The Analytical Overview of the Main Currency Pairs on 2020.12.30

The EUR/USD currency pair

• Prev Open: 1.2214
• Prev Close: 1.2247
• % chg. over the last day: +0.27%

EUR/USD continues to rise and has already updated the highs of the year in the Asian session. However, there has been no rapid progress in the northern direction so far. German Bonds remained on a par while US Treasuries were growing. This is a headwind for the euro bulls.

• Support levels: 1.2151, 1.2130
• Resistance levels: 1.2272

The main scenario for trading EUR/USD is risk-averse buying on a decline. The pair’s withdrawing from the triangle has strengthened the upward signal, but it is necessary to check if the price will fix above 1.2272. In case the day closes below, there will be a “false break-through”, which indicates a southern signal. The indicators are fully tuned for an upward movement.

Alternative scenario: if the price can fix below 1.2220, it is possible that the price will move further to 1.2130, and a break-through of the last point may signal a complete reversal.

• – Pending Home Sales Index (MoM) (Nov) at 18:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3447
• Prev Close: 1.3498
• % chg. over the last day: +0.38%

The pound has won back some of its losses on Monday. Now everything looks like a consolidation near the highs with no hints of selling. However, the fundamental background is starting to signal an impending bearish scenario. UK Gilts decreased by 100 basis points in two days. As a result, the yield spread between the UK and the US securities has narrowed significantly.

• Support levels: 1.3287, 1.3187
• Resistance levels: 1.3623

The main scenario is cautious buying on a decline. Now the technical indicators are demonstrating an increase of bullish potential. The pair is trading above the moving averages. The ADX indicates a significant rise of upward pressure. But the rally from Monday’s lows looks like a pullback after the decrease. “The double top” pattern indicates the need for bulls to be vigilant.

Alternative scenario: if the pair fixes below 1.3498, the northern scenario is likely to reverse and the pair will head towards 1.3287.

The USD/JPY currency pair

• Prev Open: 103.78
• Prev Close: 103.51
• % chg. over the last day: -0.26%

The stock market stepped back, and the US Treasuries lost 20 basis points, so the situation immediately affected the yen. Gold and franc rose in price, which indicates that investors are leaving for defensive assets. It looks like the dollar-yen has lost its last hope for growth this year.

• Support levels: 103.26, 102.89
• Resistance levels: 103.90, 104.15

The main scenario is selling on growth. On Tuesday, the pair closed trading below the moving averages. At the same time, the ADX reacted to the southern movement, which indicates the strengthening of the bearish onslaught. The MACD returned to the negative zone. The price has broken through the lower border of the local channel, which indicates that there are no bulls in the pair.

An alternative scenario assumes a break-through of 103.61 from the bottom up. In this case, the pair may reach the area of 103.90 – 103.98.

• – Pending Home Sales Index (MoM) (Nov) at 18:00 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.2847
• Prev Close: 1.2815
• % chg. over the last day: -0.25%

Oil quotes show a slight increase again, which creates pressure on the pair. An additional bearish driver is the continued decline in the dollar index, which has no reasons for growth so far. Today, traders will be having an eye on the data on US oil inventories, which could cause fluctuations in the Canadian dollar.

• Support levels: 1.2789, 1.2689
• Resistance levels: 1.2954, 1.3079

The main scenario is risk-averse selling. The MACD has moved into the negative zone but is still close to zero values. The ADX still shows an increase in the potential of the southern trend. In this regard, the southern scenario remains relevant. The signal will strengthen with the break-through of 1.2789.

Alternative scenario: if the price manages to return above 1.2838, the pair may resume the upward correction.

• – US crude oil stocks at 18:00 (GMT+2).