EUR/USD: Technical Analysis Report 26 Jan 2021
US Dollar Index Holding North of 90.00 Ahead of US CB Consumer Confidence Data
(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.
This—despite January’s modest 0.6 percent slide—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.
Partly modified from previous analysis –
Although price warmed to a 38.2% Fib level at 1.2059 last week, demand at 1.1923/1.2001—an area complemented by trendline support (1.0774)—is seen lying in wait a few pips south. Sustained buying, on the other hand, invites the possibility of retesting 2021 tops at 1.2349.
The RSI value gently spun lower around the 50.00 centreline on Monday. Familiar resistance, nonetheless, is visible at 60.30.
Resistance at 1.2179 is proving an effective ceiling on the H4 chart, shutting down buyers on Monday and delivering a low at 1.2116.
Demand at 1.2040/1.2065 calls to the downside (holds 38.2% Fib on the daily timeframe at 1.2059), while a 1.2179 breach shines light on 1.2214 resistance. Interestingly, the aforesaid level is sheltered under supply coming in from 1.2282/1.2245. Fib fans will also note the 61.8% Fib level inhabits territory at 1.2241.
In tandem with H4 resistance at 1.2179, a H1 AB=CD resistance at 1.2177 (placed below the 1.22 level) helped limit upside yesterday and directed intraday activity through the 100-period simple moving average at 1.2146.
Seeing the aforesaid 100-period SMA echo (at the time of writing) resistance may have sellers attempt to rush yesterday’s session low at 1.2116 and take aim at 1.21.
Also of technical importance is the RSI indicator dipped a toe in oversold territory on Monday though has since recovered, with eyes on the 50.00 centreline (currently standing as an S/R area).
Cemented within a clear uptrend, with monthly price observing higher levels, this could provide buyers with enough conviction to maintain a bullish position above the daily timeframe’s 38.2% Fib level at 1.2059.
Shorter-term technical structure, on the other hand, has H4 resistance at 1.2179 holding back upside attempts and the H1 retesting, and currently holding, the 100-period simple moving average. With this, an intraday push to 1.21 could be in store.