Currency

April 8th 2021: USD Nudges Higher Following Federal Reserve’s March Meeting

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 carved out a third consecutive loss, extending the 2021 retracement slide by 2.8 percent.

Recent underperformance, as you can see, pulled EUR/USD into the walls of demand at 1.1857/1.1352. A rebound from the aforesaid demand shifts attention to the possibility of fresh 2021 peaks and a test of ascending resistance (prior support – 1.1641). Extending lower, on the other hand, shines the technical spotlight on trendline resistance-turned support, taken from the high 1.6038.

In terms of trend, the primary uptrend has been underway since price broke the 1.1714 high (Aug 2015) in July 2017.

Daily timeframe:

Partly modified from previous analysis.

The US dollar index recently shook hands with support at 92.60 and is in the process of attempting to close back above the 200-day simple moving average. This bullish response witnessed EUR/USD establish a shooting star (a candlestick formation generally interpreted as a bearish signal) at the underside of the 200-day simple moving average, currently circling 1.1879.

Follow-through bearish flow swings the pendulum in favour of testing Quasimodo support at 1.1688, while a bullish scene throws light on resistance at 1.1966.

As for trend on the daily scale, we’ve been higher since early 2020.

From the RSI oscillator, the value recently swept through trendline resistance, drawn from the peak 76.00, and underlined resistance at 60.30.

H4 timeframe:

In similar fashion to the daily timeframe, Wednesday fashioned a shooting star formation within striking distance of Quasimodo resistance at 1.1937.

1.1870 support is now back in the fight, with sellers on the verge of dethroning the level and perhaps unbolting downside to another layer of support at 1.1818.

H1 timeframe:

Leaving supply at 1.1956/1.1935 unchallenged Wednesday—an area housing H4 Quasimodo resistance at 1.1937—H1 candles are closing in on demand at 1.1836/1.1846, which happens to bring together several Fib levels between 1.1835 and 1.1847.

Downstream, 1.18 calls for attention, a psychological level joining hands with support at 1.1797 and a neighbouring 100-period simple moving average.

Momentum, as measured by the relative strength index (RSI), dipped a toe under the 50.00 centreline yesterday and highlighted trendline support, taken from the low 20.57.

Observed levels:

Short-term action, having noted daily price assembling a bearish candlestick signal around the 200-day simple moving average and H4 support echoing a fragile tone, has eyes on H1 demand at 1.1836/1.1846.

Although the aforesaid demand carries technical weight (H1 Fib confluence), moving lower is perhaps on the cards (thanks to the daily scale), targeting H4 support at 1.1818, closely shadowed by the 1.18 figure on the H1.

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 interesting was February also came within striking distance of trendline resistance (prior support – 0.4776), sheltered under supply from 0.8303/0.8082.

March erased 1.5% over the Month and probed February’s lows. Should subsequent Months see sellers take the reins, demand is in view at 0.7029/0.6664 (prior supply).

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:

Partly modified from previous analysis.

AUD/USD concluded Wednesday at session lows, down by 0.7 percent.

The 0.7563 February low—structure delivering support heading into the closing stages of March—may come under fire as a result of yesterday’s weakness.

Resistance on the daily timeframe remains stationed at 0.7817, whereas a dip beneath 0.7563 brings light to demand from 0.7453/0.7384 (dovetailing closely with a 100% Fib extension at 0.7465 and a 1.618% Fib projection at 0.7389). Technicians will also note the 200-day simple moving average circling nearby at 0.7394.

Trend studies reveal the unit has been higher since early 2020.

As for the RSI oscillator, the value is reinforced off channel support, taken from the low 43.70, and is currently nearing the underside of 50.00.

H4 timeframe:

0.7668 resistance (positioned below supply at 0.7696/0.7715, as well as a trendline resistance, printed from the high 0.8007, and a 50.0% retracement value at 0.7689) made its way into the fight in recent movement, generating a one-sided decline on Wednesday. Aside from last Friday’s lows around 0.7592, support is not expected until a Quasimodo formation at 0.7529, stationed nearby a trendline resistance-turned support, taken from the high 0.7805.

H1 timeframe:

As evident from the H1 timeframe, price action welcomed the 0.76 figure in recent hours, a level joined by a Quasimodo support at 0.7596 and a 50.0% retracement value from 0.7603.

With buyers showing interest, a test of the 100-period simple moving average around 0.7631 could be in the offing today, followed by a possible push for Quasimodo resistance at 0.7638. In the event 0.76 fails to draw follow-through bullish interest, demand at 0.7558/0.7575 could make an entrance.

RSI flow, as you can see, is currently on the doorstep of Trendline resistance-turned support, taken from the high 69.00, with a push lower likely to also engage oversold levels, in particular support at 19.40.

Observed levels:

Longer-term action, based on the monthly timeframe, shows sellers could take the wheel, implying that a possible dip beneath the 0.7563 February low could form on the daily scale.

Shorter-term space, on the other hand, currently demonstrates bullish intent off 0.76 on the H1, perhaps targeting Quasimodo resistance at 0.7638. Though should H1 sweep under the round number, intraday sellers may interpret this as a bearish cue (in light of the bigger picture), targeting at least demand at 0.7558/0.7575.

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