17 – 21 January 2022
The main support at $0.6968-0.7242 continues to play a crucial role on the weekly timeframe. The bulls, as you can see, have taken a slightly bullish stance until the end of 2021. 2022, on the other hand, has been undecided so far. If the buyers continue pushing higher, resistance is forming at $0.7501. Maneuvering below $0.6968-0.7242 reveals support at $0.6673 and a 50.0% retracement at $0.6756.
Since mid-February 2021, a slight downward bias has been observed. This follows higher prices since pandemic lows of $0.5506 (March 2020). However, it is important to note that from the monthly timeframe, the unit was entrenched in a large-scale downtrend from mid-2011.
Resistance – composed of 61.8% Fibonacci retracement at $0.7340, 100% Fibonacci projection at $0.7315, upside resistance, taken from the low of $0.7106, from trendline resistance, taken from the high of $0.7891 and the 200-day simple moving average at $0.7423 – came within a pip of making an entry on Thursday and closed through a shooting star candle (bearish pattern). Friday responded with an almost full-bodied bearish candle, wiping out 1.0%.
Apart from the low of $0.7130 (7and January) and the $0.7082 (20and December ) weak and obvious support at $0.7021 calls attention.
The Relative Strength Index (RSI) continues to hover around the 50.00 midline. Therefore, sellers of $0.7423-0.7315 will likely watch the indicator to secure the position below the 50.00 neighborhood this week, a move that informs market participants that average losses exceed average gains.
Key resistance drawn from $0.7323-$0.7308 was a highlighted area in recent analysis, receiving price action on Thursday.
Thursday’s response and Friday’s additional softness broke through support at $0.7250 (now a marked resistance level). Demand for $0.7169-0.7187 is next in the bears’ sights, with Quasimodo support a little below at $0.7146.
After a circular saw north of $0.73 (within H4 main resistance at $0.7323-$0.7308) and a subsequent head and shoulders formation ($0.7293, $0.7314, 0, $7294), the euro plunged against the dollar on Friday – removing support at $0.7273 – and eventually bumped heads with $0.72.
South of the psychological base, Quasimodo support is visible at $0.7168, accompanied by near demand at $0.7126-0.7141.
Supporting the modest “bounce” from $0.72 is the Relative Strength Index (RSI) pushing the oversold space. A decisive exit from this range informs short-term traders that the average gains are starting to outweigh the average losses over this period: positive momentum. Support for the indicator remains nearby at 7:17 p.m.
Technical levels observed:
The near test of daily resistance between $0.7423 and $0.7315 caught the attention of bearish players in the second half of last week. Although the weekly price remains within the main support at $0.6968-0.7242, the daily stream may aim for lows around $0.7130 and $0.7082, followed by support forged from 0, $7021.
After noting that sellers could focus on H4 demand at $0.7169-0.7187, dip below $0.72 to test H1 Quasimodo support at $0.7168 (plot just below H4 demand) is a possible situation this week. Alternatively, H1 offers may remain at $0.72, eyeing a potential return to H1 resistance at $0.7273. The holding of $0.72 is also bolstered by oversold RSI testing and (from a longer time frame perspective) weekly price inhabiting major support.