The Analytical Overview of the Main Currency Pairs on 2020.12.31

The EUR/USD currency pair

• Prev Open: 1.2248
• Prev Close: 1.2296
• % chg. over the last day: +0.39%

EUR/USD accelerated growth, although there were not many drivers for this. Everything now looks more like a pre-New Year rally, in which the dollar is declining in most cases. The yield on German Bonds continued to fall, which casts doubt on the further growth of the euro. However, the chart shows a consolidation above the December 18 high and a new annual record is set.

• Support levels: 1.2353, 1.2414
• Resistance levels: 1.2216, 1.2151

The main scenario for EUR/USD trading is cautious buying on a decline. Technically, the pair is not yet giving hints of the end of the northern trend. The price is confidently holding in the local ascending channel and above the moving averages. However, divergence began to form on the MACD, and the trend potential indicator is declining. Against this background, long positions must be insured and caution should be exercised when opening new ones.

Alternative scenario: if the price can consolidate below the level of 1.2272, the price may move further to 1.2236 – 1.2216, and the breakdown of the last point may signal a complete reversal.

• – 16:30 (GMT+2) The number of initial claims for unemployment benefits in the United States.

The GBP/USD currency pair

• Prev Open: 1.3497
• Prev Close: 1.3621
• % chg. over the last day: +0.91%

The pound renewed its annual highs given Boris Johnson’s support from the House of Commons. But as it is the case for the euro, there are no other fundamental factors for the bulls. Despite the positive end of the year in politics for Britain, the Gilts yield remained close to annual lows at 0.200%, which raises doubts about the continuation of the rally.

• Support levels: 1.3287, 1.3187
• Resistance levels: 1.3657, 1.4386

The main scenario is cautious buying on a decline. Now the technical characteristics of the pair are very strong. If there are hints of an impending correction in the euro, then in this case, there are none at all. The pair is trading above the moving averages. ADX continues high, indicating high bullish pressure. 1.3657 is the nearest all-time high, a breakout of which could send the pair towards 1.43.

Alternative scenario: if the pair consolidates below 1.3541, the northern scenario is likely to cancel and the pair will head towards 1.3428.

The USD/JPY currency pair

• Prev Open: 103.52
• Prev Close: 103.18
• % chg. over the last day: -0.33%

With the breakdown of the main majors of its annual highs, the dollar-yen succumbed to the correlation and returned to the December lows. In this pair, there is no reason for growth at all. The yen does not react to the growth of risky assets, and in the absence of growth in yields on the credit market, everything looks like a stable bearish trend.

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

The main scenario is selling on growth. The closing of trading on Wednesday showed an acceleration in the fall. The MACD is showing divergence, hinting at a possible correction, but the ADX is indicating still strong bearish pressure. 102.89 is the last historical line, a breakout of which can send the instrument to 101.19 – the low of March this year.

An alternative scenario assumes a breakdown of 103.50 from the bottom up. In this case, the pair may reach the area of 103.90 – 104.15.

• – 16:30 (GMT+2) The number of initial claims for unemployment benefits in the United States.

The USD/CAD currency pair

• Prev Open: 1.2814
• Prev Close: 1.2750
• % chg. over the last day: -0.50%

USD/CAD was actually following the general market trend based on the dollar’s decline. Oil quotes are consolidating slightly below their annual highs, but the pair has accelerated its decline. Today the news background is empty and early closing is expected. There will probably not be a significant change in price within the day.

• Support levels: 1.2686
• Resistance levels: 1.2875, 1.2954

The main scenario is selling on growth. MACD is firmly entrenched in the negative area. ADX, despite the steady price movement in the south direction, shows a decrease in the trend potential. This is an indirect sign of a slowdown in the fall and, possibly, a stop. But for now, the bears remain strong. In this regard, the southern scenario remains relevant.

Alternative scenario: if the price manages to return above 1.2811, the pair may resume the upward correction.