Charts: Trading View
US Dollar Index (Daily Timeframe):
As a gauge for dollar movement, despite Friday’s spirited bearish engulfing candle, US dollar index (ticker: DXY) bulls assumed command last week and settled 0.5 percent higher.
Leaving the 200-day simple moving average (91.44) unchallenged, in addition to support from 90.64-91.40, the recent wave of upside organises the 93.44 31st March high as the next upside objective, clouded by Quasimodo resistance from 93.90.
Trend studies unwrapped a clear-cut bearish narrative in 2020, yet 2021, after discovering support from 89.34 (a level boasting historical significance back as far as March 2009), motivated a bullish presence.
Longer term, though many analysts may deviate here, a USD trend reversal to the upside is validated above the 94.74 25th September (2020) high (blue arrow). By the same token, beyond the 89.21 6th January low (red arrow) chart studies suggest an extension to the current downtrend. Of late, though, USD upside has been favoured. A break of the 93.44 31st March high mentioned above, knowing the greenback trades north of the 200-day simple moving average (circling 91.44), also adds weight to a longer-term bullish presence developing.
Out of the relative strength index (RSI), the dollar is overbought. On top of this, the value recently crossed swords with resistance at 73.00 and is in the process of establishing bearish divergence. This notifies traders that while price movement managed to eke out fresh highs, upside momentum is lacking and may stimulate a retracement.
- Although Friday spun lower and snapped a four-day bullish play, bulls could take a run at the 93.44 31st March high. A possible whipsaw to Quasimodo resistance at 93.90 is also in the offing. Alternatively, a retracement to support at 90.64-91.40 and neighbouring 200-day simple moving average around 91.44 is certainly not out of the question this week before buyers attempt to make an appearance. In fact, technically, 90.64-91.40 packs a reasonable punch.
EUR/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)
Closing the book on the month of June witnessed EUR/USD—in the shape of a near-full-bodied bearish candle—touch gloves with familiar support at $1.1857-1.1352 and erase 3.0 percent. A bullish revival from the aforesaid support shines the technical spotlight on 2021 peaks at $1.2349; additional enthusiasm may welcome 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:
A closer reading of price action on the daily scale reveals the unit left the 200-day simple moving average at $1.1997 unchallenged in late June and shook hands with Quasimodo support at $1.1836 on Friday. Candlestick enthusiasts will note the test established what’s known as a hammer pattern (often viewed as a bullish signal particularly off support).
Failure to build off current support shifts attention to Quasimodo support at $1.1688.
Underpinning a potential advance from $1.1836 this week, the RSI pencilled in bullish divergence, with the indicator’s value venturing out of oversold space. This implies that despite price registering fresh lows, downside momentum has slowed and cautions that buyers could make an entrance.
As for trend, the currency pair has exhibited a consolidation phase since 2021, following healthy gains in 2020.
H4 timeframe:
Drawn from early April, $1.1794-1.1822 demand arrived on Friday, an area located just north of daily Quasimodo support plotted at $1.1836.
Occupying higher space is resistance at $1.1937, a level that withstood numerous upside attempts between the 22nd and 25th June. Notably, clouding the level is supply at $1.2006-1.1983—sharing space with resistance at $1.1990. What’s also technically interesting is the supply forms a decision point, a decision to rupture the $1.1990 support base, or the 5th May low at $1.1986.
H1 timeframe:
Missing $1.18 by a whisker, buyers strengthened their grip Friday, gulping resistance at $1.1848 and shaping modest demand at $1.1838-1.1850. The 100-period simple moving average is plotted close by at $1.1876, with a break north unmasking demand-turned supply at $1.1895-1.1911, joined by a 61.8% Fib retracement at $1.1910 and the $1.19 round number.
Friday’s bullish spirit has the RSI value within touching distance of overbought territory, an area also housing resistance at 78.97 (active since the beginning of this year).
Observed levels:
Long term:
Acknowledging monthly flow trades at support from $1.1857-1.1352, together with the monthly trendline resistance, extended from the high $1.6038, giving way mid-2020, buyers could make a show in the summer months.
On top of this, the daily chart shows price retesting Quasimodo support from $1.1836, formed by way of a hammer candlestick pattern. Consequently, this week may knock on the door of the 200-day simple moving average around $1.1997.
Short term:
In conjunction with higher timeframes pointing north, H4 action extending recovery gains from demand at $1.1794-1.1822 (aligns closely with daily Quasimodo support at $1.1836) shifts attention to H4 resistance at $1.1937. Before reaching this far north, H1 demand-turned supply at $1.1895-1.1911 is on the radar. Note that above here, H1 Quasimodo resistance is visible at $1.1956, arranged a touch above $1.1937 on the H4.
AUD/USD:
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 squaring off south of trendline resistance (prior support – $0.4776 low) and supply from $0.8303-0.8082. Thanks to June’s 3.0 percent decline, however, support is featured at $0.7394. Additional downside pressure brings light to demand at $0.7029-0.6664 (prior supply).
July is currently up 0.4 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:
The daily chart—aided by USD softness post-NFP—found itself off supply-turned demand at $0.7453-0.7384 Friday, recovering from year-to-date lows and developing a bullish outside reversal candle. Sustained interest to the upside this week has the 200-day simple moving average at $0.7563 to target, closely followed by resistance at $0.7626.
The outlook from the RSI shows traders the indicator is in the midst of forming bullish divergence, action informing traders that while price recorded lower lows, momentum to the downside has decelerated, proposing the $0.7453-0.7384 response may pull in additional buying.
In terms of trend, 2020 was a good year for AUD/USD, though 2021 is on the back foot.
H4 timeframe:
Ahead of support at $0.7440, bulls made their way through consumed supply between $0.7527 and $0.7508 (blue), with the path of least resistance seen to the upside until $0.7570-0.7554 supply. Sheltered south of resistance at $0.7588 and Quasimodo resistance from $0.7599, this is an area sellers could reside at this week.
H1 timeframe:
US trading hours Friday observed price action dethrone $0.75, alongside Quasimodo resistance at $0.7504 and the 100-period simple moving average at 0.7505. Deprived of resistance north of $0.75, the next port of call falls in at resistance from $0.7546, a prior Quasimodo support level, and a resistance area at $0.7561-0.7548 (glued to the lower side of H4 supply at $0.7570-0.7554).
The chart’s RSI value finished the week exploring overbought space, following an earlier recovery from support at 27.02 (positioned within oversold).
Observed levels:
Long term:
Daily supply-turned demand at $0.7453-0.7384, blending with monthly support at $0.7394, is central focus this week.
$0.7453-0.7384 buyers are likely to take aim at the 200-day simple moving average at $0.7563 on the daily timeframe, with subsequent movement above the dynamic value placing resistance at $0.7626 in the fight.
Short term:
Scope to advance is also visible on the lower timeframes this week, targeting H1 resistance at $0.7561-0.7548 and H4 supply at $0.7570-0.7554.
Buyers are unlikely to commit at current prices—it’s too expensive according to chart structure. Should a retracement shape early week, prior to connecting with H1 and H4 zones, and $0.7504 H1 support and $0.75 is brought into the frame, buyers are likely to be more agreeable.
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