Technical Analytics Report

EUR/USD: Technical Analysis Report 05 Feb 2021


Monthly timeframe:

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

 Following the break of long-term trendline resistance (1.6038) in July, and subsequent break of supply at 1.1857/1.1352 in August, EUR/USD, by way of two back-to-back bullish candles, welcomed 2021 in good health.

 While additional upside towards ascending resistance (prior support – 1.1641) may eventually materialise, an 1.1857/1.1352 retest is also on the cards in view of February’s near-1.5 percent correction.

 The primary uptrend has been in play since price broke the 1.1714 high (Aug 2015) in July 2017.

 Daily timeframe:

 Europe’s shared currency tackled trendline support, extended from the low 1.0774, on Thursday and led the unit into the parapets of demand coming in at 1.1923/1.2001.

 Adding to the above, traders will acknowledge the RSI appears bound for oversold territory, currently circling the 34.00 neighbourhood.

 H4 timeframe:

 1.2040/1.2065 serving sellers well as a supply in the early hours of Thursday, aided by a spirited USD advance (the US dollar index registered a fifth successive bullish close), guided EUR/USD aggressively into demand from 1.1962/1.1976 and mildly clipped its lower edge.

 Some fresh air is seen south of 1.1962/1.1976 until price shakes hands with 1.1914/1.1932 demand—an area that reinforced dip-buying heading into the end of November (2020).

 H1 timeframe: 

1.1954/1.1960 demand made an entrance in recent hours and has seen price action modestly pare losses. This, of course, follows the earlier breach of the key figure 1.20, a level widely watched on EUR/USD. 

Interestingly, downstream shows a Quasimodo support level in sight at 1.1942. 

Out of the RSI, the value spun into oversold space yesterday, touching a low of 21.27. The indicator, as you can see, is on course to exit oversold levels, which may be interpreted as a bullish signal for many.

 Observed levels: 

The upper side of monthly demand at 1.1857 lies in wait in the event sellers drill through remaining bids within daily demand at 1.1923/1.2001. A continuation lower remains on the table all the while the DXY continues to explore higher ground. 

On the shorter-term chart, H4 demand at 1.1962/1.1976 having its lower edge nudged yesterday also echoes a bearish narrative. This places a question mark on current H1 demand at 1.1954/1.1960 and throws H1 Quasimodo support in light at 1.1942.


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