Background of different currencies

June 15th 2021: Dollar Motionless Ahead of Looming Fed Meeting

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 a three-month retracement, support at 1.1857-1.1352 made an entrance and inspired a bullish revival in April, up 2.4 percent at the close. May also extended recovery gains, trading higher by 1.7 percent. June, however, is off to a mildly rocky start, down 0.8 percent as of current trade.

April upside—alongside May’s optimism—throws light on the possibility of fresh 2021 peaks in the months ahead, followed by a test of 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:

Technical structure unchanged from previous analysis.

In recent analysis, the chart breakdown highlighted softness south of Quasimodo resistance at 1.2278 since May 25th. This swings the technical pendulum in favour of shaking hands with a 50.00% retracement ratio at 1.1986, a horizontal level sharing chart space with the 200-day simple moving average around 1.1988.

The timeframe’s bearish setting is braced by the RSI value travelling through both support at 51.36 in addition to the 50.00 centreline (a 50.00 cross indicates a weakening of upside movement).

H4 timeframe:

Technical structure unchanged from previous analysis.

Ahead of Wednesday’s impending Fed meeting, Monday’s session echoed an uninspiring tone.

Yet EUR/USD bulls did manage to defend the 61.8% Fib retracement at 1.2094, a value (green) stationed north of demand from 1.2044-1.2071.

Technically speaking, 1.2044-1.2071 boasts a solid floor to be mindful of, infested with Fibonacci studies, including extension levels, expansions and projections.

Space south of demand throws light on support coming in at 1.1990.

H1 timeframe:

For those who read Monday’s technical briefing you may recall the following (italics):

Aided by a 1.618% Fib expansion at 1.2095 and a 1.272% Fib projection at 1.2098, the 1.21 figure embraced price action amidst US hours on Friday. Of course, we can also see 1.21 entered the frame at the same time the RSI indicator’s value dipped into oversold territory and shook hands with support at 14.74.

Another point worth highlighting is breakout stops plotted beneath the 1.2104 June 4th low (blue box). Tripping these orders as price greets bids around 1.21 has so far facilitated what’s known as a bear trap. This, therefore, could fuel additional buying as breakout sellers panic and liquidate (forming additional buy orders).

As evident from the chart, short-term sentiment navigated higher levels; breakout sellers clearly had a bad day on Monday, consequently delivering the currency pair to within striking distance of resistance at 1.2132, aligning to-the-pip with a 38.2% Fib retracement value.

It is important to identify that should price move lower today and challenge 1.21 once again, demand at 1.2075-1.2085 is strategically positioned a touch under the psychological level. North of current resistance, however, shines light on the 100-period simple moving average, currently circling around 1.2156.

Observed levels:

Having seen the daily chart underline possible moves to a 50.00% retracement ratio at 1.1986, and the H1 chart showing signs of demand for lower prices ahead of resistance at 1.2132, retesting 1.21 is possible, from a short-term technical standpoint.

An alternative scenario, of course, is H4 bulls maintain position north of the 61.8% Fib retracement at 1.2094, targeting resistance at 1.2158.

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 battling for position south of trendline resistance (prior support – 0.4776 low) and supply from 0.8303-0.8082. Should a bearish scenario unfold, support is featured at 0.7394, with additional pressure targeting demand at 0.7029-0.6664 (prior supply).

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:

Technical structure largely unchanged from previous analysis.

The daily chart’s technical scenery has been a dull affair since April 20th.

Despite a fleeting whipsaw to a low of 0.7645, resistance at 0.7816 and support from 0.7699 have outlined a range (yellow) since April 20th. However, technicians will note the recent pop south likely damaged the lower range edge, increasing the odds of sellers eventually taking the wheel.

Support at 0.7563 is in view as a potential objective below the current consolidation, deriving additional (dynamic) support from the 200-day simple moving average, circling 0.7542.

Above 0.7816, supply falls in at 0.8045-0.7985.

With respect to trend, we have been higher since early 2020, though we must take into account the currency pair has been mostly directionless since the beginning of 2021.

The RSI shows the value engaging with space beneath the 50.00 centreline, unable to penetrate the latter since mid-May. This warns upside momentum hangs by a thread and a drop in on support from 37.92 could be on the cards.

H4 timeframe:

The technical story out of the H4 chart has the currency pair exploring no man’s land right now, at least according to basic chart studies.

A prominent technical ceiling exists at 0.7782: Quasimodo resistance, while downriver singles out familiar demand at 0.7632-0.7653—helped facilitate a sizeable rally at the beginning of the month.

H1 timeframe:

A closer examination of price action on the H1 chart reveals the unit locked horns with resistance at 0.7722 on Monday, dovetailing closely with a 38.2% Fib retracement at 0.7720, and, heading into the early hours of US trading, pursued lower levels.

0.77—associated with a 61.8% Fib retracement marked in green at 0.7695—calls for attention as workable support, levels that claimed position late Friday and early Monday. Downstream, demand from 0.7634-0.7649 is on the radar.

Presented through the RSI indicator, momentum remains under its 50.00 centreline, a sign bears maintain control for the time being. Structure to be cognisant of are resistance from 72.21 and support at 19.30.

Observed levels:

Based on technical studies, sellers appear to have the upper hand.

This is largely due to the decisive short-term dip from resistance at 0.7222—a location Monday’s technical briefing highlighted as a base sellers may be drawn to—and the daily timeframe threatening to conquer the lower side of its range at 0.7699.

A H1 close south of the 0.77 figure could attract additional bearish curiosity, taking aim at H1 demand from 0.7634-0.7649 (secured within H4 demand at 0.7632-0.7653).

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 cut through descending resistance, etched from the high 118.66.

Although April finished lower by 1.3 percent and snapped the three-month winning streak, May (+0.2 percent) held the breached descending resistance, echoing potential support for the month of June, currently trading higher by 0.5 percent.

Daily timeframe:

Technical structure largely unchanged from previous analysis.

USD/JPY, as you can see, demanded a bullish setting on Monday, ahead of Wednesday’s Fed meeting.

Long-term resistance at 110.94-110.29 (posted under supply at 111.73-111.19) remains centre of attention overhead, sheltered a handful of pips under supply from 111.73-111.19.

108.60ish lows (green oval), followed by supply-turned demand at 107.58-106.85, are positioned downriver.

Trend studies reveal the pair has been trending higher since the beginning of the year, though discovered a top heading into early April.

The RSI continues to oscillate around resistance at 57.00, with the value recently establishing mild bottoms ahead of the 50.00 centreline and attempting to find grip above the barrier. Additional structure can be found at support from 28.19 and resistance drawn from 83.02.

H4 timeframe:

Monday’s supportive tone was likely a welcomed sight for USD/JPY buyers out of demand at 109.02-109.20—an area joining the fight at the beginning of last week and noted in previous analysis as a base to keep an eye on. Technical eyes will also note the nearby trendline support present, taken from the low 107.48.

A key feature to remain aware of is the chart demonstrates scope to rally as far north as supply at 110.85-110.46 (houses Fib studies).

H1 timeframe:

For those who read Monday’s technical briefing you may recall the following (italics):

In fact, this supply [110.18-110.09] is strategically positioned to help facilitate a stop run above 110. Unhinging 110.18-110.09 reveals Quasimodo resistance at 110.41.

What adds credibility to the aforementioned supply zone—recently welcomed price action—is the overriding bearish position out of its base (red arrow), disturbing 109.63 and 109.52 lows. With this, and stops triggered above 110 fuelling 110.18-110.09 offers, a bearish theme is possible back under 110.

From the RSI indicator, the value is engaging with overbought conditions, mildly rotating from session peaks of 78.76.

Observed levels:

Although H1 supply at 110.18-110.09 stresses sturdy position, the concern is higher timeframes. The monthly chart has buyers attempting to take hold of a breached descending resistance, and the daily chart demonstrates scope to test long-term resistance at 110.94-110.29 (located above H1 supply), as well as the H4 chart also displaying room to reach for supply at 110.85-110.46 (boasts a connection with the daily timeframe’s resistance area).

With this in mind, bearish attempts from 110.85-110.46 are unlikely to deliver anything earthshattering. In fact, 110 serving as support should not surprise, with a reaction perhaps targeting 110.29 as an initial base.

GBP/USD:

Monthly timeframe:

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

The pendulum moved 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).

May, despite diminished volatility during March and April, traded firmly on the front foot, up by 2.8 percent. June, however, is somewhat depressed (down 0.7 percent), albeit recording fresh YTD peaks at 1.4250.

Despite the trendline breach (which could serve as support if retested), primary trend structure has faced lower since early 2008, unbroken (as of current price) until 1.4376 gives way (April high 2018).

Daily timeframe:

Technical structure unchanged from previous analysis.

Sterling against the dollar has emphasised an uneventful picture since May 18th, fluctuating between gains and losses south of Quasimodo resistance at 1.4250. Monday finished in the shape of a doji indecision candle.

Support at 1.4003 remains within reach. Demand at 1.3857-1.3940—an important technical area where a decision was made to break above 1.4003 resistance—is also perhaps on the radar.

Trendline support, taken from the low 36.14 on the RSI, recently gave up position, with Monday closing in on the 50.00 centreline.

H4 timeframe:

The passage below was taken from previous analysis (italics):

Since mid-May, the H4 chart has been busy carving out a consolidation between 1.4096 and 1.4219. Interestingly, an additional consolidation pencilled in its presence at the beginning of June between 1.4188 and 1.4083. As you can see, the fact price left the larger upper range resistance at 1.4219 unchallenged informs traders that sellers could be gaining muscle. To confirm this, of course, traders would require a breakdown that not only conquers the lower edge of both consolidations (1.4096/1.4083), but also trendline support, drawn from the low 1.3668, consequently unmasking support at 1.4007.

Monday occupied the lower boundaries of the aforementioned consolidations, within a stone’s throw of trendline support.

H1 timeframe:

Support at 1.4078 and the 1.41 figure invited a bullish phase on Monday, aided by the RSI value scraping oversold territory.

Despite bulls displaying interest, upside momentum levelled off heading into US hours, consequently forming RSI resistance around the 50.00 centreline. We do have the unit currently retesting 1.41, which if accepted, unlocks a possible move to the 100-period simple moving average at 1.4133.

Territory below 1.4078 directs focus to Quasimodo support at 1.4026, as well as the widely watched 1.40 figure.

Observed levels:

The lack of buying interest off H4 range supports (two consolidations exist at 1.4096/1.4219 and 1.4188/1.4083), together with the daily timeframe absent of support until 1.4003, underscores a bearish theme.

Ultimately, to help validate a bearish presence, traders will want to see price below the said range supports and neighbouring H4 trendline support, from the low 1.3668.

Should 1.4078 break, H1 Quasimodo support at 1.4026 and the key figure 1.40 would be in view—joins closely with daily support from 1.4003.

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