The USD index, on the D1 time frame, hit a new 2021 high last week at 96.24. Even so, despite posting a fourth straight week in the green, USD reliability lifted the price towards resistance between 96.37 and 95.80. It is largely made up of Fibonacci ratios, including the 100% Fibonacci forecast from 95.94 (following the AB = CD harmonic pattern).
Additionally, the W1 relative strength index has recorded overbought conditions (on the weekly chart) and the D1 daily time frame RSI could create a bearish divergence around the zone. overbought in the coming days. Any reaction at resistance has a decisive point at 94.96-95.26 for target, followed by support from 94.65 and trendline support, taken from the 89.84 low. .
Another tactic, if the resistance breaks this week. Supporting higher levels is the current trend, which has been established through a series of higher highs and lower lows since the price made contact with support at 89.69 in May. Hence, this strategy. could strengthen the bearish buying scenario between 94.96-95.26 or 94.65 this week.
Week time frame -W1
The Euro fell 1.4% and registered a new 2021 low against the US currency.
However, support is at the 61.8% Fibonacci retracement level at $1.1281 and the 1.618% Fibonacci projection from $1.1237, providing a possible ‘floor’ this week. Harmonic traders will assume the 1.618 percent component represents an ‘alternative bullish AB = CD pattern’. Right on the exchange, resistance is located at $1.1473-1.1583.
Trend studies show that the pair hit a November 2, 2020 low at $1.1603, indicating a major downtrend. Thus, this calls into question the value of current support ($1.1237-1.281).
Daily Time Frame- D1
Quasimodo support is at $1.1213, central on the daily chart. Broken, the next support target lies around the vicinity of $1.0991.
According to the relative strength index RSI, in the oversold area and the beginning of a potential bullish divergence.
The $1.1387-1.1366 decision point served sellers well in the second half of the week, guiding a move to the lows ahead of the Quasimodo support at $1.1243.
$1.1243 is aligned just north of daily Quasimodo support at $1.1213 and is placed within weekly support walls of $1.1237-1.1281.
At the beginning of the European session on Friday, the price fell at $ 1.1361-1.1351 and stopped at $ 1.13.
Demand$1.1235-1.248 appeared briefly upon entering the frame after the $1.13 support level fell from its hold.
From a Technical Analysis point of view
W1 week support at $1.1237-1.281 is key this week. However, noting the milder bearish range on the daily time frame for Quasimodo support at $1.1213 and the bearish weekly trend direction, traders may be left wondering at the $1 price point. 1237-1,281.
The combination of H1 demand at $1.1235-1.248 and H4 Quasimodo support at $1.1243 is notable. Therefore, a rally from $1.1235-1.1248 can be formed.
Before the above can happen, a bearish phenomenon can open below $1.13. Bearish candlestick pattern can offer short-term bearish expectations towards $1,1235-1.248.