Europe’s single currency firmed Monday, benefitting from continued decline in US Treasuries and the dollar’s demise. the DXY cracked 95.00, levels not seen since October 2018. 1.14 was taken to the upside in early trade, with the latter pencilling in support for the remainder of the day. 1.15 now lies in wait on the H4 timeframe, offering possible resistance, followed closely by a Quasimodo formation at 1.1532, extended from early January. The relative strength index (RSI) is seen trading within overbought territory off peaks at 85.00.
The story on the bigger picture has the pair tackling the 2019 yearly opening level from 1.1445 on the weekly timeframe – a noted port of resistance, boasting incredibly strong history. This followed last week’s action slicing through long-term weekly channel resistance, extended from the high 1.1569. With respect to the primary trend, the breakout above the mentioned channel resistance may see the beginning of a long-term trend change take place.
Daily flow jumped through two notable Quasimodo resistances at 1.1349 and 1.1419 yesterday, leading to a test of Quasimodo resistance at 1.1496, which is seen capping upside for the time being. A continued dip will likely explore the possibility of forming support off 1.1419, with a break likely headed for 1.1349.
Longer-term flow has weekly price flirting with the 2019 yearly opening level at 1.1445, indicating a pullback could be in store. A similar picture is seen on the daily timeframe off Quasimodo resistance at 1.1496, though support is likely to develop off 1.1419.
In light of the higher-timeframe’s perspective, the combination of Quasimodo resistance on the H4 at 1.1532 and the round number 1.15 could be an area of interest today, offering a base to fade buying, targeting 1.14ish. Conservative traders may opt to wait for additional confirmation before pulling the trigger; however, this is trader dependent.
Disclaimer: The information contained in this material is intended for general advice only.