4 timeframe:

Following Friday’s modest trendline support breach, an ascending line drawn from the low 1.1952, Monday retested the lower side of the aforesaid line and saw price action welcome demand at 1.2019/1.2037, an area withstanding downside pressure mid-February.

Technically on the H4 scale, limited support is seen below current demand, though the upper edge of daily demand is present around 1.1923/1.2001.

H1 timeframe:

Demand from 1.2036/1.2053 (glued to the upper side of H4 demand at 1.2019/1.2037) had a rough day on Monday, having its lower side challenged a number of times, likely consuming stops beneath the zone. Potentially weakening the zone, we could have sellers make a play for the widely watched figure 1.20.

The RSI continued to bump heads with oversold territory on Friday, with support at 20.64 remaining in sight.

Observed levels:

Lack of buying from H4 demand at 1.2019/1.2037, together with a fragile H1 demand at 1.2036/1.2053, implies 1.20 on the H1 is likely to make a show. Reinforced by the upper side of daily demand at 1.2001, buyers may embrace 1.20 as a support should the level be tested today.

March 2nd 2021: DXY Clocks 3-Week High and Tackles 91.00, 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, forming what many candlestick fans call a shooting star pattern—a bearish signal typically found at peaks. Also interesting was price came within striking distance of trendline resistance (prior support – 0.4776), sheltered under supply from 0.8303/0.8082.

In the context of 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:

Despite Friday dipping a toe in waters beneath trendline support, taken from the low 0.5506, Monday had buyers hit back and reclaim a portion of last week’s 2 percent decline. Supply at 0.8045/0.7985 is seen as the next upside target on this scale.

The trendline support breach shines the technical light on February 2nd low at 0.7563, with a break here unmasking demand at 0.7453/0.7384 (prior supply).

In terms of trend on this scale, the unit has been convincingly higher since March 2020.

H4 timeframe:

The combination of trendline support, drawn from the low 0.7563, and demand priced at 0.7696/0.7715, clearly appealed on Friday, with buyers showing their support on Monday. Resistance calls for attention at 0.7805, with a break unveiling supply from 0.7848/0.7867 (prior demand).

Below current demand, technical traders are likely observing demands at 0.7650/0.7681 and 0.7601/0.7627, as well as Quasimodo support at 0.7592.

H1 timeframe:

Following an earlier recovery from support at 0.7724, the H1 candles have since consolidated just south of the 0.78 figure. Not only is this considered a widely watched psychological hurdle, the level brings Fib studies and an AB=CD bearish pattern to the table (black arrows).

The technical picture out of the RSI shows momentum climbing, entrenched within the parapets of an ascending channel. Note, the value also ended Monday marginally north of the 50.00 centreline.

Observed levels:

Short term, the 0.78 figure on the H1, accompanied by Fib studies and an AB=CD bearish pattern, will likely attract bearish interest. It is also worth noting that H4 resistance merges with the H1 area at 0.7805.

Longer term, on the other hand, shows buyers may have some gas left in the tank from trendline support on the daily timeframe. Though in support of a bearish play is monthly price rejecting space just beneath trendline resistance and supply from 0.8303/0.8082.

March 2nd 2021: DXY Clocks 3-Week High and Tackles 91.00, 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, price action printed further outperformance in February, adding 1.8 percent.

Descending resistance (not considered traditional trendline resistance) governs the spotlight to the upside, etched from the high 118.66, whereas support inhabits 101.70.

Daily timeframe:

In the shape of five successive bullish candles—movement that overthrew the 200-day simple moving average and supply from 106.33/105.78—price action is touching gloves with supply priced at 107.58/106.85. Any downside reaction from this base is likely to retest the recently engulfed supply at 106.33/105.78 (possible demand).

While price action registered hefty gains in recent trading, the RSI indicator is testing overbought territory and forming bearish divergence.

H4 timeframe:

Resistance-turned support at 106.11 holding firm early Friday witnessed Monday cross swords with a Fib resistance cluster between 106.84 and 106.73 (green—shares space with the underside of daily supply at 107.58/106.85). Candlestick fans will also note the pair formed a shooting star pattern, generally viewed as a bearish signal at peaks.

H1 timeframe:

Leaving the 107 figure unchallenged, recent action rotated south and appears poised to retest 106.50 support and intersecting trendline support, etched from the low 105.06. Territory beneath here swings another trendline support, taken from the low 104.92, into the fray.

Although the unit continues to print modest higher highs, the RSI indicator is fluctuating around the lower side of overbought space.

Observed levels:

The stops taken above daily supply from 106.33/105.78, followed by a subsequent test of daily supply at 107.58/106.85, could be movement sellers draw to. This would, of course, go against monthly buying towards descending resistance.

The H4 timeframe testing a Fib resistance cluster between 106.84 and 106.73 is interesting, given its connection with daily supply mentioned above at 107.58/106.85. This could force a 106.50 test on the H1 and possibly even a breach—a move likely to be viewed as a short-term bearish signal to the lower H1 trendline support (104.92).

March 2nd 2021: DXY Clocks 3-Week High and Tackles 91.00, FP Markets

GBP/USD:

Monthly timeframe:

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

As seen from the monthly chart, the pendulum firmly swung in favour of buyers following December’s 2.5 percent advance—movement that stirred major trendline resistance (2.1161). February followed through to the upside and refreshed 2021 highs at 1.4241, levels not seen for three years.

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

Given February’s movement, 1.4376 represents the next upside objective.

Daily timeframe:

Last week established a decisive top a few pips south of Quasimodo resistance at 1.4250, prompting a sharp slump heading into the latter part of last week.

Support at 1.3755 is now in the firing line, a level sharing space with trendline support, drawn from the low 1.1409.

As highlighted in previous writing, RSI resistance made an entrance at 76.14, capping upside since late 2017. Subsequent downside flow has driven the indicator to within striking distance of the 50.00 centreline.

H4 timeframe:

Partly modified from previous analysis –

Trendline support-turned resistance, extended from the low 1.3566, giving way on Friday paved the way for a test of demand from 1.3942/1.3900 (previous supply). As you can see, buyers and sellers continue to square off around the aforesaid demand zone, with sellers appearing to have the upper hand at the moment. This hints at a test of support from 1.3852, with additional downside bringing light to familiar demand at 1.3761/1.3789 (fixed north of daily support mentioned above at 1.3755).

H1 timeframe:

Partly modified from previous analysis –

1.40 proved effective resistance in early trading Monday, withstanding two back-to-back upside attempts which led to the pair testing waters just ahead of the 1.39 figure.

Above 1.40, the 100-period simple moving average is seen circling 1.4042, while territory sub 1.39 unearths two Quasimodo supports at 1.3861 and 1.3847.

The RSI oscillator, as you can see, made its way from oversold terrain on Friday and has been circling the 50.00 centreline since.

Observed levels:

Partly modified from previous analysis –

Monthly flow suggests room to approach higher levels over the coming weeks until reaching the 1.4376 top. Before the above graces the charts, a retest of daily support at 1.3755 and intersecting trendline support could be on the cards, a move likely welcomed by dip-buyers.

H4 demand at 1.3942/1.3900 appears on thin ground, highlighting a short-term dip to H4 support at 1.3852 may be seen. Interestingly, this would draw H1 price through 1.39 bids (tripping stops) to test H1 Quasimodo supports at 1.3861 and 1.3847 (aligns with H4 support).

Therefore, the above may attract a short-term bearish theme in early trading, with a possible bullish defence entering the fight off 1.3850ish.

Any additional bearish flow could draw in H4 demand at 1.3761/1.3789, which happens to merge closely with daily support from 1.3755.

March 2nd 2021: DXY Clocks 3-Week High and Tackles 91.00, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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