The Analytical Overview of the Main Currency Pairs on 2021.01.27

The EUR/USD currency pair

• Prev Open: 1.2138
• Prev Close: 1.2158
• % chg. over the last day: +0.16%.

EUR/USD has developed a narrow short-term range. Traders are expecting new drivers for moving in one direction or another. Despite the apparent weakness of the euro against other currencies, it is unlikely to decline against the dollar. Huge amounts of money are pouring into the American economy, as the LIBOR rates show us. In light of all the negative fundamental data, the euro can’t overcome the support level.

• Support levels: 1.2107, 1.2077, 1.2059
• Resistance levels: 1.2189, 1.2222, 1.2283

The main scenario for trading EUR/USD is trading sideways between 1.2189 and 1.2107. All specifications are neutral. The moving averages show horizontal position, the ADX is near zero. The MACD is slightly positive, which gives expectations for a northward move. Though, it is difficult to expect the movement beyond the designated range before the FED press conference.

Alternative scenario: if the price can gain a foothold above the level of 1.2189, the pair may grow to 1.2222. A break-through of 1.2107 downwards could bring the pair to 1.2077 – 1.2059 level.

• Durable Goods Orders in the United States (m/m) (Dec) at 15:30 (GMT+2);
• FED Interest Rate Decision at 21:00 (GMT+2);
• Fed press-conference at 21:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3672
• Prev Close: 1.3731
• % chg. over the last day: +0,43%

The British pound is retaining its leading position versus the dollar among the G10 currencies. Its price has returned to the annual highs, although the market did not receive additional drivers for growth. Gilts profitability remains below the range of the previous two weeks, which casts doubt on further advance north.

• Support levels: 1.3622, 1.3517
• Resistance levels: 1.3744, 1.4386

The main scenario for GBP/USD is cautious buying. Tuesday’s daily candlestick showed a “bullish engulfing” pattern, which indicates strong upward momentum. The ADX indicates high growth potential. As a result, all technical indicators speak in favor of a bullish movement, except for one – another stop near the resistance at 1.3744. If the price fails to overcome and fix above this level, the price may move to a decline again.

Alternative scenario: if the pair consolidates below 1.3695, it is likely to return to 1.3622.

The USD/JPY currency pair

• Prev Open: 103.73
• Prev Close: 103.60
• % chg. over the last day: -0,12%

The pair’s volatility continues to decline. Treasury yields are slightly lower than last week, and the stock market is showing minor fluctuations around the established highs. As a result, the amplitude of fluctuations in the dollar-yen has decreased, and the increase in volatility is not expected without significant drivers.

• Support levels: 103.32, 102.89
• Resistance levels: 103.94, 104.09, 104.40

The main scenario is trading within the range of 103.94 and 103.32. Specifications are completely neutral. Even the minimum priority of the direction is lost. Before the Fed press conference, the pair may continue to move in a very narrow range.

An alternative scenario involves price fixing above 103.94. In this case, the pair may be able to return to 104.40 or higher. A break-through of 103.32 will indicate a continued decline.

• – Durable Goods Orders in the United States (m/m) (Dec) at 15:30 (GMT+2);
• – FED Interest Rate Decision at 21:00 (GMT+2);
• – Fed press-conference at 21:30 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.2734
• Prev Close: 1.2691
• % chg. over the last day: -0.34%

On Tuesday, the Canadian dollar showed strong movement, forming a bearish engulfing on the daily chart. But it is too early to talk about the development of the bearish trend. The pair is trading in its consolidation area and may stay there for a while. Oil prices remain in the same range, which fully satisfies the current price position of USD/CAD.

• Support levels: 1.2686, 1.2624
• Resistance levels: 1.2797, 1.2834, 1.2875

The main scenario is trading sideways between 1.2797 and 1.2686. The ADX showed an increase in potential while declining on Tuesday, but it is lower than during the previous growth. Thus, the further downward direction remains in question. Price is stuck between moving averages, which is a sign of a short-term stop.

The alternative scenario: if the price can fix below 1.2686, the pair may resume southward direction. A break-through of 1.2797 upwards will open the way to 1.2834 or even higher.

• – Durable Goods Orders in the United States (m/m) (Dec) at 15:30 (GMT+2);
• – US crude oil reserves at 17:30 (GMT+2);
• – Fed Interest Rate Decision at 21:00 (GMT+2);
• – Fed press-conference at 21:30 (GMT+2).