Dollar Index approaching daily support, EUR / USD vulnerable to the upside
EUR / USD:
Recent trade shows buyers are recovering from the main support at 1.1473-1.1583. Follow-up buys are on the table, potentially fueled by long-term selling stops that fell below $ 1.1612 (2020) lows.
In the event that buyers fail to agree on higher prices, the south of current support shines the technical spotlight on a 61.8% Fibonacci retracement at $ 1.1281, held above of a Fibonacci projection of 1.618% starting at $ 1.1228.
A handful of pips ahead of Fibonacci support between $ 1.1420 and $ 1.1522, EUR / USD bulls entered an offensive phase on Wednesday, motivated by lower US Treasury yields and the weaker dollar. Note that the aforementioned Fibonacci support is stuck to the bottom of the main weekly period support.
Resistance demands attention at $ 1.1614, with a breakout unmasking Quasimodo support turned resistance at $ 1.1689.
Outside of the Relative Strength Index (RSI), the value recently resulted in a hidden divergence within oversold territory. The midline of 50.00 is now a watched level; movement north of the latter signals positive momentum.
Wednesday’s bullish story lifted the currency pair above $ 1.1563 and in recent hours above channel resistance has extended from the high of $ 1.1846. The breach of the aforementioned levels draws attention to the resistance from $ 1.1622 — pegged a few pips above the daily resistance at $ 1.1614.
Medium-term southerly sentiment since June, however, could weigh more. With that, $ 1.1622 serves as the foundation that sellers could emerge from if they were to fight.
Refreshing weekly highs at $ 1.1593 – after breaking Monday’s session high of $ 1.1587 – draw attention to $ 1.16. Addressing this psychological level could trigger a boost to the nearby Quasimodo resistance at $ 1.1605, plotted with an 88.6% Fibonacci retracement at $ 1.1603 and a 1.618% Fibonacci projection from 1. , $ 1604.
Traders are also advised to consider the possibility of a spike towards the Daily and H4 resistances, located above the H1 resistances rated at $ 1.1614 and $ 1.1622 respectively.
Technical levels observed:
Between $ 1.1622 and $ 1.16 represents the key resistance, taken from the daily time frames, H4 and H1. The price respecting this zone suggests a lack of bullish interest from the main weekly support at 1.1473-1.1583. The reversal of said resistance, on the other hand, indicates an upward force.
CAD / USD:
Buyers are starting to emerge from major support at $ 0.6968-0.7242. Major resistance at $ 0.7849-0.7599 is a reasonable target, although failure to preserve gains opens support at $ 0.6673.
Weekly scale trend studies show we are higher since the start of 2020. Therefore, the response of $ 0.6968 to $ 0.7242 could be the start of a downward buy attempt to join the current trend.
The Australian dollar extended its bullish presence on Wednesday, approaching weekly highs at $ 0.7385.
Decorating the chart with further upside has prime resistance at $ 0.7506-0.7474 in sight. Immediately above here, resistance turned support for Quasimodo is at $ 0.7621, which closely approximates the 200-day simple moving average at $ 0.7571, a 61.8% Fibonacci retracement at $ 0.7585 and a 100% Fibonacci projection at $ 0.7551.
The latest Relative Strength Index (RSI) reveals that the value has crossed the midline of 50.00, advising traders that average gains exceed average losses: momentum on the rise.
Leaving support at $ 0.7317 unopposed, the AUD / USD focuses on Quasimodo resistance at $ 0.7394 (included in a 1.618% Fibonacci expansion at $ 0.7386 and a Fibonacci projection of 1.272 % to $ 0.73998).
The reversal of the noted resistance focuses on Quasimodo resistance parked at $ 0.7441.
For those who have read Wednesday’s tech briefing, you may recall the following (in italics):
Similar to yesterday’s analysis, we know that the price over the weekly period comes from the major support at $ 0.6968-0.7242, in addition to the daily period presenting a possibility of approaching resistance. at $ 0.7506-0.7474.
This, again, positions the H1 support at $ 0.7339. [since removed] as seen by base buyers, as well as major H1 support at $ 0.7320-0.7327 – H4 support can be seen below the aforementioned area at $ 0.7317.
As the chart shows, the major first half support at $ 0.6968-0.7242 made its way as US trading hours approached, a move attracting healthy bullish force. The reversal of the weekly highs at $ 0.7385 highlights $ 0.74, which is just above the H4 resistances between $ 0.7398 and $ 0.7386.
Technical levels observed:
Attention is focused on $ 0.74 on the H1 scale, and the H4 resistance between $ 0.7398 and $ 0.7386. However, sellers are likely to ask for additional confirmation before committing as the weekly and daily calendars show no resistance up to $ 0.7506-0.7474 on the daily calendar.
USD / JPY:
The supply at ¥ 113.81-112.22 remains under considerable pressure, with neighboring resistance willing at ¥ 114.38. Eliminating the aforementioned offer may raise eyebrows, given the area capping downward since April 2019.
Sellers taking the wheel are leading the flow towards familiar demand at 108.40-109.41 – arranged north of descending resistance support, drawn from the high of 118.61.
As for the immediate trend, we have been moving forward since the start of this year.
The Japanese yen welcomed some demand on Wednesday, rose on higher bond prices and a largely weak dollar. Wiping out the new 2021 highs at 113.81, USD / JPY bears break into the walls of major resistance at 113.93-113.07, a capped area at the upper limit of the weekly supply.
The area above the current supply shows weekly resistance from 114.38 running with two Fibonacci projections at 1.272% on the daily scale at 114.12 and ¥ 114.48.
From the Relative Strength Index (RSI), after emerging support at 56.85 early last week, the value of the indicator is exploring the overbought space. However, with the trend north this year, overbought signals need to be viewed against this background.
For those who have read the technical briefing on Wednesday, you may recall the following points (italics):
Recognizing active weekly and daily supply areas, H4 activity shakes hands with channel resistance, extended from the high of 112.05, along with a 100% Fibonacci projection at 113.74 and expansion of Fibonacci from 1.618% to 113.90.
A retracement of the aforementioned resistances highlights the support at 112.63, closely related to channel support, drawn from the 109.12 low.
As you can see, the sellers have indeed demonstrated the resistance of the channel, which as pointed out above could cause the currency pair to make its way to the support at 112.63.
The recent bearish pressure from resistance at 113.71 yen generated a double top formation at 113.79, drawn with a neckline of 113.35 which was recently crossed. The model’s profit target, measured by taking the distance from the highest peak of the pattern to the neck line and extending that value from the break point, is in the decision point at ¥ 112.87 -113.03, an area also encompassing psychological level ¥ 113.
Technical levels observed:
Knowing that we have an active weekly and daily bid, as well as H4 reacting from channel resistance, extending from the 112.05 high and H1 recently breaking through the neckline of a double top pattern at 113.35, the USD / JPY could drop on decision point H1 to ¥ 112.87-113.03.
GBP / USD:
The demand-side supply at $ 1.3629-1.3456 continues to emphasize an atmosphere of distress after seeing its lower limits capped in late September. Despite the recent rally, it’s important to note that price also closed below the neckline of a double-top model ($ 1.4241) at $ 1.3669, signaling that the bears are looking to take matters into their own hands. .
The double-top model’s profit target, measured by taking the distance from the highest peak to the neck line and extending that value lower from the break point, is around $ 1.3093. Sellers of conservative models are likely to pursue a candle close below $ 1.3629-1.3456 before pulling the trigger.
The decision point of $ 1.3736-1.3659 remains an important area in this market. Adherence to the aforementioned decision point helps confirm bearish intention under the demand for weekly supply at $ 1.3629-1.3456, and reinforces the idea of a successful double-top pattern. .
Trendline resistance, drawn from the top of $ 1.4250, and the 200-day simple moving average at $ 1.3840 are seen above the current decision point; Below is the low of $ 1.3412 (September 29), with subsequent sales highlighting a Fibonacci cluster (support) around $ 1.3164.
Based on the Relative Strength Index (RSI), the indicator value attempts to travel above the midline of 50.00. The latter’s compensation informs market participants that momentum is on the rise: average gains exceed average losses.
The support of $ 1.3570 proves difficult to overcome on the H4 scale, directing the flow towards an upward resistance, projected from the low of $ 1.3572. Grabbing said level guides resistance at $ 1.3750-1.3721 into the light, along with a near 100% Fibonacci projection at $ 1.3784.
US Hours on Wednesday saw prices break through “London” lows at $ 1.3602 and test the spunk of $ 1.36. Although stretching to a low of $ 1.3588, GBP / USD bulls subsequently showed a strong interest in the upside, which in recent action drove the price to a resistance at $ 1.3658 and an ascending resistance, drawn from the low of $ 1.3544.
The $ 1.3658 clearance exposes $ 1.37 and Quasimodo’s resistance fell 10 pips above to $ 1.3710.
Technical levels observed:
The daily calendar decision point at $ 1.3736-1.3659, uniting with H1 resistance at $ 1.3658 and rising resistances on H1 and H4, offers robust resistance to work with.
Alternatively, splitting the current H4 and H1 resistances may attract bearish curiosity of $ 1.37 and Quasimodo resistance at $ 1.3710 on the H1, both of which are within the noted daily decision point.