Technical Analytics Report

EUR/USD Technical Analysis Report 20 Jan 2021

January 20th 2021: USD Lower Ahead of the US Presidential Inauguration Day. 

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, buyers made an entrance heading into the close of 2020 and recorded fresh multi-month highs.

This—despite January’s current slide off 2021 pinnacles (0.7 percent)—reasons additional upside towards ascending resistance (prior support – 1.1641) may eventually be on the horizon.

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

Daily timeframe:

Partly modified from previous analysis –

Despite Tuesday’s advance, demand from 1.1923/1.2001 continues to hog the spotlight—a significant zone given it was not only here a decision was made to achieve fresh peaks above 1.2011 (September 1 high), the area is also complemented by trendline support (1.0774).

Interestingly, the RSI value is seen retesting the lower side of trendline resistance (prior support). The value currently stands at 47.50.

H4 timeframe:

Demand at 1.2040/1.2065 made an entrance on Monday, accompanied by a Fib cluster at 1.2063/1.2071 (38.2% Fib level/1.272% Fib projection). Tuesday, as you can see, extended recovery gains from the aforesaid demand and landed price action within close range of resistance at 1.2164, a level boasting history as far back as February 2018. 1.2164 resistance also shares space with a Fib cluster at 1.2156 and 1.2166.

H1 timeframe:

Following the arrangement of RSI bearish divergence (hidden), along with the RSI exiting overbought levels, price action entered a narrow range on Tuesday, balancing off the upper side of a 100-period simple moving average at 1.2115.

Supply at 1.2165/1.2149 is overhead, with a break uncovering the 1.22 level. Traders will note the H4 resistance at 1.2164 is charted within the upper range of the aforesaid H1 supply.

Observed levels:

Partly modified from previous analysis –

The monthly timeframe remains calling for higher levels. However, in light of January’s slide, retesting demand at 1.1857/1.1352 is possible. Daily demand at 1.1923/1.2001, however, could hold back a 1.1857/1.1352 retest, knowing the demand fuses with daily trendline support.

H1 holding off the 100-period simple moving average, with room on both H1 and H4 timeframes to advance, could encourage short-term buying today, taking aim at H1 supply from 1.2165/1.2149 and H4 resistance at 1.2164.

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