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(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Following two spirited months of gains off demand at 0.7029/0.6664 (prior supply), early 2021 may see buyers invade 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]).
Recent developments show a bullish pennant pattern establishing between the 2021 high at 0.7820 and January 4 low at 0.7642.
Technicians will also note the aforesaid pattern balances off support at 0.7647, with supply at 0.7937/0.7890 to perhaps call for attention in the event a breakout higher develops.
In terms of the RSI indicator, the value is entrenched within a descending channel. Support is seen at 52.00, while resistance is set around 80.19.
Following Monday’s test of demand at 0.7665/0.7644 (prior supply), the pair’s focus remains on reaching resistance at 0.7805 and possibly resistance at 0.7843.
A detailed view of price action shows a recently established descending wedge (0.7782/0.7751) formed off 0.7750 support. To add to this, we also have the RSI rebounding from the 50.00 centreline.
From a technical perspective, based on the four charts analysed, buyers appear to have the upper hand. Scope to approach higher levels on the monthly timeframe, together with H4 price displaying room to reach at least 0.7805, places H1 breakout buyers above the descending wedge pattern in a healthy position, with 0.78 targeted.
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