The Analytical Overview of the Main Currency Pairs on 2021.01.04

The EUR/USD currency pair

• Prev Open: 1.2297
• Prev Close: 1.2216
• % chg. over the last day: -0.66%

EUR/USD is recovering from Thursday’s fall. There were no particular reasons for the sharp decline. The credit market didn’t show any significant change in trading. The dollar index continues to remain close to the minimum values, continuing to decline in the Asian session. The pair remained in an ascending channel, bouncing off the nearest support.

• Support levels: 1.2216, 1.2151
• Resistance levels: 1.2309, 1.2353

The main trading scenario for EUR/USD is trading in a sideways range. Technically, the pair indicated the first sign of correction, breaking through the lower border of the channel. But considering the time when it happened, the break-through may turn out to be false. Now the euro is in an ascending channel again. The ADX almost didn’t react to the fall. The price is stuck between two moving averages. Given the mixed signals and the first day of trading, low volatility can be expected.

Alternative scenario: if the price can fix below the level of 1.2216, it is possible that the price will go lower to 1.2151 – 1.2130. A break-through of 1.2309 will resume the uptrend.

• – German Manufacturing PMI (Dec.) at 11:55 (GMT+2);
• – Eurozone Manufacturing PMI (Dec.) at 12:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3620
• Prev Close: 1.3658
• % chg. over the last day: +0.28%

The pound is gradually continuing to renew its highs, showing no signs of a correction. The pair is the strongest among all the majors. However, we can’t say the same about British securities. Gilts profitability continues to fall, throwing into question the further long-term growth of the sterling. But technically, the trend continues and the nearest resistance is far away.

• Support levels: 1.3627, 1.3428
• Resistance levels: 1.4386

The main scenario is risk-averse buying on a decline. The pair’s technical characteristics remain strong. The price is above the moving averages. But on the hourly timeframe, the ADX showed a decrease in the trend potential after moving into the overvalued area. On H4, the oscillator just hit this area. With that in mind, you should be vigilant when building up long positions.

Alternative scenario: if the pair fixes below 1.3627, the northern scenario is likely to reverse and the pair will head towards 1.3428.

• – UK Manufacturing PMI (Dec.) at 12:30 (GMT+2).

The USD/JPY currency pair

• Prev Open: 103.17
• Prev Close: 103.26
• % chg. over the last day: +0.08%

USD/JPY continues to be dominated by bears. With the opening of trading in Europe, the main support level was broken. Apparently, the move is based solely on the decline of the dollar index, as the stock market continues to rise. The 102.03 mark becomes the closest support in case the price fails to return above 102.89 during the day.

• Support levels: 102.03, 101.20
• Resistance levels: 103.33, 103.90

The main scenario – selling on growth. For the fourth trading day, the pair is confidently remaining below the moving averages. The MACD is below zero, while the ADX continues to react only to a decline. Now the potential for the trend has decreased, which may indicate a slowdown in the rate of decline. But there are no signs of correction yet.

An alternative scenario assumes a break-though of 103.33 from the bottom up. In this case, the pair may reach 103.90.

The USD/CAD currency pair

• Prev Open: 1.2751
• Prev Close: 1.2757
• % chg. over the last day: +0.05%

There was a large portion of bearish pressure with the opening of trades. A decline in the dollar and an increase in oil prices brought the pair back to the December lows. The market is awaiting a decision of OPEC+ concerning the extension of the production cut program. Against this background, serious changes can occur during the day.

• Support levels: 1.2686, 1.2523
• Resistance levels: 1.2875, 1.2954

The main scenario – risk-averse selling during growth. The MACD shows convergence, which gives confidence to the bears. But ADX didn’t show a significant reaction with a significant withdrawal of the price from the moving averages. At the same time, the price bounced off its strong support level, indicating a stop near current levels. Based on this, we can wait for the price to return to the SMA 50 at 1.2750 and try to build up sales in case of a rebound from the line.

Alternative scenario: if the price manages to return above 1.2750 – 1.2787, the pair may resume the upward correction.