EUR/USD Technical Analytics Report 11 Jan 2021
(Technical change on this timeframe is often limited though serves as guidance to potential longer-term moves)
Shortly following the break of long-term trendline resistance (1.6038) in July, and subsequent break of supply from 1.1857/1.1352 in August, buyers made an entrance heading into the close of 2020 and recorded fresh multi-month highs. This reasons additional upside towards ascending resistance (prior support – 1.1641) may be on the horizon.
The primary uptrend has been in play since price broke the 1.1714 high (Aug 2015) in July 2017.
Since late December, upside momentum noticeably slowed. Last Thursday delivered a solid bearish candle after confronting the descending wedge pattern’s (1.2011/1.1612) take-profit target at 1.2318 (yellow), with Friday extending losses and throwing light on 1.2095 support.
Trend on this timeframe remains decisively north, establishing a series of higher highs and higher lows since March 2020 (some will consider this a secondary trend).
In terms of the RSI indicator, following the formation of bearish divergence, the value is seen fast approaching the upper side of 50.00.
From the March 2018 supply at 1.2385/1.2346, mid-week witnessed sellers make a show and eventually bring down trendline support (1.1602). After retesting the lower side of the aforesaid trendline (common viewing after a trendline breach), Friday slipped to a 1.2193 low.
This brings notable S/R at 1.2164 into focus this week, derived from January 2018. Traders will also note the support level joins forces with a number of Fib levels between 1.2154/1.2167.
Heading into Friday’s US session, H1 sellers greeted the lower side of the 100-period simple moving average at 1.2283. This directed moves beneath 1.2250 support to the 1.22 level.
While an end-of-day rebound from 1.22 emerged, resistance at 1.2235 poses a potential problem for buyers, as may 1.2250 resistance. Downstream, south of 1.22, demand appears vacant until around the 1.21 vicinity.
RSI enthusiasts may acknowledge the indicator dipped a toe in oversold territory in the latter part of the week, and is in the process of chalking up a triple-bottom pattern (neckline can be found at 53.94 [black arrow]).
Monthly price is poised to reach for higher levels, though a 1.2095 support retest on the daily timeframe may unfold beforehand.
H4 support at 1.2164 (and associated Fib levels) is likely to make an entrance early this week. Though given the daily timeframe suggesting a 1.2095 test, this implies upside attempts off 1.2164 could be fragile.
Therefore, another possible scenario to be watchful of this week is a H1 close under 1.22, which might be viewed as a bearish cue, with 1.21 ultimately targeted (set just ahead of 1.2095 daily support).