Tuesday 23rd 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 1.21367, in line with our graphical pullback support area and 23.6% fibonacci retracement. We could see limited upside before price reaches our resistance area at 1.21557, in line with the graphical swing high resistance level. A break above this resistance level could see a further push up to our next resistance target at 1.2300, in line with our resistance level found on the weekly and daily time frame.

Areas of consideration:

  • 21367 support area found on H4 time frame
  • 21557 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 38.2% Fibonacci retracement.

On the H4 timeframe, prices are facing bullish pressure from 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 1.4100, in line with our 161.8% fibonacci extension.

Areas of consideration:

  • 4100 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 past the 0.78207 level where the previous high was made and has closed above that level, signalling the continuation of this bullish momentum. On the Daily timeframe, we are able to see that price broke and closed above the Quasimodo resistance at 0.7893 which is also in line with the 127% fibonacci retracement. On H4, AUDUSD reacted off the Daily resistance, major figure of 0.79, and is now retesting the -27% fibonacci retracement level. We potentially see price making its way up North towards the Daily resistance level, 227 and -61.8% fibonacci retracement level at 0.79749.

Areas of consideration:

  • H4 bouncing from support, high-probability set up for rise towards resistance level of 0.79749
  • Weekly and Daily time frame showing strong bullish momentum.

USD/JPY

The US dollar went lower on Monday ,  where it retested the 105.00 figure support and steadied there ( 61.8% fib extension ).Price steadies at the 105 figure support level, we could see buyers step in further and push price higher again towards the 105.76 resistance 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
  • 00 figure support level on H4 and 105.76 in line with the 61.8% fib extension

USD/CAD:

Looking at the weekly chart, price has tapped and then bounced on the 2018 Yearly Opening level of support at 1.2579, and is still respecting the descending trendline drawn from 13 April (2020) high. It is important to note that the long-term picture has pointed the direction down (trend) since March (2020). In the daily time frame, price has closed beneath the previous low from 21 Jan (2021). And on the H4 timeframe, we are seeing a pullback towards the 38.2% fibonacci retracement before returning to test the 1.26 major level and Weekly support level. We are seeing a high probability scenario where price may make it’s way towards the 1.25415 support level, in line with -27% fibonacci retracement and 78.6% fibonacci extension. The next support level would be the 1.25063 Daily support level, in line with 100% fibonacci extension.

Areas of consideration:

  • H4 may reverse from the current 1.26 major figure and drop towards 1.25416 level.
  • Weekly and Daily both showing bearish momentum in the longer-term picture, in line with a bearish view.

USD/CHF:

On the weekly chart, we see that the 0.90500 weekly resistance level is still providing major resistance as price is unable to break above it. The daily chart also shows price holding below the 0.90500 level, descending trendline and moving average resistances. As price continues to face strong bearish pressure, it is possible for USD/CHF to continue the week with further downside.

On the H4 chart, we see that price was unable to break above the 0.89950 resistance level, which is in line with our 76.4% Fibonacci retracement, 50% Fibonacci extension and horizontal swing high resistance levels. In this bearish scenario, we expect price to push further down south to test the 0.88450 weekly support level, which is in line with our -27.2% Fibonacci retracement level. Otherwise, should price fail to hold below the 0.89950 level, we could potentially see a stronger pullback to test the 0.90500 weekly resistance level instead.

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 weekly resistance level, and 0.89950 resistance level is a level to watch on the H4 timeframe.
  • 88450 support level is a potential downside target for sellers.

Dow Jones Industrial Average:

On the weekly chart, price continues to hold above 31272 resistance. 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 continues to drift sideways holding between key support at 31272 and resistance at 31773. We note that Technical indicators continue to show room for further bullish upside. Watch resistance at 31773 closely as a break and close above would mean seeing 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 tested 1764 support, above which there could be a possibility of a bounce reaction. On the daily chart, with price tested and bounced above 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 push towards descending channel support at 1670..

On the 4H timeframe, price is now testing graphical overlap resistance and 50% Fibonacci retracement level at 1812. With stochastics testing resistance, we see a medium probability scenario where 1812 resistance could very well see short term intraday sellers coming in with selling pressure to push price towards 1789 support. Otherwise, failure to hold below 1812 will see price test next big resistance at 1875.

Areas of consideration:

  • Watch closely H4 resistance at 1812

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