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)
Following the break of long-term trendline resistance (1.6038) in July, and subsequent break of supply at 1.1857/1.1352 in August, EUR/USD, by way of two back-to-back bullish candles, welcomed 2021 in good health.
While additional upside towards ascending resistance (prior support – 1.1641) may eventually materialise, an 1.1857/1.1352 retest is also on the cards in view of February’s near-1.5 percent correction.
The primary uptrend has been in play since price broke the 1.1714 high (Aug 2015) in July 2017.
Daily timeframe:
Europe’s shared currency tackled trendline support, extended from the low 1.0774, on Thursday and led the unit into the parapets of demand coming in at 1.1923/1.2001.
Adding to the above, traders will acknowledge the RSI appears bound for oversold territory, currently circling the 34.00 neighbourhood.
H4 timeframe:
1.2040/1.2065 serving sellers well as a supply in the early hours of Thursday, aided by a spirited USD advance (the US dollar index registered a fifth successive bullish close), guided EUR/USD aggressively into demand from 1.1962/1.1976 and mildly clipped its lower edge.
Some fresh air is seen south of 1.1962/1.1976 until price shakes hands with 1.1914/1.1932 demand—an area that reinforced dip-buying heading into the end of November (2020).
H1 timeframe:
1.1954/1.1960 demand made an entrance in recent hours and has seen price action modestly pare losses. This, of course, follows the earlier breach of the key figure 1.20, a level widely watched on EUR/USD.
Interestingly, downstream shows a Quasimodo support level in sight at 1.1942.
Out of the RSI, the value spun into oversold space yesterday, touching a low of 21.27. The indicator, as you can see, is on course to exit oversold levels, which may be interpreted as a bullish signal for many.
Observed levels:
The upper side of monthly demand at 1.1857 lies in wait in the event sellers drill through remaining bids within daily demand at 1.1923/1.2001. A continuation lower remains on the table all the while the DXY continues to explore higher ground.
On the shorter-term chart, H4 demand at 1.1962/1.1976 having its lower edge nudged yesterday also echoes a bearish narrative. This places a question mark on current H1 demand at 1.1954/1.1960 and throws H1 Quasimodo support in light at 1.1942.
AUD/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
January pencilled in a half-hearted shooting star candle formation (a bearish signal at peaks), following two spirited months of gains off demand at 0.7029/0.6664 (prior supply).
The above shines light on a possible correction in the first quarter of 2021. Though buyers regaining consciousness could spark a continuation higher to 0.8303/0.8082—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:
Partly modified from previous analysis –
Buyers and sellers continue to battle for position around trendline support (0.5506), with sellers displaying a more vigorous approach. Should buyers throw in the towel, the technical spotlight will shine on demand at 0.7453/0.7384 (prior supply).
As recently evidenced from the RSI indicator, the value dipped a toe in waters beneath the 50.00 centreline, following a trendline support breach last week.
H4 timeframe:
Demand at 0.7600/0.7625 remains on the ropes as buyers struggle to find acceptance. This calls attention to 0.7486/0.7514 demand.
H1 timeframe:
Common AB=CD take-profit objectives are considered to be the 38.2% and 61.8% Fib levels. As you can see, the pullback formed after crossing swords with AB=CD support at 0.7564 sent price above the 100-period simple moving average in the early hours of trading on Thursday and came within touching distance of the AB=CD 61.8% Fib resistance at 0.7650.
The pair concluded trade around 0.76, with the RSI indicator also diving south of the 50.00 centreline.
Observed levels:
The AUD/USD market, according to technical drawings, exhibits a bearish outlook. Monthly price responding from January’s shooting star pattern, as well as the daily trendline support and H4 demand currently under pressure, signals H1 sellers could take the currency pair beneath 0.76 today to challenge 0.7564 lows formed Tuesday.
USD/JPY:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Since snapping a four-month bearish phase, in the shape of a bullish engulfing candle in January, buyers remain on form north of support at 101.70.
Resistance can be seen in the form of a descending line (not considered a traditional trendline resistance), etched from the high 118.66.
Daily timeframe:
Shaped by way of seven consecutive bullish closes, the unit is within a stone’s throw from testing the 200-day simple moving average at 105.59, sheltered just south of supply registered at 106.33/105.78.
RSI resistance at 57.00—a level hindering upside since July 2020—gave in last week, with the value, as highlighted in Wednesday’s piece, now exploring overbought space.
H4 timeframe:
In light of recent USD upside, an alternate AB=CD bearish pattern is on the verge of making a show on the H4 at the 127.2% Fib extension level from 105.63. What’s interesting from a technical perspective is the harmonic formation shares space with the 200-day simple moving average and is closely connected with the lower side of daily supply at 105.78.
H1 timeframe:
Interestingly, the H1 shines the technical spotlight on Quasimodo resistance at 105.65, a level sharing space with the H4 alternate AB=CD bearish pattern at 105.63 and the 200-day simple moving average.
Downstream, demand can be seen at 104.96/105.06—surrounding the 105 figure. Also in view is support at 105.14 and the 100-period simple moving average at 105.02.
With price strongly higher on Thursday, it’s no surprise to see the RSI indicator trekking within overbought terrain. Due to this, and the market trending north since bottoming in early January, the RSI overbought signal may not necessarily be a cue to look for shorts.
Observed levels:
The combination of the 200-day simple moving average, the H4 alternate AB=CD bearish pattern at 105.63, and H1 Quasimodo resistance at 105.65 could form an area of resistance and potentially hinder upside attempts derived from the monthly timeframe’s bullish engulfing candle.
GBP/USD:
Monthly timeframe:
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
December’s 2.5 percent extension elevated GBP/USD and stirred trendline resistance (2.1161), with January refreshing multi-month highs and logging a 0.2 percent gain.
In terms of trend, the primary trend has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way – April high, 2018. In effect, the aforesaid high represents the next upside objective on the monthly chart.
Daily timeframe:
Unchanged from previous analysis due to lacklustre performance –
Buyers and sellers have continued to square off around the lower side of resistance at 1.3755 since January 21. Breaching the latter, however, brings light to supply at 1.3996/1.3918.
The RSI indicator has revealed a rangebound environment since November, limited by support around 47.00 and resistance at the 66.00 region (the value stands at 54.00). It is common to see higher oversold support areas form in an uptrend.
H4 timeframe:
Thursday witnessed pound sterling whipsaw to lows at 1.3566 and aggressively defend a Quasimodo support level plotted at 1.3572. This swamped technical stops beneath 1.3620ish lows and took on liquidity (bids) at the aforesaid Quasimodo.
Overhead, resistance is seen at 1.3763, with a break unveiling supply at 1.3837/1.3800.
H1 timeframe:
Thursday’s whipsaw to lows at 1.3566 also fuelled a fakeout through the 1.36 figure on the H1 chart, causing pain on both sides of the market (those looking to fade 1.36 and breakout sellers [bear trap]).
The intense one-candle advance mid-way through London pulled price through the 100-period simple moving average at 1.3665 to shake hands with an ascending resistance (1.3609—not considered a traditional trendline) and a Quasimodo resistance at 1.3698, sited just south of the 1.37 level.
RSI enthusiasts may also note the line hovering within a stone’s throw from overbought territory.
Observed levels:
Partly modified from previous analysis –
The monthly timeframe, as noted in previous writing, carries a bullish atmosphere and places a question mark on daily resistance at 1.3755. This helps explain the indecision around the resistance since mid-January.
Technically speaking, the monthly timeframe’s presence also helps justify the strength seen off H4 Quasimodo support at 1.3572. With room seen for H4 to advance to resistance at 1.3763, H1 could try and topple 1.37 resistance and make a run for H1 Quasimodo resistance at 1.3751 (sheltered just under daily resistance at 1.3755). Therefore, a short-term bullish theme may emerge north of 1.37 today.
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