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October 21st 2021: Dollar Index Testing Daily Support at 92.71-93.53

October 21st 2021: Dollar Index Testing Daily Support at 92.71-93.53, FP Markets

Charts: Trading View

EUR/USD:

(Italics: previous analysis)

Weekly timeframe:

Prime support at $1.1473-1.1583 remains a focal point on the weekly scale, an area inviting a bullish phase so far this week. Potentially fuelled on the back of long-term sell-stops tripped beneath lows at $1.1612 (2020), $1.1981-1.1848 supply is recognised as the next upside objective on this scale.

In the event buyers fail to agree higher prices, south of current support shines the technical spotlight on a 61.8% Fibonacci retracement at $1.1281.

Daily timeframe:

Aiding the weekly timeframe’s bullish presence, Wednesday eked out a third consecutive gain and hardened its position north of support from $1.1614. Consequently, Quasimodo support-turned resistance at $1.1689 is in the spotlight, which happens to share chart space with trendline resistance, taken from the high $1.2254.

The relative strength index (RSI) voyaged above the 50.00 centreline, informing traders average gains exceed average losses and momentum is to the upside.

In terms of trend, sentiment has favoured downside since June.

H4 timeframe:

The reaction from resistance at $1.1665 watched Wednesday shake hands with support from $1.1622, set a touch above a 38.2% Fibonacci retracement at $1.1615. As you can see, the session concluded within touching distance of the $1.1665 resistance, a level that’s reinforced by a 61.8% Fibonacci retracement at $1.1668, a 38.2% Fibonacci retracement at $1.1672 and a 100% Fibonacci projection at $1.1673.

Space above current resistance has the daily resistance at $1.1689.

H1 timeframe:

Arranged directly above a modest Fibonacci cluster—made up of a 61.8% Fibonacci retracement at $1.1609 and a 100% Fibonacci projection at $1.1611, as well as a trendline support, taken from the low $1.1525—supply-turned demand at $1.1628-1.1615 welcomed price action on Wednesday and delivered buyers a floor to work with.

H4 resistance mentioned above at $1.1665 remains the biggest challenge to the upside for now, with a break looking at the daily timeframe’s resistance, also noted above at $1.1689, and then the $1.17 figure applied to the H1.

Observed Technical Levels:

The weekly timeframe’s prime support at $1.1473-1.1583 commanding a presence, along with the daily timeframe’s RSI stepping above its 50.00 centreline, places a question mark on daily resistance at $1.1689.

The above, therefore, echoes a bullish climate, with H4 resistance at $1.1665 unlikely to offer much of a ceiling on a second test. With that, a bullish breakout scenario could unfold north of the noted resistance, targeting the $1.17ish region (H1).

October 21st 2021: Dollar Index Testing Daily Support at 92.71-93.53, FP Markets

AUD/USD:

(Italics: previous analysis)

Weekly timeframe:

AUD/USD bulls continue to pursue higher levels, following September’s test of prime support from $0.6968-0.7242. Prime resistance at $0.7849-0.7599 represents a reasonable target.

Trend studies on the weekly scale show we’ve been higher since early 2020. Consequently, the response from $0.6968-0.7242 might be the start of a dip-buying attempt to join the current trend.

Daily timeframe:

Elevated amidst healthy risk appetite, the Australian dollar pencilled in another green candle against its US counterpart on Wednesday.

Yesterday’s spirited move places Quasimodo support-turned resistance at $0.7621 within touching distance, dovetailing closely with the 200-day simple moving average at $0.7564, as well as a 61.8% Fibonacci retracement at $0.7585 and a 100% Fibonacci projection at $0.7551.

Interestingly, the noted resistance between $0.7621 and $0.7551 is fastened to the lower boundary of weekly prime resistance mentioned above at $0.7849-0.7599.

The relative strength index (RSI) appears poised to cross swords with indicator resistance at 74.80, nestled within overbought territory.

H4 timeframe:

With 3rd September high at $0.7478 overwhelmed, a stop-fuelled rally is likely in play, despite recent upside touching gloves with supply from $0.7535-0.7507, drawn alongside a 1.272% Fibonacci projection at $0.7529 and a 1.618% Fibonacci projection from $0.7516.

Above current supply opens the door to daily resistance mentioned above between $0.7621 and $0.7551. Any downside reaction (unlikely given higher timeframes right now) has trendline support to target, drawn from the low $0.7226.

H1 timeframe:

The $0.7548-0.7541 decision point is now on the radar, following Wednesday overwhelming $0.75 offers heading into the US session.

Traders may note $0.7548-0.7541 is plotted just south of the daily timeframe’s 100% Fibonacci projection at $0.7551, and just above the H4 timeframe’s decision point from $0.7535-0.7507.

Observed Technical Levels:

Weekly, daily and H1 timeframes shows scope to explore higher levels, questioning the validity of H4 supply at $0.7535-0.7507 and placing the spotlight on a possible run to the H1 decision point at $0.7548-0.7541 and the daily 100% Fibonacci projection at $0.7551.

A retest of $0.75 on the H1, therefore, could be seen as a high-probability dip-buying opportunity.

October 21st 2021: Dollar Index Testing Daily Support at 92.71-93.53, FP Markets

USD/JPY:

(Italics: previous analysis)

Weekly timeframe:

Nestled at the underside of resistance from ¥114.38, USD/JPY registered its sixth consecutive bullish close last week and touched a fresh three-year peak of ¥114.70 in recent trading.

Although current price threatens to form fresh highs, a decisive reaction from resistance sets the stage for bringing in support at ¥112.16.

In terms of trend, we’ve been advancing since the beginning of this year.

Daily timeframe:

Latest out of the daily chart reveals price action connected with a Fibonacci cluster, made up of two 1.272% Fibonacci projections at ¥114.63 and ¥114.61, a handful of pips beneath a deep 78.6% Fibonacci retracement at ¥114.94.

The noted area, along with weekly resistance highlighted above at ¥114.38, is a potential headwind for the currency pair.

From the relative strength index (RSI), following support emerging from 56.85 (prior range resistance), the indicator’s value continues exploring overbought space. However, with the trend facing northbound this year, overbought signals should be viewed in this context.

H4 timeframe:

Wednesday touching fresh pinnacles consequently challenged the recently formed ascending triangle’s (low: ¥113 high: ¥113.79) profit objective (thick black arrows) at ¥114.64, and came within a stone’s throw from testing familiar channel resistance, taken from the high ¥112.05.

Yesterday witnessed price step lower, action that could eventually retest the upper side of the ascending triangle, with additional selling interest directing light towards channel support, pencilled in from the low ¥109.12.

H1 timeframe:

Fading daily Fibonacci resistance noted above at ¥114.61, short-term flow based on the H1 chart is back within touching distance of ¥114 and neighbouring decision point at ¥113.84-113.96.

Subsequent downside casts light on another decision point from ¥113.59-113.70.

Observed Technical Levels:

Weekly resistance at ¥114.38, together with the daily timeframe’s Fibonacci cluster between ¥114.94 and ¥114.61, delivers notable resistance and has (so far) slowed buying.

Irrespective of noted resistances, dip-buyers will likely be eyeballing the H1 timeframe’s ¥114 psychological level and nearby decision point at ¥113.84-113.96, set a few pips above the upper side of the H4 ascending triangle.

 October 21st 2021: Dollar Index Testing Daily Support at 92.71-93.53, FP Markets

GBP/USD:

(Italics: previous analysis)

Weekly timeframe:

Despite dipping a toe south of supply-turned demand at $1.3629-1.3456 in late September, and closing under a double-top pattern’s ($1.4241) neckline at $1.3669, GBP/USD bulls have been on a tear in October, up 2.6 percent MTD.

Should sellers regain consciousness, the double-top pattern’s profit objective—measured by taking the distance between the highest peak to the neckline and extending this value lower from the breakout point—sits around $1.3093.

Daily timeframe:

As you can see, price inched above trendline resistance on Wednesday, taken from the high $1.4250, and is now on the doorstep of the 200-day simple moving average at $1.3845.

The relative strength index (RSI) secured position above the 50.00 centreline last week, with the indicator currently eyeballing overbought space.

H4 timeframe:

Despite the daily timeframe’s trendline resistance stepping aside, channel resistance on the H4 scale, drawn from the high $1.3640, remains active, alongside a nearby a 1.272% Fibonacci extension at $1.3839.

North of here, Quasimodo resistance is seen at $1.3888, while below technicians are likely watching channel support, taken from the low $1.3415.

H1 timeframe:

A Fibonacci cluster made its way into the spotlight yesterday between $1.3750 and $1.3756 (note the 50.00% is not a Fibonacci value), providing the market a floor of support. Subsequent upside going into US hours travelled above the $1.38 figure, throwing light on resistance from $1.3851.

Below the noted Fibonacci area, $1.37 is on the radar, along with a trendline support, etched from the low $1.3433.

Observed Technical Levels:                              

The daily timeframe closing above trendline resistance is likely a concern for weekly shorts based on price closing under a double-top pattern’s ($1.4241) neckline at $1.3669.

It’ll be interesting to see if resistance between the H4 timeframe’s Quasimodo resistance at $1.3888 and H1 resistance from $1.3851 can withstand a bullish push.

Nevertheless, a daily close above the 200-day simple moving average at $1.3845 is perhaps enough for current shorts to consider closing positions.

October 21st 2021: Dollar Index Testing Daily Support at 92.71-93.53, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • October 21st 2021: Dollar Index Testing Daily Support at 92.71-93.53, FP Markets
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