Charts: Trading View

US Dollar Index (Daily Timeframe):

(Italics: previous analysis)

Versus a basket of six international currencies, the US dollar booked gains last week. Snapping a two-week bearish phase, the index navigated to within a stone’s throw of 2021 pinnacles at 94.56.

For those who read the previous weekly insight you may recall the following (italics):

Support at 93.90 (since removed), as well as the decision point from 92.71-93.53 and intersecting trendline support, are likely to be monitored this week for signs of dip-buying.

Evidenced from the chart, price action shook hands with the aforementioned supports, to which a stronger-than-expected recovery unfolded Friday. Resistance at 94.65 deserves notice this week, drawn from 9^th March (2020) low and arranged just north of 2021 tops. Breaching resistance unmasks additional resistance from 95.86.

With reference to trend, the index has established a series of higher highs and higher lows since price made contact with support from 89.69 in May.

In conjunction with trend bias, the relative strength index (RSI)—a popular momentum gauge—defended support between 40.00 and 50.00 (commonly seen within trending environments). Informing traders momentum is to the upside, maintaining position north of 50.00 will likely be interpreted as a sign of strength until connecting with overbought space.

• Resistance at 94.65 is a key watch this week. Rupturing the latter signals further outperformance to resistance at 95.86.

EUR/USD:

(Italics: previous analysis)

Weekly timeframe:

Confidence in prime support at $1.1473-1.1583 received a blow last week. EUR/USD abandoned hopes of higher levels at $1.1692 and, shaped by way of a bearish outside reversal candle, burrowed into the aforementioned support.

$1.1981-1.1848 supply is recognised as the next upside objective should buyers regain dominance, yet further underperformance shines the technical spotlight on a 61.8% Fibonacci retracement at $1.1281.

Daily timeframe:

The tail end of the week watched price bump heads with Quasimodo support-turned resistance at $1.1689, and trendline resistance, taken from the high $1.2254. This guided the currency pair sharply lower (-1.0 percent) Friday to within reach of Fibonacci support between $1.1420 and $1.1522. Interestingly, noted support is fastened to the lower side of weekly support.

Sentiment has favoured downside since June, which is currently in line with the relative strength index (RSI), elbowing back under the 50.00 centreline from a top of 56.05. South of 50.00 shows average losses outweigh average gains, directing light to a possible test of oversold this week.

H4 timeframe:

Friday’s precipitous decline, although swallowing a number of key supports, discovered some late relief from Quasimodo support coming in at $1.1541, assembled above support from $1.1495. Extending recovery gains this week swings the pendulum in favour of reaching resistance at $1.1584.

The $1.1636-1.1620 decision point is also worthy of attention in the event bulls take the wheel, joined by resistance at $1.1622.

H1 timeframe:

Bids surfacing just ahead of Quasimodo support at $1.1533 amid US hours Friday had price recoil modestly higher into the closing bell. Technicians may acknowledge the noted support is set just above the daily Fibonacci support at $1.1420-1.1522, with the H1 timeframe displaying the $1.15 figure.

As highlighted, H4 resistance at $1.1584 calls for attention to the upside, though based on the H1 we can see the horizontal line shares chart space with Quasimodo support-turned resistance at $1.1592, a 38.2% Fibonacci retracement at $1.1595 and the $1.16 figure.

Although $1.16-1.1584 delivers reasonable confluence, prime resistance $1.1628-1.1619 also warrants attention, sheltered beneath a 61.8% Fibonacci retracement at $1.1631.

Observed Technical Levels:

Long term:

The weekly timeframe’s bearish outside reversal implies prime support at $1.1473-1.1583 is vulnerable. However, before pulling the bearish trigger, Fibonacci support between $1.1420 and $1.1522 on the daily timeframe could still prove challenging for sellers.

$1.1420-1.1522, therefore, is a key base this week.

Short term:

In light of the bearish vibe, H1 resistance between $1.16-1.1584 serves a platform for sellers to work with early week, assuming price continues to defend H4 Quasimodo support at $1.1541.

Breakout sellers beneath H1 Quasimodo support from $1.1533 are urged to tread carefully, as sitting ten pips below is the daily timeframe’s Fibonacci support at $1.1420-1.1522.

AUD/USD:

(Italics: previous analysis)

Weekly timeframe:

Since departing from prime support from $0.6968-0.7242 at the end of September, AUD/USD bulls forged a fifth consecutive week in the green, bound for prime resistance at $0.7849-0.7599.

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 uptrend (since early 2020), perhaps eventually overrunning $0.6968-0.7242 and challenging the yearly top at $0.8007.

Daily timeframe:

Resistance between $0.7621 and $0.7551—composed of a Quasimodo support-turned resistance at $0.7621, the 200-day simple moving average at $0.7556, as well as a 61.8% Fibonacci retracement at $0.7585 and a 100% Fibonacci projection at $0.7551—made an entrance on Thursday and sponsored a mild bearish phase Friday.

Interestingly, noted resistance is fastened to the lower boundary of weekly prime resistance mentioned above at $0.7849-0.7599. As a result, sellers could continue to defend $0.7621-0.7551 this week and perhaps drop in on the 38.2% Fibonacci retracement at $0.7379 and, with a little oomph, maybe the 61.8% Fibonacci retracement from $0.7271.

The relative strength index (RSI) welcomed overbought territory last week, adding weight to current price resistance and highlighting indicator resistance at 74.80. However, with respect to trend on the daily scale, recent action probed fresh highs, helping to confirm the current upside bias.

H4 timeframe:

According to the H4 scale, price movement stepped to near-five-month highs at $0.7555 in the second half of the week and pencilled in a mild retracement.

Trendline support, taken from the low $0.7170, along with Quasimodo resistance-turned support at $0.7443 and prime support at $0.7397-0.7435, are areas of interest to the downside this week. Upstream shines light on Quasimodo resistance from $0.7599.

H1 timeframe:

Following a $0.7548-0.7541 decision point breach Thursday, Friday withdrew to $0.75 and, as expected, discovered support. Continued support early week reveals a decision point at $0.7585-0.7567 as a reasonable target.

Failure to find acceptance at higher levels, a $0.75 break uncovers Quasimodo resistance-turned support from $0.7456. Note that a $0.75 break helps validate bearish intent from daily resistance.

Observed Technical Levels:

Long term:

Scope to discover higher terrain remains on the weekly scale until reaching prime resistance at $0.7849-0.7599. Nevertheless, pasted to the lower side of this zone is active daily resistance at $0.7621-0.7551, which may be enough to persuade a bearish theme this week.

Short term:

$0.75 is crucial in early trade this week.

Upside from this level suggests the unit is headed for the H1 decision point at $0.7585-0.7567 or H4 Quasimodo resistance from $0.7599, which represents the lower side of weekly prime resistance.

Navigating sub $0.75, however, hints at a run to H1 Quasimodo resistance-turned support at $0.7456, organised just above H4 trendline support and H4 Quasimodo resistance-turned support at $0.7443.

USD/JPY:

(Italics: previous analysis)

Weekly timeframe:

Mid-October had candle action embrace resistance from ¥114.38 and touch a fresh three-year peak of ¥114.70. Violating the noted resistance may excite long-term bulls and highlight a 1.272% Fibonacci projection from ¥116.09.

Capping upside attempts since May 2017, ¥114.38 is considered ‘significant’ resistance in this market; bearish interest 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:

The Fibonacci cluster, made up of two 1.272% Fibonacci projections at ¥114.63 and ¥114.61, set a handful of pips beneath a deep 78.6% Fibonacci retracement at ¥114.94, continues to command attention on the daily timeframe. The noted resistance area, along with weekly resistance highlighted above at ¥114.38, is clearly a headwind for the currency pair right now.

Supply-turned demand at ¥112.66-112.07 is set as the next downside target, shadowed by a decision point coming in from ¥111.18-111.79.

From the relative strength index (RSI), the indicator’s value exited overbought space and appears poised to retest 56.85 support this week—prior range resistance.

H4 timeframe:

Local trendline resistance, drawn from yearly tops at ¥114.70, received price action in closing trade Friday. This followed an earlier recovery from the ¥113.28-113.55 decision point—note the latter had its lower boundary clipped on Thursday.

Breaking local trendline resistance may liberate buyers, building a foundation for an approach to Quasimodo resistance at ¥114.46 and trendline support-turned resistance, taken from the low ¥109.12.

H1 timeframe:

US hours Friday saw ¥114 whipsawed to the upside, running stops and touching a high of ¥114.10.

Fibonacci enthusiasts will note a modest cluster at ¥114.14, composed of a 1.618% Fibonacci projection and a 61.8% Fibonacci retracement. 1.618 is defined as a ‘golden ratio’, a value often delivering support and resistance in markets.

Having short-term flow close sub ¥114, support at ¥113.84 is seen, a level converging with local trendline support, taken from the low ¥113.26.

Observed Technical Levels:

Long term:

Weekly resistance at ¥114.38 represents a fundamental level, reinforced by the daily timeframe’s Fibonacci structure at ¥114.61.

Weakness will bring attention to daily supply-turned demand at ¥112.66-112.07.

Strength points to continuation buying, targeting the weekly timeframe’s 1.272% Fibonacci projection from ¥116.09.

Short term:

Local trendline resistance on the H4 giving way early week sponsors a bullish theme to Quasimodo resistance at ¥114.46, placing a question mark on higher timeframe resistances and somewhat confirming the current uptrend. By extension, this might bring in a test of H1 support from ¥113.84, offering a dip-buying opportunity.

The flip side, of course, is nudging lower from H4 trendline resistance and H1 penetrating noted support. The H4 decision point at ¥113.28-113.55 in this case serves as a downside objective, followed by H1 Quasimodo support at ¥113.20.

GBP/USD:

(Italics: previous analysis)

Weekly timeframe:

From a technical standpoint, 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, unshackles a potential bearish scenario, long term.  

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.

Trend on the weekly timeframe, nonetheless, has displayed an upside bias since pandemic lows in early 2020.

Daily timeframe:

Corroborating the weekly timeframe’s downside bias is price action on the daily timeframe acquiring acceptance at trendline resistance, taken from the high $1.4250. Sheltered beneath a 200-day simple moving average at $1.3848, additional deterioration this week has support from $1.3602 to target.

The relative strength index (RSI) shows weakening upside momentum, dipping beneath the 50.00 centreline. Cementing position below here possibly throws oversold space in the mix.

With reference to current trend, despite the weekly timeframe eyeing higher levels, sentiment is directed lower for now on the daily timeframe, shaped in the form of lower highs and lower lows from June 1^st top at $1.4250.

H4 timeframe:

Bonding with daily trendline resistance, the second half of the week observed price sharply descend from trendline support-turned resistance, drawn from the low $1.3415.

$1.3657 presents immediate support this week, with support at $1.3570 ready to welcome price in the event of further selling. Note that $1.3657 is joined by a number of Fibonacci ratios between $1.3658 and $1.3679.

H1 timeframe:

Weighty selling heading into Friday’s US trading session guided price action beneath $1.37, touching a low of $1.3668.

$1.3714-1.3702 serves as a decision point above $1.37, which happens to converge with resistance at $1.3709. H4 support from $1.3657 also commands attention on the H1 scale.

Observed Technical Levels:                      

Long term:

Daily trendline resistance, taken from the high $1.4250, controlling position last week signals a bearish scene could evolve to daily support coming in at $1.3602. this is supported by the technical landscape on the weekly timeframe.

Short term:

In observance of the bigger picture, the H1 timeframe’s decision point at $1.3714-1.3702, along with resistance at $1.3709, may entice a short-term bearish scenario, targeting H4 support from $1.3657.

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