by JustForex
The EUR/USD currency pair
- Prev Open: 1.2324
- Prev Close: 1.2271
- % chg. over the last day: -0.43%
EUR/USD is gradually slowing down the northern movement. It wasn’t possible to renew the highs on January 6, but the pair still remains above the first support levels. After negative statistics from the service sector, the 10-year bonds yield spread fell sharply. German Bonds lost about 50 basis points against American Treasuries in 24 hours, which is a strong change in the difference.
- Support levels: 1.2241, 1.2216
- Resistance levels: 1.2349, 1.2414
The main scenario for trading EUR/USD is selling. Euro failed to overcome the resistance level, bouncing back to the support level, and breaking it through. The price has consolidated below the moving averages, which indicates the dominance of bears. The rest of the indicators also changed to the south. The MACD has fixed below zero and indicates convergence at the minimum values. The ADX reacted to the decline, but not significantly, which indicates low downward movement potential. Fixing the price below 1.2241 will strengthen the southern signal.
Alternative scenario: if the price can fix above the level of 1.2294, the pair may return to the highs of 1.2349.
- – Nonfarm Payrolls Сhange (Dec) at 16:30 (GMT+2);
- – Average Hourly Earnings (m/m) (Dec) at 16:30 (GMT+2);
- – Unemployment rate (Dec) at 16:30 (GMT+2).
The GBP/USD currency pair
- Prev Open: 1.3603
- Prev Close: 1.3560
- % chg. over the last day: -0.32%
Bullish sentiments are gradually falling in sterling. The continuing decline in business activity in the services sector indicates a negative end to the year. GDP estimates for Q4 2020 may be lower than expected. Factors indicating that sterling is overvalued are gradually emerging. Dollar bulls play into the hands of bears in sterling. After positive data from the manufacturing sector and services, the dollar index is showing an uptrend.
- Support levels: 1.3541, 1.3428
- Resistance levels: 1.3670, 1.3702
The main scenario in GBP/USD is range trading. This week the pair didn’t go beyond the significant resistance level. However, the pound is also bouncing off the support. The formed local “double bottom” gives a technically significant level. A break-through at the level of 1.3541 will be a strong sell signal. In the meantime, all indicators are in a calm state. The ADX and MACD indicate flat. The moving averages give only a small bearish signal.
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Alternative scenario: if the pair fixes above 1.3702, the growth is likely to resume. A break-through at 1.3541 could turn the pair completely south.
- – Nonfarm Payrolls Сhange (Dec) at 16:30 (GMT+2);
- – Average Hourly Earnings (m/m) (Dec) at 16:30 (GMT+2);
- – Unemployment rate (Dec) at 16:30 (GMT+2).
The USD/JPY currency pair
- Prev Open: 103.03
- Prev Close: 103.80
- % chg. over the last day: +0.74%
On Wednesday and Thursday, the currency pair surprised with rapid movements. The lack of reaction to any events was suddenly replaced by a fast northern movement following the stock market, which was able to renew highs. The service sector data in the US cheered the bulls. However, the important resistance hasn’t yet been overcome.
- Support levels: 102.89, 102.59
- Resistance levels: 103.90, 104.76
The main scenario is risk-averse purchases. The bearish scenario was temporarily canceled by the break-through of the first resistance level. At the second important level, there was only a puncture. It’s too early to talk about a U-turn. It’s necessary to monitor whether the price will fix above the level of 103.90. Today’s NFP data may decide the way forward. The ADX showed high potential for the northern movement, while the MACD demonstrated convergence on growth.
An alternative scenario assumes the price-fixing below 103.42. In this case, the pair may fall to 102.89.
- – Nonfarm Payrolls Сhange (Dec) at 16:30 (GMT+2);
- – Average Hourly Earnings (m/m) (Dec) at 16:30 (GMT+2);
- – Unemployment rate (Dec) at 16:30 (GMT+2).
The USD/CAD currency pair
- Prev Open: 1.2673
- Prev Close: 1.2685
- % chg. over the last day: +0.09%
As a result of the past two days, mixed signals were received. The rise in oil prices puts upward pressure on the Canadian currency. At the same time, the growth of the US dollar is trying to pull the pair up. As a result, the pair shows only a slight increase in price, updating the highs of the previous day. But daily candles leave long shadows at the top.
- Support levels: 1.2630, 1.2523
- Resistance levels: 1.2797, 1.2875
The main scenario is trading in a sideways range. A quick bounce of quotations to the north led to nothing. The moving averages were broken, but no consolidation took place. The MACD is near zero. The ADX isn’t much reacting to the movements in both directions. The pair is likely to get stuck near the current price and start consolidating.
Alternative scenario: if the price can fix above 1.2737, the pair may return to 1.2797 and reverse the south trend. A break-through of 1.2630 will indicate a continuation of the southern trend.
- – Nonfarm Payrolls Сhange (Dec) at 16:30 (GMT+2);
- – Average Hourly Earnings (m/m) (Dec) at 16:30 (GMT+2);
- – Unemployment rate (Dec) at 16:30 (GMT+2).
by JustForex
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
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