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April 23rd 2021: Dollar Higher Against Major Currencies; Dollar Index Firm North of 91.00

Charts: 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 three-month retracement slide, demand at 1.1857-1.1352 sparked a bullish revival in April, up 2.3 percent MTD. The possibility of fresh 2021 peaks is on the table, followed by a test of ascending resistance (prior support – 1.1641).

Spinning lower, on the other hand, shines the technical spotlight on trendline resistance-turned support, taken from the high 1.6038.

Based on trend studies, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

1.2058 has offered a relatively muscular resistance so far this week, withstanding two upside attempts. Navigating deeper waters today shines the technical spotlight on the 200-day simple moving average, currently circling 1.1966 (note moving averages are known to offer dynamic support and resistance).

Space north of 1.2058, however, shows Quasimodo resistance residing at 1.2169, followed by another Quasimodo formation at 1.2278.

Trend studies, despite the recent test of resistance at 1.2058, reveals EUR/USD has been trending higher since early 2020 (many analysts will refer to this as a primary trend).

In terms of where the RSI oscillator stands, the value recently levelled off south of overbought space and dropped through 60.00.

H4 timeframe:

In spite of a somewhat hawkish ECB vibe, Europe’s single currency struggled to secure a bid against the US dollar on Thursday.

Supply at 1.2101-1.2059 continued to command position, with technical elements throwing light on a notable support/resistance level at 1.1990. Thin bids here unmask Quasimodo resistance-turned support at 1.1937.

H1 timeframe:

Quasimodo resistance at 1.2070—a level sharing space with a Fib cluster (1.618% Fib expansion at 1.2068 as well as a 100% projection at 1.2066)—delivered a solid ceiling heading into the early hours of US trade on Thursday, with price subsequently travelling below the 100-period simple moving average at 1.2024 to shake hands with the 1.20 figure (joined by a Fib cluster between 1.1994 and 1.2001). Candlestick enthusiasts will note the 1.20 test established a hammer pattern (usually interpreted as a bullish signal at lows).

Space south of 1.20 has demand at 1.1956-1.1945 to target.

With reference to the RSI oscillator, bullish divergence could form as the value circles territory above support at 35.45.

Observed levels:

1.20 is a widely watched psychological base. In light of Fib confluence adding weight to the round number, and the recent test in the shape of a H1 hammer candle, a bullish wave could come about and at least test the 100-period simple moving average at 1.2024. However, traders are urged to pencil in the possibility of a whipsaw to H4 support at 1.1990 before buyers attempt to take the wheel.

Monthly demand at 1.1857-1.1352 supports buying, yet daily price rejecting resistance at 1.2058 casts a bearish cloud over the currency pair.

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, AUD/USD has consolidated just south of trendline resistance (prior support – 0.4776 high) and supply from 0.8303-0.8082.

Should a bearish move unfold over the coming months, demand at 0.7029-0.6664 (prior supply) is featured to the downside.

With respect to 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:

Despite an initial non-committal tone, sellers took control beneath 0.7817 resistance Thursday amidst sour market sentiment and muscular USD demand. Sustained interest to the downside elbows February’s low at 0.7563 into the spotlight, with subsequent selling highlighting demand at 0.7453-0.7384 and the 200-day simple moving average at 0.7436.

The technical view from the RSI oscillator reveals momentum levelling off under the 60.00 mark, with the value poised to cross swords with the 50.00 centreline.

H4 timeframe:

The tail end of Thursday’s session witnessed price movement dive into the walls of 0.7696-0.7715 demand, lightly clipping the lower edge of the aforesaid area.

Downstream, Fibonacci traders will note a Fib cluster formed between 0.7667 and 0.7679. This area is made up of Fib extensions, Fib expansions and Fib retracement levels. Although technically confluent, the Fib cluster is sited just north of trendline support, extended from the low 0.7531, therefore a whipsaw through the Fib cluster is perhaps on the table.

H1 timeframe:

The technical landscape on the H1 scale shows price action carved out a dragonfly doji candlestick (typically viewed as a bullish candle at lows) in recent hours, a formation which pierced through 0.77 (likely tripping stops beneath the round number) and tapped the upper side of demand at 0.7679-0.7695. Note the said demand area represents the decision point to break above 0.77 in mid-April.

Any upside flow from 0.77 could take aim at the 100-period simple moving average at 0.7745, closely shadowed by supply at 0.7783-0.7760.

In conjunction with H1 price action, the RSI shows signs of bullish divergence ahead of oversold territory.

Observed levels:

Short term, charts studies suggest two possible scenarios:

  1. H1 action climbs from 0.77 and tests H1 supply at 0.7783-0.7760, aided by RSI bullish divergence.
  2. H1 dips beneath 0.77 and neighbouring demand at 0.7679-0.7695 to touch gloves with support at 0.7668, which happens to blend with the H4 Fib cluster between 0.7667 and 0.7679. Traders will note a bullish response from here is possible as larger traders may try to bid into sell-stops.

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 February’s outperformance, March concluded up by 3.9 percent and marginally cut through descending resistance, etched from the high 118.66.

April, currently down 2.4 percent, is seen attempting to climb back through the breached descending resistance.

Daily timeframe:

Unchanged from previous analysis.

Despite USD demand, and US equities taking a hit on the back of a Bloomberg report stating US President Biden may hike capital gain’s tax, USD/JPY remained pretty much unchanged on Thursday.

The spotlight, therefore, remains firmly on trendline support, etched from the low 102.59, as well as demand plotted at 107.58-106.85 (prior supply) and a 38.2% Fib level at 107.73. Voyaging into the aforesaid areas underlines the possibility of a bullish revival.

In terms of trend on the daily scale, despite decisive selling in April, we have been trending higher since early 2021.

RSI action recently journeyed beneath support at 57.00, and dipped a toe under 40.00. This implies momentum remains to the downside for the time being, threatening moves into oversold space.

H4 timeframe:

Largely unchanged from previous analysis.

Although late US trade invited downside moves, stirred on the back of a JPY safe-haven bid, demand at 107.81-108.01—benefits from a Fib cluster around 108ish—continues to underpin price movement.

108.50 resistance, as you can see, is arranged to the upside. Should the aforesaid demand move aside, however, welcoming support at 107.44 could be on the cards.

H1 timeframe:

Largely unchanged from previous analysis.

The 108 psychological support extended its presence on Thursday, though buying pressure from the level appears deflated, weighed by trendline resistance, taken from the high 110.55, and the 100-period simple moving average at 108.19. Additional zones to the upside to be mindful of are supply areas at 108.57-108.46 and 108.60-108.71.

Territory south of 108 shines light on demand coming in at 107.52-107.65.

As for the RSI, the value is seen pursuing terrain just below 50.00.

Observed levels:

Unchanged outlook.

108 could still spark buying, given the level’s connection with H4 demand at 107.81-108.01 and Fib confluence.

However, should the pair explore lower levels and test H4 support at 107.44, this barrier packs more of a bullish punch, having seen the base align with daily demand at 107.58-106.85 (and associated technical confluence on the daily scale).

GBP/USD:

Monthly timeframe:

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

The pendulum swung in favour of buyers following December’s 2.5 percent advance, stirring major trendline resistance (2.1161). February subsequently followed through to the upside (1.7 percent) and refreshed 2021 highs at 1.4241, levels not seen since 2018.

Contained within February’s range, however, March snapped a five-month winning streak and formed what candlestick enthusiasts call an inside candle pattern (represents a short-term consolidation with low volatility). A breakout lower would generally be viewed as a bearish signal.

April trades higher by 0.4 percent.

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.

Erasing weekly gains, sterling slipped against a broadly stronger USD on Thursday (DXY firm north of 91.00).

The one-sided 0.6 percent slide throws light on 1.3670 bottoms, arranged north of Quasimodo support at 1.3609 and associated Fibonacci confluence.

As for trend, GBP/USD has been trending higher since early 2020.

From the RSI, we can see the recent dip in price hauled the RSI value to within striking distance of the 50.00 centreline.

H4 timeframe:

Downside momentum, as you can see, pulled H4 candles through support at 1.3919 and at 1.3852 (both now acting resistances).

Quasimodo support calls for attention at 1.3750 should sellers remain in the driving seat.

H1 timeframe:

Buyers abandoned the 1.39 figure mid-way through London hours on Thursday, offered lower on the back of a bearish presence from the underside of the 100-period simple moving average around 1.3916 (and RSI action holding under resistance at 54.88).

The 1.39 breach, as you can see, ignited breakout selling, though momentum to the downside slowed as we transitioned to the US session.

Recent movement, nevertheless, has underlined interesting support around the 1.38 figure, dovetailing with a 61.8% Fib level at 1.3797 and a 1.618% Fib expansion at 1.3806.

Technicians may also note the RSI nosedived into oversold space, testing lows of around 22.50.

Observed levels:

H1 testing 1.38 confluence is likely to spark short-term bullish interest, yet whether movement from the level would be enough to take on bearish flow under H4 resistance at 1.3852 is difficult to estimate. With that, traders interested in 1.38 may consider waiting for additional candlestick confirmation to form before pulling the trigger—think bullish engulfing pattern or hammer formation.

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