April 14th 2021: Dollar Index Extends Bearish Presence South of 200-Day SMA Following Inflation Data

April 14th 2021: Dollar Index Extends Bearish Presence South of 200-Day SMA Following Inflation Data, FP Markets

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)

March carved out a third consecutive loss, extending the 2021 retracement slide by 2.8 percent. Recent underperformance, as you can see, pulled EUR/USD into the upper range of demand at 1.1857/1.1352.

April’s 1.8 percent rebound thus far shifts attention to the possibility of fresh 2021 peaks and a test of ascending resistance (prior support – 1.1641). Extending lower, on the other hand, shines the technical spotlight on trendline resistance-turned support, taken from the high 1.6038.

Based on trend studies, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

Trading primarily as a function of USD weakness, EUR/USD movement adopted a bullish phase Tuesday and consequently recorded fresh multi-week peaks. Resistance at 1.1966 is next in line, with a break unmasking additional resistance at 1.2058.

The 200-day simple moving average continues to echo supportive structure, following an upside breach in the second half of last week.

Despite the 2021 retracement slide, trend studies reveal the pair has been higher since early 2020.

RSI analysis shows upside momentum continues to gather traction, after the value swept through trendline resistance (taken from the peak 75.97) and formed a bullish failure swing (a sign of a potential reversal). Resistance is now in sight at 60.30.

H4 timeframe:

Following 1.1870 support serving well since early last week, Quasimodo resistance at 1.1937 came under fire on Tuesday, movement emphasising bullish intent.

With 1.1937 potentially out of the picture, bullish bets may take aim at resistance from 1.1990.

H1 timeframe:

The 100-period simple moving average at 1.1895, once again, delivered dynamic support on Tuesday. This led to a one-sided advance north of 1.19 to supply at 1.1956/1.1935.

1.1974/1.1965 supply is next in the firing range should buyers maintain a bullish trajectory today. Traders, however, are also urged to pencil in the possibility of a 1.1919 support retest.

Thanks to recent upside, RSI movement rebounded from trendline support, taken from the low 20.50, and has made its way to within touching distance of overbought space and RSI resistance plotted at 78.97.

Observed levels:

The technical view from the monthly scale implies a bullish theme could develop, given we’re coming from demand at 1.1857/1.1352. However, buyers face daily resistance at 1.1966, closely shadowed by H4 resistance at 1.1990.

With the above in view, a short-term bullish scenario may materialise today, taking out H1 supply at 1.1956/1.1935 and testing H1 supply at 1.1974/1.1965. It is the latter zone that sellers could make an appearance from, given this area shares chart space with daily resistance at 1.1966. Any bullish moves north of here, nevertheless, buyers could reach for the key figure 1.20 (and H4 resistance at 1.1990).

April 14th 2021: Dollar Index Extends Bearish Presence South of 200-Day SMA Following Inflation Data, 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 also came within striking distance of trendline resistance (prior support – 0.4776 high), sheltered under supply from 0.8303/0.8082.

March subsequently erased 1.5% over the Month and probed February’s lows. Should follow-through selling develop, 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:

Largely unchanged analysis from previous report.

Since 25th March, buyers and sellers have been squaring off around the 0.7563 February low, aided by a 1.272% Fib extension at 0.7545. Tuesday concluded in the shape of a bullish outside reversal (similar formation to a bullish engulfing pattern, though focuses on the range of the previous candle rather than the real body).

Resistance remains at 0.7817; a dip beneath 0.7563 brings light to demand from 0.7453/0.7384 (dovetailing closely with a 100% Fib expansion at 0.7465 and a 1.618% Fib extension at 0.7460). Technicians will also note the 200-day simple moving average circling nearby at 0.7408.

Trend studies reveal the unit has been higher since early 2020.

As for the RSI oscillator, the value remains reinforced off channel support, taken from the low 43.70, and nears the underside of 50.00.

H4 timeframe:

Declining US Treasury yields pressuring the buck lower Tuesday provided AUD/USD support, with enough force to bring light to trendline resistance, extended from the high 0.8007.

Also of technical importance is resistance at 0.7668, followed by supply at 0.7696/0.7715 and a 50.0% retracement at 0.7689.

Any decisive downside shines the technical spotlight on Quasimodo support at 0.7529, a level joined closely by a trendline resistance-turned support, taken from the high 0.7805.

H1 timeframe:

Heading into the early hours of US trading Tuesday, price movement speared through 0.76 to shake hands with a Fib cluster around 0.7586. Strong bids soaking up sell-stops south of 0.76 lifted the currency pair north of the 100-period simple moving average to 0.7650ish, adding 0.3 percent on the day.

Limited (obvious) resistance shifts technical interest to the 0.77 figure, a psychological base sheltered under supply drawn from 0.7716/0.7707 (an important decision point to initially push below 0.77).

Action out of the RSI oscillator reveals the value testing space just south of overbought territory, threatening moves to resistance at 80.85.

Observed levels:

Largely unchanged analysis from previous report.

From the bigger picture, the lack of buying interest from the 0.7563 February low on the daily scale may be due to monthly price pencilling in a bearish candlestick formation in February ahead of notable structure. This indicates sellers could eventually topple 0.7563 and challenge daily demand at 0.7453/0.7384.

In conjunction with higher timeframes, the H4 trendline resistance as well as H4 resistance at 0.7668 may be on the radar for short-term sellers today.

Should the unit spike to 0.77 on the H1, however, sellers may also show interest here as the psychological level aligns with H4 supply at 0.7696/0.7715.

April 14th 2021: Dollar Index Extends Bearish Presence South of 200-Day SMA Following Inflation Data, 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 marginally cut through descending resistance, etched from the high 118.66.

April, currently down 1.5 percent, is seen retesting the breached descending resistance, movement that may entice bullish flow. With respect to long-term upside targets, supply at 126.10/122.66 calls for attention.

Daily timeframe:

The US dollar notched up a second consecutive decline against the Japanese yen Tuesday, in line with US Treasury yields also dipping lower (the benchmark 10-year US Treasury yield ended lower by nearly 3 percent).

Despite supply at 110.94/110.29 limiting upside since the beginning of April, the monthly timeframe testing descending resistance-turned support places a question mark on further selling. Therefore, technically speaking, the collection of lows around 108.36ish (green oval) could limit downside moves.

Structure beyond said lows, however, shows demand coming in at 107.58/106.85 alongside trendline support, etched from the low 102.59.

In terms of trend on the daily scale, we have been decisively higher since early 2021.

RSI action journeyed beneath support at 57.00 in recent trading, implying that momentum remains firmly to the downside for the time being.

H4 timeframe:

Supply at 109.97/109.72 has stood firm in early trade this week, throwing light on a 78.6% Fib level at 108.95. Breaking south of here also shines light on demand at 108.31/108.50, an area not only joined by a Fib cluster between 108.44 and 108.66 (blue), it also holds lows highlighted on the daily scale around 108.36.

H1 timeframe:

Any USD/JPY upside was swiftly capped by the 100-period simple moving average on Tuesday, currently circling 109.47. Technical elements now show demand plotted at 108.86/108.98, with subsequent bearish flow highlighting demand at 108.60/108.71.

In addition to price action, RSI flow dipped a toe in oversold waters in recent hours, establishing an AB=CD formation (black arrows).

Observed levels:

Partly modified from previous analysis.

Having noted the monthly timeframe testing descending resistance-turned possible support, any selling may be short-lived. As such, overtaking lows around 108.36 on the daily scale, according to chart studies, is unlikely.

In light of where we’re coming from on the monthly timeframe, the 78.6% Fib level on the H4 at 108.95 and H1 demand at 108.86/108.98 could deliver a platform for buyers to work with.

H1 demand at 108.60/108.71 is also likely on the radar for traders, an area plotted just north of H4 demand at 108.31/108.50 (and shares space with the H4 Fib cluster at 108.44/108.66).

April 14th 2021: Dollar Index Extends Bearish Presence South of 200-Day SMA Following Inflation Data, 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. Contained within February’s range, however, March snapped a five-month winning streak and formed what candlestick enthusiasts call an inside candle pattern (represents a short-term consolidation with low volatility). A breakout lower in subsequent months would generally be viewed as a bearish signal.

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:

Partly modified from previous analysis.

Sterling wrapped up Tuesday off worst levels against a broadly weaker greenback; GBP/USD has staged a moderate comeback so far this week off March 25th Lows at 1.3670.

The technical arrangement present on the daily chart displays a Quasimodo support at 1.3609, a level connected with a 1.272% Fib expansion at 1.3617, and 1.618% as well as 1.272% Fib extension levels at 1.3614 and 1.3607, respectively.

With reference to trend, GBP/USD has been trending higher since early 2020.

The RSI failed to find acceptance north of the 50.00 centreline last week, though at the same time is reluctant to explore levels south of 40.00.

H4 timeframe:

Shorter-term flow on the H4 chart has support in play at 1.3680, delivering a floor to work with on Monday. Upside attempts have so far been limited by a 38.2% Fib level at 1.3763, as well as trendline support-turned resistance, taken from the low 1.3670.

External areas to be cognisant of are 1.3852 resistance and the Quasimodo support mentioned above on the daily timeframe at 1.3609.

H1 timeframe:

1.37 welcomed price action on Tuesday, fuelling a healthy bid into the US session (aided by RSI trendline support, taken from the low 27.58). As you can see, this elevated GBP/USD above the 100-period simple moving average to test the mettle of 1.3750 resistance.

Territory north of 1.3750 highlights resistance around the 1.38 figure, surrounded by a 1.272% Fib expansion at 1.3809 and a 50.0% retracement level at 1.3793. Beneath 1.37, the technical radar points to support at 1.3653.

Observed levels:

The daily timeframe’s Quasimodo support at 1.3609 is likely to remain on the watchlist for many traders. Not only is this considered stable structure, the neighbouring Fib confluence reinforces its technical presence.

Across the page on the lower timeframes, H4 is attempting to overthrow a 38.2% Fib level at 1.3763, while H1 is battling 1.3750 resistance. A firm H1 close above 1.3750 may be enough to tempt breakout buying to around 1.38. Equally interesting, this psychological area may be sufficient to hold back buyers, given the level shares space with H1 Fib levels and also unites with H4 trendline support-turned resistance.

April 14th 2021: Dollar Index Extends Bearish Presence South of 200-Day SMA Following Inflation Data, FP Markets

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  • April 14th 2021: Dollar Index Extends Bearish Presence South of 200-Day SMA Following Inflation Data, FP Markets
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