March 3rd 2021: Risk Currencies Gain; DXY Caps Gains Around 91.00

March 3rd 2021: Risk Currencies Gain; DXY Caps Gains Around 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:

Tuesday crossed paths with demand from 1.1923/1.2001, an area housing support at 1.1965 (a previous Quasimodo resistance), which, aided by the broad USD softness (DXY < 91.00), stirred a healthy bullish response.

The technical view from the RSI reveals the value treading water a touch under the 50.00 centreline, with resistance parked relatively nearby at 60.30.

H4 timeframe:

In order to reach the upper side of daily demand at 1.1923/1.2001, a whipsaw through H4 demand at 1.2019/1.2037 emerged. H4 buyers out of the said H4 demand were likely squeezed out of the market yesterday, with daily bids from daily demand welcoming sell-stops south of the H4 zone.

Tuesday’s bullish showing, as you can see, shifted technical interest to trendline support-turned resistance, an ascending line drawn from the low 1.1952.

H1 timeframe:

1.20, as expected, proved an effective level of support, withstanding a modest downside attempt during the early hours of London on Tuesday. Thanks to the reasonably forceful advance, price elbowed to within striking distance of the 1.21 figure, accompanied by the 100-period simple moving average, currently circling 1.2108.

The RSI, following an earlier bounce from oversold terrain, made its way into overbought territory in recent hours, consequently shining light on resistance at 78.97.

Observed levels:

The rebound from daily demand at 1.1923/1.2001 is interesting and may command further buying today.

However, shorter-term action recently unearthed 1.21 resistance on the H1 scale, along with the 100-period simple moving average, and H4 trendline resistance. As a result, sellers could make an entrance from the 1.21 region today and attempt to hold back daily buyers. This may also have H1 and H4 sellers seek bearish candlestick confirmation before pulling the trigger.

March 3rd 2021: Risk Currencies Gain; DXY Caps Gains Around 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:

Holding back selling interest from the monthly timeframe’s bearish candlestick formation is daily trendline support, taken from the low 0.5506.

As you can see, this week has chalked up two bac-to-back bullish candles off the trendline support, threatening a possible retest of supply from 0.8045/0.7985.

Beyond trendline support, the technical light shines on February 2nd low at 0.7563, with a break 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:

Tuesday’s outperformance hauled AUD/USD above resistance at 0.7805 (now a serving support level), bolstered on the back of renewed USD softness.

Demand-turned supply from 0.7848/0.7867 is now in the firing line, an area sharing space with a 50.0% retracement at 0.7849 and a 127.2% Fib extension at 0.7856.

H1 timeframe:

US traders toppled the 0.78 figure yesterday, unlocking the gates for a test of the 100-period simple moving average at 0.7826.

Scope for further outperformance is seen on the H1 scale. Aside from 0.7850 resistance, a run towards the 0.79 figure is possible. Traders may also note that to the left of price action (yellow), supply is relatively thin.

The technical picture out of the RSI shows the value touched overbought levels and is currently seen mildly topping. Downside from this point could have the indicator unite with trendline support around the 55.00 neighbourhood.

Observed levels:

0.7850 resistance on the H1, backed by H4 supply at 0.7848/0.7867 and associated Fibs, could encourage bearish interest today.

Although any bearish scenario trades in line with the monthly timeframe’s candlestick pattern, traders must still acknowledge we have been trending higher since early 2020 and recently staged a modest comeback off daily trendline support.

March 3rd 2021: Risk Currencies Gain; DXY Caps Gains Around 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:

Snapping a five-day bullish wave (movement that overthrew the 200-day simple moving average and supply from 106.33/105.78), Tuesday, in the shape of a shooting star candle pattern, tested the lower side of supply coming in at 107.58/106.85.

Amid Tuesday’s risk-off trading and broad softening of the US dollar, a 106.33/105.78 retest could take shape.

The RSI indicator continues to challenge overbought territory and shape bearish divergence.

H4 timeframe:

As you can see, the Fib resistance cluster between 106.84 and 106.73 (green—shares space with the underside of daily supply at 107.58/106.85) still has a hand in this fight, despite refreshing six-month highs at 106.95. What’s interesting about this Fib zone is the fact it joins hands with daily supply from 107.58/106.85.

Support at 106.11 resides as the next possible downside objective, having seen limited demand to the left of price.

H1 timeframe:

As evident from the H1 scale this morning, we can see price hit the brakes and turned just south of the 107 figure on Tuesday. Consequently, we’re now within a stone’s throw from shaking hands with 106.50 support—a level intersecting with trendline support, taken from the low 104.92, and the 100-period simple moving average.

Either 106.50 will be an area buyers welcome, or a base sellers overthrow to suggest moves towards the 106 region.

In terms of where we stand on the RSI indicator, the value currently tracks terrain south of the 50.00 centreline, implying a visit to oversold conditions is on the menu today.

Observed levels:

Partly modified from previous analysis –

Stops taken above daily supply from 106.33/105.78, followed by a subsequent test of daily supply at 107.58/106.85 and the recent formation of a shooting star, could be movement sellers draw to. This would, of course, go against monthly buying towards descending resistance.

Short-term charts suggest a possible dip to deeper water, in line with the daily scale, testing at least the 106.50 support on the H1. However, a break through here may fuel additional selling towards the 106 figure (fixed within daily demand at 106.33/105.78).

March 3rd 2021: Risk Currencies Gain; DXY Caps Gains Around 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:

Brought forward from previous analysis –

Limited change was observed Tuesday, despite eking out modest gains (0.2 percent).

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:

Recent flow forged a bottom a whisker north of support drawn from 1.3852, accompanied by a neighbouring 61.8% Fib level at 1.3824. Also technically noteworthy is demand pencilled in from 1.3761/1.3789 and trendline support-turned resistance, taken from the low 1.3566.

H1 timeframe:

Confirmed by mild RSI bullish divergence, Quasimodo support at 1.3861 (plotted close by another Quasimodo support at 1.3847) made a show. Following price reclaiming 1.39+ status, the unit retested the latter as support heading into US hours and touched highs ahead of the widely watched 1.40 resistance, joined by a 100-period simple moving average at 1.3988.

Observed levels:

Short-term action suggests price could visit 1.40 on the H1, reinforced by the 100-period simple moving average. Sellers may be drawn to this area, particularly after last week’s decisive retracement.

On the bigger picture, as noted in previous writing, monthly 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.

March 3rd 2021: Risk Currencies Gain; DXY Caps Gains Around 91.00, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • March 3rd 2021: Risk Currencies Gain; DXY Caps Gains Around 91.00, FP Markets
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