March 12th 2021: DXY Registers Third Consecutive Bearish Day to Overthrow 91.50; Daily Demand Eyed Around 91.00

March 12th 2021: DXY Registers Third Consecutive Bearish Day to Overthrow 91.50; Daily Demand Eyed Around 91.00, 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, as you can see, recently revisited 1.1857/1.1352 demand and is in the process of forming a recovery. When monthly demand enters the frame, traders tend to take note.

Any notable 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:

Demand for risk assets increased Thursday, consequently weighing on safe-haven currencies, such as the US dollar. Europe’s single currency, therefore, continued to climb against the greenback and unmasked a 38.2% Fib level at 1.2021. This follows a rebound from support priced in at 1.1887 earlier in the week, a level surrounded by a 127.2% Fib projection at 1.1843 and a 100% Fib extension at 1.1848.

The RSI oscillator, thanks to recent upside, is now on the brink of testing the lower side of the 50.00 centreline.

H4 timeframe:

Dollar downside elevated the pair above resistance at 1.1952, followed by a subsequent retest of the level as support.

Assuming buyers maintain position, resistance at 1.2027 can be seen as the next ceiling, with subsequent buying to shine the technical spotlight on another layer of resistance priced in at 1.2135 (previous Quasimodo support).

H1 timeframe:

A closer reading of price action on the H1 scale reveals the unit rebounded from 1.1950 support Thursday (aided by demand at 1.1916/1.1931) and, in recent hours, advanced to within touching distance of 1.20, followed by resistance at 1.2015, a prior Quasimodo support level.

RSI movement has the indicator pencilling in early bearish divergence around overbought space, following an earlier recovery ahead of the 50.00 centreline.

Observed levels:

Although monthly demand from 1.1857/1.1352 emphasises a bullish theme, resistance is in sight, made up of a 38.2% daily Fib level at 1.2021, H4 resistance at 1.2027 and H1 resistance at 1.2015 (and the key figure 1.20). Therefore, between 1.2027 and 1.20 we may witness sellers make an entrance to at least retest 1.1950ish (H1).

March 12th 2021: DXY Registers Third Consecutive Bearish Day to Overthrow 91.50; Daily Demand Eyed Around 91.00, 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. What’s 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 higher by 1.1 percent, though still remains within February’s range.

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:

Partly modified from previous analysis –

AUD/USD bulls continued to gain in confidence on Thursday as the US dollar index (DXY) refreshed weekly lows.

Registering a third successive daily advance, the pair is now within a stone’s throw from trendline support-turned resistance, taken from the low 0.5506. It is here, in light of the monthly timeframe’s technical position (see above), daily sellers could make a show.

RSI action climbed above the 50.00 centreline on Thursday, leaving oversold territory unchallenged.

H4 timeframe:

Supply from 0.7811/0.7770, as you can see, is under siege as sellers failed to find much grip on Thursday. Dethroning the aforesaid supply exposes demand-turned supply coming in at 0.7848/0.7867, an area housing a 61.8% Fib level at 0.7859.

Should sellers regain consciousness, however, demand at 0.7696/0.7715 is on the menu.

H1 timeframe:

Following a lively break above supply coming in from 0.7751/0.7735 and a subsequent retest heading into US hours on Thursday, price movement climbed to fresh pinnacles and placed 0.78 in the spotlight, closely shadowed by supply at 0.7818/0.7807 (held price lower since early March).

What’s interesting about 0.78 resistance and nearby supply is its connection with H4 supply at 0.7811/0.7770 and the daily trendline resistance, along with the H1 RSI printing early bearish divergence.

Observed levels:

Partly modified from previous analysis –

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 on the daily scale. However, before sellers make a show, a retest of daily trendline resistance could be on the cards.

The combination of H4 supply at 0.7811/0.7770, the H1 supply at 0.7818/0.7807 (glued to the upper side of H4 supply) and daily trendline resistance, could welcome sellers today.

March 12th 2021: DXY Registers Third Consecutive Bearish Day to Overthrow 91.50; Daily Demand Eyed Around 91.00, 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:

Partly modified from previous analysis –

USD/JPY settled significantly off best levels Thursday, mirroring Wednesday’s movement.

The dollar index falling sharply for a third consecutive session places price action under pressure.

Along with the RSI spinning lower ahead of resistance at 83.02 (active since 2015), there’s scope for price to touch gloves with support at 107.64—a previous Quasimodo resistance—and neighbouring supply-turned demand at 107.58/106.85.

H4 timeframe:

Price unearthed Quasimodo resistance at 109.16 at the beginning of the week, with the pair now in the process of retreating lower. Support at 108.09 is seen, a level fastened just north of important demand coming in from 107.81/108.01.

H1 timeframe:

With H1 circling the underside of 108.50, Fib support (green) between 108.18 and 108.28, as well as trendline support, taken from the low 104.92, can be seen as a possible short-term floor. 108 support is also interesting, strategically positioned just south of the Fib support area.

Observed levels:

Outlook unchanged.

With daily Quasimodo resistance at 109.38 and the monthly timeframe’s descending resistance yet to make an arrival, 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 12th 2021: DXY Registers Third Consecutive Bearish Day to Overthrow 91.50; Daily Demand Eyed Around 91.00, 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, as you can see, currently trades flat, circling 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 –

Buyers, as can be seen from the daily chart, recently pencilled in a bottom ahead of trendline support, drawn from the low 1.1409, and support coming in at 1.3755. Upside has remained favoured so far this week, possibly shifting 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, currently testing the 60.00 region. 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:

Following the retest of trendline resistance-turned support, pencilled in from the high 1.4240, Thursday’s bullish showing underpins a possible test of Quasimodo resistance at 1.4007 (aligns with a 50.00% retracement). Interestingly, beyond 1.4007, resistance appears relatively thin until around the 1.42ish point.

H1 timeframe:

Latest developments on the H1 scale brought the 1.40 figure into the spotlight—a psychological level that’s capped upside since late February and therefore will be a widely watched base today.

With the RSI chalking up overbought conditions, 1.40 may attract a short-term bearish theme. Though in the event buyers take the wheel, above 1.40 reveals scope to rally as far north as resistance at 1.4059—previous Quasimodo support (red).

Observed levels:

Both the monthly and daily timeframes show room to explore higher levels.

In order for additional buying to take shape, the 1.40 figure, and of course H4 Quasimodo resistance at 1.4007, must be overthrown.

Higher timeframes tend to take precedence over lower timeframes, therefore a break above 1.40 could be brewing. However, this does not mean a short-term bearish scenario from 1.40 is out of the question, particularly as the H1 RSI recently registered overbought conditions.

March 12th 2021: DXY Registers Third Consecutive Bearish Day to Overthrow 91.50; Daily Demand Eyed Around 91.00, 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.




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