The Analytical Overview of the Main Currency Pairs on 2021.02.18

The EUR/USD currency pair

• Prev Open: 1.2106
• Prev Close: 1.2039
• % chg. over the last day: -0.55%.

In the EUR/USD, there is an acceleration of the decline after positive data on retail sales in the US. The continued growth of the dollar index after the “bullish engulfing” candle, formed on Tuesday, may indicate the beginning of a stable trend. Still, the lack of growth in the yield on 2-year US bonds calls into question such a medium-term scenario.

• Support levels: 1.2011, 1.1952
• Resistance levels: 1.2155, 1.2189

The main scenario for trading the EUR/USD is selling. On the H1 and H4 timeframes, the ADX has shown significant growth, which indicates a high potential for bearish pressure. The pair may hit 1.2011 or below. But on the H1 the oscillators have reached the oversold level, which indicates a high probability of a pullback to the moving average in the 1.2083 area.

Alternative scenario: if the price can gain a foothold above the level of 1.2083, the pair may continue to rise to 1.2155.

• – The Release of the ECB Monetary Policy Account at 14:30 (GMT+2);
• – The United States Initial Jobless Claims at 15:30 (GMT+2);
• – The Philadelphia Fed Manufacturing Index (Feb) at 15:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3899
• Prev Close: 1.3858
• % chg. over the last day: -0.30%

The sterling has shown only a slight decrease in price, and the two-day southern movement is proceeding without acceleration, in contrast to the euro. Nevertheless, while the entire market is subject to correction against the dollar, including precious metals, the GBP/USD may still be under pressure.

• Support levels: 1.3775, 1.3680
• Resistance levels: 1.3950, 1.4000

The main scenario for trading the GBP/USD is cautious selling. On the hourly timeframe, the price consolidated below the SMA 100, which gives more signals to sell. Convergence has been formed on the MACD, confirming the south direction. But the ADX shows minimal reaction when the price goes down, which indicates a slow southern correction.

Alternative scenario: if the pair consolidates above 1.3884, it may return to 1.3950.

The USD/JPY currency pair

• Prev Open: 106.02
• Prev Close: 106.22
• % chg. over the last day: -0.19%

The dollar-yen has surprisingly been showing a strong correlation with the stock market all week, which has not happened for a long time. Despite the rise in the dollar index, the pair fell following the Asian and American risky assets. A long shadow is visible on Wednesday’s daily candlestick, which may signal a stop in northern movement and the beginning of a correction. But there are no other strong selling points yet.

• Support levels: 105.10, 104.40
• Resistance levels: 106.12, 106.55

The main scenario is buying. The bullish direction is still the main one. The price was unable to gain a foothold below the moving averages. The MACD dropped to zero. The ADX showed no reaction to the price pullback. This indicates the absence of bearish pressure. The northern trend is still likely to continue.

An alternative scenario implies the price-fixing below 105.50. In this case, the pair may go for a correction to 105.10.

• – The United States Initial Jobless Claims at 15:30 (GMT+2);
• – The Philadelphia Fed Manufacturing Index (Feb) at 15:30 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.2687
• Prev Close: 1.2698
• % chg. over the last day: +0.09%

The pair was able to only partially react to the movement of the US dollar, showing subtle growth. However, the pressure from the commodity market is becoming noticeable. Oil quotes continued to rise amid the declining US oil inventories and the ongoing emergency in Texas.

• Support levels: 1.2590, 1.2550
• Resistance levels: 1.2745, 1.2763

The main scenario is trading in a sideways range between 1.2682 and 1.2745. The ADX and the MACD have dropped to their minimum values, which indicates the absence of price direction. The pair is above the moving averages, and it gives little priority to buying. At the same time, a high shadow at the top casts doubt on the upward movement.

Alternative scenario: if the price consolidates below 1.2682, the pair may resume its decline to the level of 1.2590. A rise above 1.2745 will indicate a continuation of the northern correction.

• – The United States Initial Jobless Claims at 15:30 (GMT+2);
• – The Philadelphia Fed Manufacturing Index (Feb) at 15:30 (GMT+2);
• – The US crude oil reserves at 18:00 (GMT+2).