March 10th 2021: Treasury Yields Slide; DXY Snaps Gains; EUR Rebounds From Monthly Demand

March 10th 2021: Treasury Yields Slide; DXY Snaps Gains; EUR Rebounds From Monthly Demand, 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)

March, down by 1.4 percent, recently revisited 1.1857/1.1352 demand. When monthly demand enters the frame, traders generally take note.

Any rebound from the aforesaid demand shifts attention back to the possibility of fresh 2021 peaks and a test of 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:

US Treasury yields retreated on Tuesday, fading 13-month highs on the ten-year Treasury note, along with the US dollar index also retreating and snapping a four-day bullish phase. This delivered fresh bullish energy to EUR/USD, aiding recovery from a 127.2% Fib projection at 1.1843 along with a 100% Fib extension at 1.1848 (positioned below support at 1.1887).

Traders will note the 200-day simple moving average hovering nearby, circling the 1.1816ish neighbourhood.

H4 timeframe:

Partly modified from previous analysis –

Technical elements on the H4 scale recently revealed an interesting support zone between 1.1818 and 1.1860 (green)—made up of Quasimodo support at 1.1818, a 100% Fib extension at 1.1860 and a 161.8% Fib projection at 1.1835.

As you can see, buyers welcomed the zone, bolstered by daily Fib support around 1.1845 and the upper edge of monthly demand from 1.1857.

Upstream from the current support zone, resistance is seen anchored to 1.1952.

H1 timeframe:

Supply at 1.1881/1.1865 was unable to attract much selling early Tuesday as buyers defended 1.1850 support. Subsequent action witnessed the pair overthrow the aforementioned supply to shake hands with 1.19.

With 1.19 under attack, buoyed by 1.1881/1.1865 serving as demand, a break of the round number is on the cards, according to higher timeframe charts.

Observed levels:

A H1 close above 1.19—knowing monthly price is touching gloves with demand at 1.1857/1.1352, and daily and H4 timeframes are bouncing from supports—is movement buyers may be drawn to.

Upside hurdles north of 1.19 are 1.1950 resistance on the H1, a level plotted nearby the 100-period simple moving average and supply at 1.1964/1.1951.

March 10th 2021: Treasury Yields Slide; DXY Snaps Gains; EUR Rebounds From Monthly Demand, 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. Also interesting was February’s movement came within striking distance of trendline resistance (prior support – 0.4776), sheltered under supply from 0.8303/0.8082.

March, as you can probably see, trades marginally higher by 0.2 percent.

In the context of 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:

With the US dollar index navigating lower from resistance at 92.26 Tuesday, AUD/USD discovered a floor off 0.7625ish and wrapped up around session highs. Continued interest to the upside places trendline support-turned resistance, taken from the low 0.5506, in the firing line, while below we have February 2nd low at 0.7563.

Trend on the daily scale has remained convincingly higher since March 2020.

Despite increased buying, the RSI remains underwater (50.00), suggesting oversold conditions is in the offing.

H4 timeframe:

Demand at 0.7601/0.7627 (houses a 127.2% Fib projection at 0.7607 and is positioned just north of Quasimodo support at 0.7592) proved an effective base on the H4 scale.

Technical conditions show price attacking supply at 0.7696/0.7715. Breakout buyers north of this range are to likely take aim at supply from 0.7811/0.7770, with subsequent buying to throw light on demand-turned supply coming in at 0.7848/0.7867.

H1 timeframe:

Latest developments observed short-term flow conquer trendline resistance, extended from the high 0.8007, the 0.77 figure and the 100-period simple moving average. What’s also technically notable is the pair retested the broken boundaries before pursuing fresh peaks.

Upriver, supply is seen at 0.7751/0.7735, shadowed by a 61.8% Fib level at 0.7756. Breaking the aforesaid level shines the technical spotlight back on the 0.78 area.

From the RSI indicator, the value made its way into channel resistance, a level situated just south of overbought territory.

Observed levels:

Longer term, the monthly and daily charts suggest sellers are likely to remain behind the wheel until February 2nd low at 0.7563 enters view, highlighted on the daily scale.

Shorter term, H1 looks reasonably healthy north of 0.77 until supply around 0.7751/0.7735, followed by H4 supply at 0.7811/0.7770 (plotted above current H4 supply at 0.7696/0.7715 which appears relatively fragile).

March 10th 2021: Treasury Yields Slide; DXY Snaps Gains; EUR Rebounds From Monthly Demand, 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 further outperformance in February, March is on the verge of mounting a bullish assault (up by 1.9 percent) on descending resistance, etched from the high 118.66 (not considered traditional trendline resistance).

To the downside, support inhabits 101.70.

Daily timeframe:

USD/JPY movement snapped a dominant four-day winning streak Tuesday, marching alongside a lower DXY and US Treasury yields sliding from highs.

Topping within a stone’s throw from Quasimodo resistance at 109.38 (along with the RSI also rotating lower ahead of resistance at 83.02 [active since 2015]), technicians are likely eyeballing support at 107.64—a previous Quasimodo resistance—and neighbouring supply-turned demand at 107.58/106.85.

H4 timeframe:

Quasimodo resistance at 109.16, as you can see, made a show on Tuesday, stirring a bearish response.

Support at 108.09 calls for attention to the downside, a level fastened just north of important demand coming in from 107.81/108.01 (an area traders are likely drawn to given its strong upside momentum out of the base).

Note the H4 Quasimodo is anchored just beneath the daily Quasimodo at 109.38.

H1 timeframe:

Tuesday’s depreciation pulled USD/JPY south of the 109 figure in early Europe, which led to a subsequent attack of 108.50 support. Further downside today shines light on a Fib support (green) between 108.18 and 108.28 (converging with the 100-period simple moving average), closely shadowed by the 108 figure and a trendline support, taken from the low 104.92.

The RSI indicator retested the lower side of 50.00 in recent action, following an earlier breach. This highlights the possibility of oversold conditions.

Observed levels:

With daily Quasimodo resistance at 109.38 and the monthly timeframe’s descending resistance yet to make an entrance, recent selling may be short-lived. Therefore, a bullish scenario may emerge off the H1 Fib support between 108.18 and 108.28, though a dip into 108 bids (H1), which aligns with H4 demand at 107.81/108.01, could also be on the menu before buyers make a stand.

March 10th 2021: Treasury Yields Slide; DXY Snaps Gains; EUR Rebounds From Monthly Demand, 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, as you can see, swung in favour of buyers following December’s 2.5 percent advance—movement that stirred 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.

March currently trades lower by 0.3 percent and remains within the walls of February’s range.

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 –

As the US dollar handed back some ground, Tuesday had sterling march higher and forge a floor ahead of trendline support, drawn from the low 1.1409, and support coming in at 1.3755.

Sustained upside momentum shifts interest back to Quasimodo resistance drawn from 1.4250, while any moves sub 1.3755 places Quasimodo support at 1.3609 in the line of fire.

With reference to the RSI indicator, the value shook hands with support made up between 46.21 and 49.16. RSI support forming around the 40.00/50.00 range in trending environments is common.

Note the trend, clearly visible on this scale, has faced higher since early 2020.

H4 timeframe:

A closer reading of price action on the H4 chart shows the unit climbed resistance at 1.3852 and crossed swords with trendline resistance, taken from the high 1.4240.

Candlestick traders will acknowledge that the test of trendline resistance shaped a shooting star—interpreted as a bearish signal at peaks.

H1 timeframe:

Early Europe watched GBP/USD bulls adopt an offensive phase Tuesday, chiselling through resistance at 1.3861, which, as you can see, was swiftly retested as support. 1.39 also made a show, a level sharing space with the 100-period simple moving average.

Also of technical note is resistance stationed above 1.39 at 1.3920. Above here, the river appears ripple free until the big figure 1.40. There is Quasimodo resistance seen at 1.3968 (black arrow), but given 1.40 is likely to grab the lion’s share of attention, 1.3968 is unlikely to spark much interest.

From the RSI oscillator, action is seen levelling off ahead of overbought conditions, currently trading around 55.00.

Observed levels:

From the monthly scale we can see buyers govern control. Daily support at 1.3755 and intersecting trendline support, therefore, will likely remain of interest to longer-term buyers.

Across the page on the lower timeframes, H4 suggests a dip lower after the candles came into contact with trendline resistance and formed a bearish candle signal. Though should H1 close above resistance at 1.3920, this would place a question mark on selling. In fact, it would possibly trigger a short-term bullish breakout scenario, targeting 1.40.

March 10th 2021: Treasury Yields Slide; DXY Snaps Gains; EUR Rebounds From Monthly Demand, 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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