Friday 19th February 2021: Technical Outlook and Review

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EUR/USD:

Looking at the weekly chart, we can see that prices are testing the support area of our ascending channel at 1.200, which coincides with the 50% Fibonacci retracement and 78.6% Fibonacci extension. We could see a further upside to test our resistance area at 1.2300, in line with the graphical swing high resistance and 78.6% Fibonacci extension. On the daily time frame, prices are holding nicely above the ascending trend line and support area at 1.200 which can also be found on the weekly time frame.

On the H4 timeframe, prices are facing bullish pressure from our support at 1.20336, in line with our graphical swing low support area and 61.8% fibonacci retracement. We could see limited downside before price reaches our resistance area at 1.21558, in line with the graphical swing high resistance level.

Areas of consideration:

  • 20336 support area found on H4 time frame
  • 21558 resistance level found on H4 time frame

GBP/USD:

Looking at the weekly chart, we can see that prices are holding nicely above our ascending trend line and weekly support area at 1.35000 where we could see a further upside to the weekly resistance level at 1.43000, in line with the graphical swing high area and 78.6% Fibonacci extension. On the daily time frame, our support area at 1.35000 – 1.36000, which is also found on the weekly time frame, coincides with the 23.6% Fibonacci retracement.

On the H4 timeframe, prices are approaching our key support area at 1.39396, in line with our horizontal pullback support and 23.6% fibonacci retracement where we could see a bounce above this level towards our resistance target at 1.4000, in line with our 100% fibonacci extension.

Areas of consideration:

  • 4000 resistance area found on H4 timeframe
  • 39396 support area found on H4 timeframe

AUD/USD:

From the Weekly timeframe, we can see that the price has pushed further towards the previous high at 0.78207, from the week of 4 January (2021), the price is still on the bullish trend-making higher points since March (2020). On the Daily timeframe, the price has successfully reversed from the Quasimodo resistance of 0.7784, in line with the previous high. On H4, we could see that AUDUSD has tapped on the support area of 0.77361 as well as coming close towards the 0.7791 resistance zone. A new level of support at 0.77496 in line with 61.8% and horizontal graphical area may be our port of call where we could potentially see price making it ways towards the -27% retracement, in line with major resistance zone between  0.7791 and 0.7810 consisting of the -61.8%, 161.8% retracement.

Areas of consideration:

  • H4 bouncing from Support area of 0.77496, a bounce may occur to push prices back into resistance zone of 0.7791
  • Price could reverse and consolidate approaching the resistance zone between 0.7791 and 0.7810

USD/JPY

The US dollar went lower on Thursday,  where it tapped the 105.61 support and steadied there ( 38.2% fib retracement and horizontal overlap support ). If price broke below the support level at 105.61 where the 38.2% fib retracement and horizontal overlap support are , we could see sellers step in further and push price lower again towards the 105.122 support level.

Against the backdrop of the H4 timeframe, price broke out of the weekly declining wedge (106.94/104.18) and saw a slight pullback, before pushing up higher again. On the daily chart, we see that price is now pushing up to test the MA (200) again after making a slight pullback. This shows us room for bullish momentum upwards to test the resistance level at 106.060 level. However, before that on the H4 chart, we couldn’t ignore the support at 104.58 where the horizontal pullback support is.

Areas of consideration:

  • 06 resistance on the Daily timeframe is a possible upside target
  • 61 support level on H4 in line with the 38.2% fib retracement and horizontal overlap support

USD/CAD:

Looking at the weekly chart, prices have respected the descending trendline drawn from 13 April (2020) high and is approaching the 2018 Yearly opening level at 1.2579. It is important to note that the long-term picture has pointed the direction down (trend) since March (2020). In the daily time frame, the price has made a pullback towards the descending trendline. And on the H4 timeframe, we are seeing price reversing after another touch with the  descending trendline at 1.2713, currently, the price has broken beneath the January’s opening level as well as a major figure of 1.27. We may possibly see the continuation of the bearish trend towards the -27%, 161.8% retracement and major figure of 1.26

Areas of consideration:

  • H4 may drop further from 1.2713 , 78.6% retracement, and descending trendline resistance, towards -27%, 161.8% retracement and major figure of 1.26.
  • Weekly and Daily both showing bearish momentum in the longer-term picture, in line with a bearish view.

USD/CHF:

USD/CHF remains under strong bearish pressure, as we see it hold under the major weekly resistance level at 0.90500, in line with our 78.6% Fibonacci extension and 61.8% Fibonacci retracement levels. The daily chart also shows us that price is holding under the descending trendline and moving average resistances, signalling a stronger move down south. It is possible for price to face more downside towards the weekly support at the 0.88450 level.

Looking at the H4 timeframe, we see that price has reversed and pushed lower, holding below the weekly resistance level at 0.90500. With the Stochastic indicator also reversing from the resistance level at 93.76 where it has reacted from in the past, we expect price to face further downside and push lower down south, with the weekly 0.88450 support level as a possible downside target, in line with our -27.2% Fibonacci retracement. Otherwise, should price break above the 0.90500 resistance level, we can expect price to swing and test the descending trendline and moving average resistances on the weekly and daily timeframes.

Areas of consideration:

  • USD/CHF continues to show strong bearish pressure, as price holds below the trendline and moving average resistances.
  • 90500 level is an important resistance level to watch.
  • 88450 support level is a potential downside target for sellers.

Dow Jones Industrial Average:

On the weekly chart, price continues to hold above 31272 as markets made a new high. Traders can expect to see price pushing even higher towards the next resistance at 32643. Otherwise, failure to hold above 31272 could mean that this is a fake out and probably pull back towards 29341 support. With no change for the Daily, price continues to hold very strongly above ascending trendline support. Traders should be careful when deciding to trade any short term pullbacks as the bullish momentum on the longer term is very strong.

On the H4, price drifted sideways holding between key support at 31272 and resistance at 31773. We note that Technical indicators continue to show room for further bullish upside. A break and close above 31773 will see more buyers entering with their longs to push price higher, possibly towards 33019. Otherwise, failure to hold above 31272 could see price swing back and come back to the 61.8% Fibonacci retracement level and moving average support at 30521.

Areas of consideration:

  • Intraday resistance at 31773 level to watch
  • Intraday support at 31272 level to watch

 

XAU/USD (GOLD):

On the weekly timeframe, gold is still holding above long term moving average support and is testing 1764 support, above which there could be a possibility of a bounce reaction. On the daily chart, with price now testing 1764 support, buyers could possibly consider this level and add to their longs while looking at 1875 resistance as a possible target. Otherwise, we could see price breaking below 1764 and pushing towards descending channel support at 1670..

On the 4H timeframe, price is now sitting above key weekly support at 1764. With short term stochastic indicator testing support where price bounced in the past, it is possible that we see a low probability bounce reaction above our weekly support and have buyers pushing price towards 1789 resistance. However, a weekly close below 1764 will see price drop lower towards next support at 1740.

Areas of consideration:

  • Watch closely key weekly support at 1764

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