January 8th 2021: Greenback Strongly Higher Off Daily Support at 89.34

January 8th 2021: Greenback Strongly Higher Off Daily Support at 89.34, FP Markets

EUR/USD:

Monthly timeframe:

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

Following the break of long-term trendline resistance (1.6038) in July, and subsequent break of supply from 1.1857/1.1352 in August (2020), a modest correction surfaced. However, buyers making an entrance in November and December (registering fresh multi-month highs) reasons additional upside towards ascending resistance (prior support – 1.1641) may be on the horizon.

The primary uptrend has been in play since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

Partly modified from previous analysis –

Since late December, upside momentum has noticeably slowed, with Thursday delivering a solid bearish candle after confronting the descending wedge pattern’s (1.2011/1.1612) take-profit target at 1.2318 (yellow). Next on tap in terms of resistance is the bullish flag’s (1.2177/1.2078) take-profit level at 1.2384 (purple), while further weakness throws light on 1.2095 support.

Trend on this timeframe remains decisively north, launching a series of higher highs and higher lows since March 2020 (secondary trend). However, the RSI also merits attention, with the value producing bearish divergence around overbought territory.

H4 timeframe:

Sellers responding from the March 2018 supply at 1.2385/1.2346 directed sellers into 1.2255 support on Thursday, a level uniting with trendline support (1.1602).

Below the aforesaid trendline support, December 31 low is in the crosshairs around 1.2215.

H1 timeframe:

Greeting 1.2250 support mid-way through London hours on Thursday capped sellers, enough to bring about a test of the nearby 100-period simple moving average at 1.2282.

Territory above the SMA shows 1.23 resistance and neighbouring supply at 1.2325/1.2312. Dropping through 1.2250 shines light on demand from 1.2205/1.2213 and 1.22 support.

RSI enthusiasts will also note the indicator dipped a toe in oversold territory, yet has since recovered to within close range of 50.00.

Observed levels:

Monthly poised to reach for higher levels, H4 testing trendline support and 1.2255 support and H1 holding 1.2250 support signals a bullish vibe. The concern for buyers, nonetheless, is daily price testing pattern resistance around 1.2318, and possible resistance emerging from 1.23 on the H1 (and H1 supply at 1.2325/1.2312).

January 8th 2021: Greenback Strongly Higher Off Daily Support at 89.34, FP Markets

AUD/USD:

Monthly timeframe:

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

December traded higher by nearly 5 percent, following November’s 4.5 percent rebound from demand at 0.7029/0.6664 (prior supply), consequently wrapping up 2020 in positive territory.

Interestingly, buyers, according to the monthly chart, appear free to explore as far north as 0.8303/0.8082 in the coming months, a supply zone aligning closely with trendline resistance (prior support – 0.4776).

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

Daily timeframe:

Unable to build on recent recovery gains north of support at 0.7647, AUD/USD witnessed a modest correction form yesterday, a few inches beneath 2021 highs.

In conjunction with the prevailing uptrend (since March 2020), and monthly price taking aim at higher pinnacles, throws a light on supply at 0.7937/0.7890.

Momentum, as measured by the RSI oscillator, recently produced bearish divergence within the parapets of the overbought area.

H4 timeframe:

0.7805 resistance remained meaningful Thursday, sending AUD/USD back to within touching distance of trendline support (0.7461).

Downstream, demand is centred around 0.7665/0.7644 (prior supply); above 0.7805, buyers will likely play for 0.7843 resistance.

H1 timeframe:

Thursday, as you can see, nosedived through 0.7750 support into the 100-period simple moving average at 0.7740. Despite an initial back and forth, buyers reclaimed 0.7750 to recently touch highs at 0.7773, forming a shooting star candle.

This could force a 0.7750 support retest, with subsequent movement likely to zero in on 0.78 resistance.

Observed levels:

Should the recently fashioned H1 shooting star prompt a short-term dip into 0.7750 bids, buyers could step forward and target 0.78. Not only is monthly price itching to reach supply at 0.8303/0.8082, daily price also exhibits scope to rally. Additionally, H4 recently bottomed ahead of trendline support, with room to pursue 0.7805 resistance.

January 8th 2021: Greenback Strongly Higher Off Daily Support at 89.34, FP Markets

USD/JPY:

Monthly timeframe:

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

Over the span of four years, USD/JPY carved out a descending triangle pattern between 118.66/104.62.

Although December pursued terrain south of 104.62, January recently staged a modest comeback and is on course to retest the lower side of 104.62.

104.62 ceding ground throws light on support from 101.70, with a break uncovering trendline support (76.15) and the descending triangle’s take-profit level at 91.04 (red).

Daily timeframe:

Support at 103.08, despite a relatively intense whipsaw to ten-month lows, reclaimed position following Thursday’s spirited recovery play. This has likely shifted focus back to trendline resistance (111.71), with a break unmasking supply at 106.33/105.78 and the 200-day simple moving average.

H4 timeframe:

The risk-on scenario witnessed Thursday led USD/JPY off 102.95/102.82 (a newly formed supply-turned demand), through notable supply at 103.46/103.58 (representing a zone where a decision was made to break numerous local lows between 103.19/103.40) to resistance at 103.88.

103.88 represents a technically appealing level, joined by a number of Fibonacci studies to form a range between 103.99/103.76.

H1 timeframe:

Thursday settled marginally south of session highs ahead of the 104 level and supply from 104.13/104.06. This followed price dethroning supply at 103.39/103.26 and 103.50 resistance.

Other developments reveal the RSI indicator exited overbought space, demonstrating a possible move back to 50.00.

Observed levels:

Higher timeframe action suggests a move to the lower side of the monthly descending triangle pattern at 104.62, which happens to align with the daily trendline resistance.

Before the above can take shape, H4 resistance around 103.88 and combined Fib levels (103.99/103.76) could prompt selling. H1, however, indicates a test of 104 is perhaps in store before sellers make a show.

January 8th 2021: Greenback Strongly Higher Off Daily Support at 89.34, FP Markets

GBP/USD:

Monthly timeframe:

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

December ended higher by 2.5 percent, elevating GBP/USD to fresh multi-month highs and stirring trendline resistance (2.1161).

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

Daily timeframe:

Brought forward from previous analysis –

Resistance at 1.3755 remains a key level to be aware of on the daily chart, stationed below supply at 1.3996/1.3918. A sell-off, on the other hand, projects light on support at 1.3176.

The RSI reveals a rangebound environment, limited by support around 47.00 and resistance at the 66.00 region.

H4 timeframe:

As you can see, demand at 1.3527/1.3556 remains in force. Through the simple lens of a technical trader, however, buyers appear to be losing grip. The initial reaction (black arrow) reached modest highs of 1.3671, though the subsequent reaction failed to challenge said peaks, implying sellers are gaining traction. Drifting through the aforesaid demand gestures a possible continuation to demand at 1.3401/1.3446 (aligns with a 161.8% Fib projection at 1.3441).

H1 timeframe:

1.3550 support has proven an effective base, though like the H4 demand underlined above at 1.3527/1.3556, appears to be hanging by a thread. This essentially means that interest in the level is likely drying up as buyers failed to topple 1.36 resistance and neighbouring 100-period simple moving average.

Jabbing through 1.3550 today unlocks 1.35 support, encased by demand at 1.3490/1.3509.

Observed levels:

Shorter term technical levels hint at possible weakness, with moves below 1.3550 support a possibility on the H1 today, potentially breaching H4 demand at 1.3527/1.3556 and at least testing 1.35 support on the H1.

January 8th 2021: Greenback Strongly Higher Off Daily Support at 89.34, 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.




Start Trading
in Minutes

bullet Access 10,000+ financial instruments
bullet Auto open & close positions
bullet News & economic calendar
bullet Technical indicators & charts
bullet Many more tools included

By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.




Source - database | Page ID - 22490

Get instant Updates in Telegram