June 22nd 2021: Dollar on the Backfoot; DXY Trades South of 92.00

June 22nd 2021: Dollar on the Backfoot; DXY Trades South of 92.00, FP Markets

Charts: Trading View


Monthly timeframe:

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

Down 2.5 percent MTD, June remains on the ropes. Reclaiming May’s gains and also chipping into April’s upside, EUR/USD recently touched gloves with familiar support at $1.1857-1.1352.

Upstream is concentrated on 2021 peaks at $1.2349, with additional enthusiasm welcoming ascending resistance (prior support [$1.1641]).

Based on trend studies, the primary uptrend has been underway since price broke the $1.1714 high (Aug 2015) in July 2017. Additionally, price breached major trendline resistance, taken from the high $1.6038, in July 2020.

Daily timeframe:

Snapping a decisive three-day bearish phase, Monday—ahead of Quasimodo support at $1.1836— kicked off the final full week of June chalking up a recovery. With a focus now likely on the 200-day simple moving average at $1.1992, extending recovery gains could be in store.

A $1.1836 breach, on the other hand, helps validate June’s bearish tone, highlighting Quasimodo support from $1.1688.

Reinforcing Monday’s gains, the RSI pencilled in hidden bullish divergence (commonly forms a trend continuation signal that suggests upside strength remains), with the value exiting oversold terrain (bullish cue).

H4 timeframe:

A closer examination of price action on the H4 scale informs traders a floor of support emerged just north of demand from $1.1794-1.1822, arranged under Quasimodo support at $1.1836 on the daily timeframe.

Overhead, resistance at $1.1937 calls for attention, followed by supply at $1.2006-1.1983 and resistance seen partnering with the zone at $1.1990 (38.2% Fib retracement value also visible at $1.2007).

H1 timeframe:

The dollar echoed weakness on Monday—DXY elbowed back under 92.00—as markets digest the recent Fed-induced bid. Technically, this lifted EUR/USD above $1.19 to within a stone’s throw of local resistance at $1.1924. Territory above the latter unmasks a relatively clear path to the $1.20ish neighbourhood, joined by supply from $1.2006-1.1983 and the 100-period simple moving average, currently circling $1.1973.

The picture drawn from the RSI indicator reveals the value levelling off ahead of overbought territory. Should a dip occur, trendline support is seen, taken from the low 8.62.

Observed levels:

The monthly timeframe rebounding from support at $1.1857-1.1352, in addition to the daily timeframe discovering a floor ahead of Quasimodo support from $1.1836, emphasises a bullish setting.

The above places H1 bulls in a favourable location, north of $1.19, with subsequent buying to perhaps pursue space north of H1 resistance at $1,924, targeting the $1.20 figure. Though do take into account this involves brushing aside H4 resistance at $1,1937.

June 22nd 2021: Dollar on the Backfoot; DXY Trades South of 92.00, FP Markets


Monthly timeframe:

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

Since the beginning of 2021, buyers and sellers have been battling for position south of trendline resistance (prior support – $0.4776 low) and supply from $0.8303-0.8082. That was, of course, until last week’s one-sided decline, movement throwing light on support at $0.7394. Additional downside pressure also brings light to demand at $0.7029-0.6664 (prior supply).

June is currently down by 2.5 percent.

Trend studies (despite the trendline resistance [$1.0582] breach in July 2020) show the primary downtrend (since mid-2011) remains in play until breaking $0.8135 (January high [2018]).

Daily timeframe:

Leaving supply-turned demand at $0.7453-0.7384 unchallenged, AUD/USD booked gains on Monday as the DXY slumped back under 92.00. It is worth noting the aforementioned demand aligns with a collection of Fib studies and monthly support at $0.7394.

The currency pair is now within touching distance of the 200-day simple moving average at $0.7550, collaborating closely with resistance at $0.7563.

Out of the RSI, the indicator exited oversold territory yesterday, action some traders view as a bullish cue.

H4 timeframe:

$0.7485 support made an entrance Monday, stirring a bullish vibe that landed price action within reach of daily resistance at $0.7563, closely shadowed by H4 resistance at $0.7588.

H1 timeframe:

From the H1 chart, the technical picture has price toying with levels just beneath supply at $0.7558-0.7547, with a break here uncovering Quasimodo resistance at $0.7580, followed by the 100-period simple moving average at $0.7585 and then the $0.76 region.

Downstream, support at $0.7511 is on the radar.

Action from the RSI shows the value on the doorstep of overbought, eyeing resistance at 72.21.

Observed levels:

Knowing the daily timeframe is on the brink of shaking hands with the 200-day simple moving average at $0.7550 and resistance from $0.7563, a bearish theme could develop if the aforesaid barriers enter the fray.

This shines light on the area between daily resistance and H4 resistance at $0.7588 (yellow) as a possible ceiling, as well as H1 resistance zone between $0.7605 and $0.7580 (orange).

June 22nd 2021: Dollar on the Backfoot; DXY Trades South of 92.00, FP Markets


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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