(Technical change on this timeframe is often limited, though serves as guidance to potential longer-term moves)

Closing the book on the month of June had EUR/USD–in the shape of a near-full-bodied bearish candle–touch gloves with familiar support at $1.1857-1.1352 and erase 3.0 percent.

A bullish revival shines light on 2021 peaks at $1.2349; additional enthusiasm welcomes ascending resistance (prior support [$1.1641]).

Month to date, July trades 0.5 percent lower.

Based on trend studies, a primary uptrend has been underway since price broke the $1.1714 high (Aug 2015) in July 2017. Furthermore, price penetrated major trendline resistance, taken from the high $1.6038, in July 2020.

Daily timeframe:

Technical Structure Unchanged from Previous Analysis.

Since mid-June, the daily timeframe has been carving out a falling wedge ($1.1848/$1.1975), a pattern accommodating two tests at either side of the structure. Note some technical analysts prefer wedge formations to display at least three tests.

Nevertheless, in the event price continues to compress within the falling wedge, Quasimodo support at $1.1688 is likely to make an entrance, arranged south of 31st March low at $1.1704 (a place sell-stops will be tripped).

Any upside attempts (a breakout above the current wedge pattern) reignites interest at the 200-day simple moving average, circling $1.2002 (sheltered beneath supply at $1.2148-1.2092).

With regards to trend, we have been somewhat rudderless since the beginning of the year, despite healthy gains in 2020.

Out of the relative strength index (RSI), the value occupies trendline support-turned resistance (around 40.00), extended from the low 29.54. Resistance is also close by at 51.36, serving reasonably well since November 2020. A breakout above 51.36 signals momentum is to the upside (average gains surpass average losses) and, therefore, traders could observe a breakout above the noted falling wedge.

H4 timeframe:

Technical Structure Unchanged from Previous Analysis.

Aside from June’s downside bias, technical areas to be mindful of remain at Quasimodo support from $1.1749 and Quasimodo resistance coming in at $1.1880.

Fibonacci studies reveal a 61.8% Fib retracement at $1.1890, plotted south of a 38.2% Fib retracement at $1.1906.

H1 timeframe:

Wednesday observed the dollar index (ticker: DXY) snap a four-day winning streak amidst a recovery in risk appetite. The benchmark 10-year US Treasury yield rose more than 5 percent, testing 1.29%. Additionally, risk sensitive currencies rose and major equity benchmarks voyaged north.

Technically, H1 finished European trading at the lower side of $1.18, a handful of pips above the 100-period simple moving average around $1.1794. Above the round number, traders will note Fibonacci structure between $1.1817 and $1.1808 (red zone), situated just beneath resistance at $1.1821.

Alongside current price, the relative strength index (RSI) is bound for overbought settings, loitering around 60.00. A test of overbought–in particular resistance at 78.97–considering the downside bias since June, is likely to capture the attention of bears.

Observed levels:

Short term, based on H1 chart studies, a whipsaw through $1.18 into Fibonacci resistance between $1.1817 and $1.1808 is enough to perhaps gather sellers on the back of buy-stops fuelling willing offers.

How much of a bearish presence a $1.18 whipsaw yields is tough to estimate. Although current sentiment favours lower levels, the monthly timeframe trading from support at 1.1857-1.1352, together with the daily timeframe in the process of chalking up a falling wedge reversal pattern ($1.1847/$1.1975), and space for H4 buyers to explore higher, could weigh on any downside attempt from $1.1817-1.1808.

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