February 11th 2021: DXY Finding Respite Ahead of 90.00; EUR, GBP and AUD off Best Levels

February 11th 2021: DXY Finding Respite Ahead of 90.00; EUR, GBP and AUD off Best Levels, 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 has witnessed a healthy floor of bids emerge around the 1.1950 neighbourhood, consequently provoking a hammer formation (though we will not know this until the month concludes).

To the downside, 1.1857/1.1352 represents demand, while northbound shines the technical spotlight on ascending resistance (prior support – 1.1641).

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:

Largely unchanged from previous analysis –

The combination of demand at 1.1923/1.2001 and support at 1.1965 (previous Quasimodo resistance), has so far served buyers well.

As you can see, Wednesday modestly built on recent upside, with price action closing in on 1.2190 tops, followed by Quasimodo resistance from 1.2278.

Technicians are also urged to chalk up support at 1.1887, realised a touch south of the aforesaid demand area.

With reference to the RSI indicator, the value (currently trades at 52.00) is on the doorstep of RSI trendline resistance and neighbouring RSI resistance at 60.30.

H4 timeframe:

H4 shook hands with Quasimodo resistance priced in at 1.2142, a base aligning with a 78.6% Fib level at 1.2138 and a 50.0% retracement at 1.2149. Space above may also call for resistance at 1.2179.

In the event sellers make a show from current resistance, a dive to support at 1.2057 could be in store.

H1 timeframe:

Buyers and sellers spent Wednesday squaring off around supply at 1.2136/1.2119. While the majority of offers appear to have been cleared, H4 Quasimodo resistance mentioned above at 1.2142 has proven an effective ceiling and guided H1 below a local trendline support (1.1953)—a move potentially prompting a sell-off to 1.21 support.

RSI movement recently dipped a toe south of support at 52.09 (ahead of the 50.00 centreline).

Observed levels:

For those who read Wednesday’s technical writing you may recall the following (italics):

Monthly, daily and H4 price action, according to our chart studies, call for higher levels. In light of this, H1 supply and descending resistance are perhaps fragile. Anyone feel a fakeout of H1 stops to test the H4 Quasimodo level could be on the menu?

As evident from H4 and H1 charts, a fakeout above H1 supply at 1.2136/1.2119 into offers at H4 Quasimodo resistance from 1.2142 appears to have occurred. Though given daily and monthly timeframes demonstrate room to advance, 1.21 support on the H1 could provide a platform for buyers to re-enter the fight.

February 11th 2021: DXY Finding Respite Ahead of 90.00; EUR, GBP and AUD off Best Levels, FP Markets

AUD/USD:

Monthly timeframe:

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

January’s half-hearted shooting star candle (often interpreted as a bearish signal at peaks) has so far failed to seduce sellers. February, as you can see, trades around session highs, up by about 1.1 percent.

This brings light to 0.8303/0.8082—a supply zone aligning closely with trendline resistance (prior support – 0.4776). In the event sellers regain consciousness, long-term demand resides at 0.7029/0.6664 (prior supply).

In the context of trend, the primary downtrend (since mid-2011) remains south until breaking 0.8135 (January high [2018]).

Daily timeframe:

Partly modified from previous analysis –

Buyers stepped aside on Wednesday amidst a USD pullback (DXY off worst levels).

Despite the modest correction, a move that snapped a three-day recovery from trendline support (0.5506), offers appear relatively thin until 0.7782 tops, along with the 2021 peak at 0.7820.

RSI flow is seen mildly topping south of RSI trendline resistance, with further downside to possibly touch gloves with the 50.00 centreline.

H4 timeframe:

In spite of numerous upside attempts, a healthy pocket of offers capped buying on Wednesday at Quasimodo resistance drawn from 0.7747.

Sellers have since strengthened their grip and appear poised to cross swords with support at 0.7698—a prior Quasimodo resistance level.

H1 timeframe:

The combination of Quasimodo resistance at 0.7754 and 0.7750 resistance directed price lower on Wednesday. Technical elements, therefore, point to a potential 0.77 retest today, which happens to share space with a neighbouring 100-period simple moving average around 0.7687, and a 38.2% Fib level at 0.7688.

Recent movement out of the RSI indicator reveals momentum dipped beneath the 50.00 centreline, suggesting a push for oversold space could be on the cards.

Observed levels:

With monthly action currently on the front foot and daily flow holding north of trendline support (albeit modestly correcting Wednesday), a test of H4 support at 0.7698—a previous Quasimodo resistance—and 0.77 support on the H1 could encourage buyers today.

February 11th 2021: DXY Finding Respite Ahead of 90.00; EUR, GBP and AUD off Best Levels, FP Markets

USD/JPY:

Monthly timeframe:

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

Since January snapped a four-month bearish phase in the shape of a bullish engulfing candle, buyers have struggled to find acceptance at higher levels. Consequent to this, February currently trades off best levels.

Resistance can be seen in the form of a descending line (not considered traditional trendline resistance), etched from the high 118.66, whereas follow-through weakness shifts focus to support at 101.70.

Daily timeframe:

Largely unchanged from previous analysis –

Wednesday exhibited a pretty much even session, generating an indecision doji candlestick formation (between a 104.84 high and a 104.40 low).

This follows the recent rejection from the lower side of supply at 106.33/105.78 and 200-day simple moving average at 105.55. Further selling could eventually pull things to trendline resistance-turned support, pencilled in from the high 111.71.

Technical eyes may also be drawn to the RSI indicator, as the value tunnelled through both support at 57.00 and trendline support.

H4 timeframe:

Tuesday’s depreciation, as underlined in previous writing, landed Wednesday at the 38.2% Fib level taken from 104.50, representing the initial take-profit objective from the alternate AB=CD resistance at 105.63.

Additional selling highlights possible bids around trendline support (102.59), together with nearby support at 104.16.

H1 timeframe:

A whipsaw through 104.50 support took shape on Wednesday, likely squeezing some buyers out of the market and simultaneously generating a bear trap. Nevertheless, demand at 104.21/104.37 remains lying in wait, while upside movement could propel the unit towards the 105 figure, closely shadowed by resistance at 105.14 and the 100-period simple moving average.

RSI flow failed to find acceptance north of the 50.00 centreline yesterday, suggesting buyers unlikely have enough fuel to take things higher right now.

Observed levels:

Largely unchanged from previous analysis –

The daily timeframe’s flow implies longer-term sellers still have the upper hand until crossing swords with trendline support around the 103.70 neighbourhood.

Short term, however, buyers could still look to take this currency pair higher. As underscored in Wednesday’s writing, buyers may be drawn to a whipsaw through 104.50 bids on the H1 which may snag fresh bids off H1 demand at 104.21/104.37. Should this come to fruition, upside targets fall in around the 105 region (H1).

February 11th 2021: DXY Finding Respite Ahead of 90.00; EUR, GBP and AUD off Best Levels, FP Markets

GBP/USD:

Monthly timeframe:

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

Following December’s 2.5 percent advance—movement that stirred major trendline resistance (2.1161)—February recently refreshed multi-month highs at 1.3819.

In terms of trend, the primary trend has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way—April high, 2018. In effect, the aforesaid high represents the next upside objective on the monthly chart.

Daily timeframe:

Partly modified from previous analysis –

After a spirited climb above resistance at 1.3755—momentum that saw Tuesday close at session peaks—Wednesday responded by way of a shooting star, a candlestick pattern generally viewed as a bearish signal at peaks.

A follow-through move to the downside could retest 1.3755 as support, though a bounce higher has supply at 1.3996/1.3918 to target.

Interestingly, the RSI indicator is seen touching gloves with the upper edge of a 3-month range between support around 47.00 and resistance at the 66.00 region (the value stands at 64.80). It is common to see higher oversold support areas form in an uptrend.

H4 timeframe:

The pair retesting 1.3763 as support Tuesday led Wednesday to fresh 2021 pinnacles at 1.3866, and at the same time shook hands with resistance at 1.3852, a previous Quasimodo support.

As evident from the chart, sellers have certainly made a show though whether the move contains enough force to retest 1.3763 is difficult to estimate.

H1 timeframe:

In conjunction with the H4 timeframe, the H1 chart also crossed paths with a moderate Fib cluster (resistance) around 1.3850 (made up of a 161.8% Fib projection at 1.3850 and a 100% Fib extension at 1.3855).

Holding off the Fib arrangement calls for a possible 1.38 retest today, with a break possibly leading to 1.3751 support—a prior Quasimodo resistance.

Notably on the RSI indicator, the value nudged beneath trendline support and is on the verge of connecting with the 50.00 centreline.

Observed levels:

Monthly price remains optimistic, along with daily price, despite printing a bearish candlestick formation on Wednesday, showing room to travel to supply at 1.3996/1.3918. Though a 1.3755 support retest may have to occur before we see buyers make an entrance.

On the short term, H1 has the 1.38 figure calling for attention as possible support, while a dip beneath here could see H4 support make a show at 1.3763, aligned just north of H1 support at 1.3751 and daily support mentioned above at 1.3755.

February 11th 2021: DXY Finding Respite Ahead of 90.00; EUR, GBP and AUD off Best Levels, 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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