Technical Analytics Report

EUR/USD Technical Analysis Report 21 Jan 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, 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 (0.9 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 –

Demand from 1.1923/1.2001 continues to hog the technical spotlight. This is 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 retests the lower side of trendline resistance (prior support). The value currently stands at 45.60.

H4 timeframe:

Early trading Wednesday forged a striking bearish outside reversal candle after joining hands with a 61.8% Fib level at 1.2156, sheltered just south of a resistance level at 1.2164 and a 38.2% Fib level at 1.2166.

Demand at 1.2040/1.2065 is another prominent range on the H4 chart, accompanied by a Fib cluster at 1.2063/1.2071 (38.2% Fib level/127.2% Fib projection).

In the event the aforesaid demand steps aside, daily demand highlighted above at 1.1923/1.2001 is lying in wait.

H1 timeframe:

Alongside RSI bearish divergence within overbought space, EUR/USD tunnelled lower out of supply from 1.2165/1.2149 on Wednesday. Consequently, the pair dived through the 100-period simple moving average and tested the energy of 1.21 support. As you can see, although buyers are attempting to secure 1.21, the 100-period simple moving average is proving effective resistance.

Downstream, technical eyes are likely to shift towards 1.2050 support and associated support at 1.2058. Traders will note the aforesaid levels are located within H4 demand at 1.2040/1.2065.

With reference to the RSI indicator, the value recently rebounded from oversold levels and currently hovers within close range of 50.00.

Observed levels:

Trend in this market remains strongly to the upside.

1.21 on the H1 appears feeble and lacks higher timeframe support.

Immediate support beyond 1.21 is H4 demand at 1.2040/1.2065 and associated Fib cluster at 1.2063/1.2071 (38.2% Fib level/127.2% Fib projection), an area also holding H1 support around the 1.2050 region.

Should H4 demand break down, daily demand at 1.1923/1.2001 could then be the place to be.


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