The Analytical Overview of the Main Currency Pairs on 2021.12.13

The EUR/USD currency pair

• Prev Open: 1.1288
• Prev Close: 1.1316
• % chg. over the last day: +0.25%

The Euro showed some strength on Friday due to a decline in the dollar index on the US inflation data. Analysts had expected a rise in inflation, so the market reaction was against the dollar index. On the other hand, there is no fundamental reason for the Euro to strengthen right now since the ECB keeps on its soft monetary policy.

• 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. The price is trading in the corridor, and there is a narrowing of liquidity in the form of a pattern “triangle”. The MACD indicator has become inactive. 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.

The GBP/USD currency pair

• Prev Open: 1.3217
• Prev Close: 1.3269
• % chg. over the last day: +0.39%

Friday’s statistics showed a decline in industrial production in Great Britain. GDP figures for the quarter also decreased by 0.1%. The UK is now on lockdown, which will negatively impact the economy in future reports. A lot will depend on the Bank of England meeting this week. If the Bank of England postpones a rate hike until next year, it will negatively impact the national currency.

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

On the hourly time frame, the trend on GBP/USD is bearish. On Friday, the British pound showed some strength amid a decline in the dollar index and broke out the descending channel. The MACD indicator is in the positive zone. Under such market conditions, traders should consider sell positions from the priority change level. Buy trades should be considered from the support levels on lower time frames, 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: 113.42
• Prev Close: 113.37
• % chg. over the last day: -0.04%

The fundamental outlook for the Japanese Yen looks gloomy amid large-scale economic stimulus by the central bank of Japan. Meetings of the central banks of the USA and Japan will take place this week. If the Fed accelerates the reduction of the QE program and the Bank of Japan leaves its monetary policy unchanged, which is highly likely, USD/JPY quotes may return to a bullish trend.

• 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. The price is trading in a wide corridor. The pressure of buyers is increasing and the price is approaching priority change level. Under such market conditions, traders are better to look for sell positions 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 or after the price breakout the priority change level.

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

• – Japan Tankan Manufacturing Index (q/q) at 01:50 (GMT+2);
• – Japan Tankan Non-Manufacturing Index (q/q) at 01:50 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.2705
• Prev Close: 1.2722
• % chg. over the last day: +0.13%

Fundamentally, both the dollar index and oil prices now tend to grow. Considering that the Canadian dollar is a commodity currency, the growth of oil prices will lead to the strengthening of the Canadian dollar, while the growth of the dollar index will lead to the reduction of the Canadian dollar. As a result, in the mid-term, traders should expect a wide flat for USD/CAD, without any single trend. However, analysts think that the Canadian dollar can rise to 1.25 against the US dollar due to the growth in oil prices.

• 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 is bearish. The MACD indicator has become positive, and the price is trading in a narrow corridor. 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 priority change level.

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