Jan 27 2021 0
The USD rebounded in the first half of Tuesday's session, but then fell sharply in the second half of the session, causing some notable reversals on the charts.
- Markets have begun to worry about the timing and scale of US fiscal stimulus measures, which weighed heavily on market sentiment ahead of the Federal Reserve meeting. Some Republican lawmakers oppose the size of the stimulus bill.
- Data from the CFTC shows betting that the USD continues to decline hit its highest level in almost a decade last week.
- President Joe Biden's candidate to lead the US Commerce Department is expected to deliver tough messages, pledging to act aggressively against China's trade injustices.
- UK unemployment hit its highest level in nearly five years in the three-month period from November when coronavirus cases started to rise again, but it wasn't as bad as forecast.
After the pin bar signal around the downtrend line, the price has dropped to the support of 103.6, but has not been able to break this level. In the short term, we expect the price to continue going down, approaching the bottom of the short-term down channel. However, it is still important to note the possibility that the price can break the upper long-term trend line. In this scenario, the bulls should only buy when the price successfully breaks down of 104.4.
The price is still moving within the short-term uptrend channel - the price range is the flag pattern we mentioned in the previous session. However, this continuation pattern contradicts the double bottom pattern forming around 1.21. Therefore, we need to wait for either pattern to fail before making a decision. In the new session, you should pay attention to the threshold of 1.215. If it breaks, the price is likely to approach the 1.225 zone. In addition, if the price breaks down to the lower boundary of the flag pattern, the possibility of further decline in price will be strengthened.
After creating a bullish pin bar signal around the confluence area of 1.362, the price rebounded sharply and once again violated the psychological level of 1.37 to approach the 1.375 zone. The uptrend is very good. The price also re-tested this peak area quite many times recently, so the possibility of it being broken increased. In that case, trend traders may consider buying orders to the 1.385 - 1.390 zone.
Prices fell as expected after a rejection signal appeared around the downtrend line. Short traders may consider narrowing the SL and expecting the price to drop to the bottom of the current sideways price zone. For reversal traders, note the 1.28 zone. Only take actions when this area is broken.
The price could not cross the bottom of 0.767 but bounced back to retest the upper boundary of the short-term down channel line once again. This is the 4th check in a short while and the boost is also pretty good. We suspend our sell strategy and wait for the next signal. Pay close attention to the 0.78 area. If this zone is broken, the target will be around 0.79.