The Analytical Overview of the Main Currency Pairs on 2021.12.09

The EUR/USD currency pair

• Prev Open: 1.1266
• Prev Close: 1.1340
• % chg. over the last day: +0.65%

Yesterday, the European currency strengthened on the back of the dollar index decline, but the situation in the Eurozone remains tense. First, analysts predict a rise in inflation in the region next year as well. Secondly, the energy crisis leads to the bankruptcy of businesses and raises the prices of electricity and natural gas to new highs. Third, supply problems haven’t gone anywhere. Fourth, the ECB has no plans to cut the PEPP program until March 2022. All this suggests that there are no reasons for the Euro strengthening now from a fundamental point of view.

• Support levels: 1.1265, 1.1230, 1.1168
• Resistance levels: 1.1360, 1.1436, 1.1535, 1.1613, 1.1667, 1.1717

From a technical point of view, the EUR/USD on the hour time frame is still bearish, but the price is approaching the priority change level. Buyers continue to show initiative. At the moment, the price has already been trading above the moving average. The MACD indicator is in the positive zone, with no signs of reversal. Under such market conditions, traders should consider sell positions from the priority change level of 1.1360. Buy trades can be considered on lower time frames, but only with short targets.

Alternative scenario: if the price breaks out through the 1.1360 resistance level and fixes above, the mid-term uptrend will likely resume.

• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3231
• Prev Close: 1.3203
• % chg. over the last day: -0.21%

The British pound fell to a one-year low Wednesday after British Prime Minister Boris Johnson imposed tighter restrictions in England to counter the spread of the Omicron variant. Now people need to work from home, wear masks in public places, and use vaccination passes.

• Support levels: 1.3188
• Resistance levels: 1.3232, 1.3289, 1.3326, 1.3434, 1.3507, 1.3575, 1.3685

On the hourly time frame, the trend on GBP/USD is bearish. The British pound is under sellers’ pressure. The MACD indicator is in the negative zone, but there are signs of divergence on several time frames, which means that a technical rebound should be expected. Under such market conditions, traders should consider sell positions from the resistance levels around the moving average or from the upper border of the descending channel. Buy trades should be considered from the support level of the higher time frame, but only with additional confirmation.

Alternative scenario: if the price breaks out through the 1.3326 resistance level and consolidates above, the bullish scenario will likely resume.

The USD/JPY currency pair

• Prev Open: 113.55
• Prev Close: 113.68
• % chg. over the last day: +0.11%

From a fundamental point of view, there is no reason for the JPY to strengthen right now. Firstly, Japan has downgraded GDP in Q3 due to a bigger drop in consumer spending. Second, the risks associated with the Omicron option are decreasing, causing investors to shift assets from the safe haven currency to other riskier and more profitable assets. Third, Japan’s central bank introduced a record $490 billion stimulus package to support the economy.

• Support levels: 112.62, 112.30
• Resistance levels: 113.94, 114.17, 115.15, 115.50

The global trend on the USD/JPY currency pair is bearish. But the pressure of buyers is increasing, and the price is approaching the priority change level. Under such market conditions, traders can look for sales from the priority change level but with additional confirmation. Buy positions should be considered from the lower border of the corridor, but with additional confirmation in the form of a buyers’ initiative.

Alternative scenario: if the price rises above 114.17, the uptrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2636
• Prev Close: 1.2650
• % chg. over the last day: +0.11%

Canada’s central bank left its key interest rate unchanged as expected. The statement also said the bank does not plan to raise its key rate until April-September of next year. But the Bank of Canada is keeping a close eye on inflation expectations and labor costs in order to control the growth.

• Support levels: 1.2638, 1.2597, 1.2502, 1.2416
• Resistance levels: 1.2726, 1.2776, 1.2828

From a technical point of view, the USD/CAD currency trend has changed to bearish. The MACD indicator has become inactive. Under such market conditions, it is better to look for buy trades from the 1.2638 support level, but only after additional confirmation in the form of a buyers’ initiative. It is better to consider sell deals from the resistance levels near the moving average.

Alternative scenario: if the price breaks out through the 1.2776 resistance level and fixes above, the downtrend will likely be broken.