The Analytical Overview of the Main Currency Pairs on 2021.12.14

The EUR/USD currency pair

• Prev Open: 1.1308
• Prev Close: 1.1285
• % chg. over the last day: -0.20%

The energy crisis is getting worse in Europe. Since early October, European natural gas futures increased to their highest level amid growing concern that Russia’s Nord Stream 2 pipeline will not work this winter. Analysts believe that amid rising inflation expectations, the ECB needs to tighten monetary policy as soon as possible, or consumer prices will be even higher.

• 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 or if the price shows a true breakdown of the triangle pattern. Buy trades can be considered if the price shows a true breakout of the triangle pattern.

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

• – Eurozone Industrial Production (m/m) at 12:00 (GMT+2);
• – US Producer Price Index (m/m) at 15:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3256
• Prev Close: 1.3211
• % chg. over the last day: -0.34%

British Prime Minister Boris Johnson announced Monday that at least one person has died in the United Kingdom after contracting a variant of the Omicron coronavirus. Last week, Johnson asked the public to work from home and wear masks on public transport if possible. On Sunday, he urged the country to make booster vaccinations to prevent overburdening health services, warning that a new wave of cases was approaching. The UK will report today on the state of the labor market.

• Support levels: 1.3188
• Resistance levels: 1.3252, 1.3321, 1.3434, 1.3507, 1.3575, 1.3685

On the hourly time frame, the trend on GBP/USD is bearish. The MACD indicator is negative again. Under such market conditions, traders should consider sell positions from the resistance levels around the moving average. 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 1.3321 resistance level and consolidates above, the bullish scenario will likely resume.

• – UK Average Earnings Index (m/m) at 09:00 (GMT+2);
• – UK Average Earnings Index (m/m) at 09:00 (GMT+2);
• – UK Unemployment Rate (m/m) at 09:00 (GMT+2).

The USD/JPY currency pair

• Prev Open: 113.27
• Prev Close: 113.57
• % chg. over the last day: +0.26%

The situation with the Japanese Yen remains the same. Against the background of a large-scale economic stimulation by the central bank of Japan, the fundamental outlook for the yen looks gloomy. 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: 113.30, 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 the priority change level. Under such market conditions, traders can 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 of the priority change level.

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

• – Japan Industrial Production (m/m) at 06:30 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.2724
• Prev Close: 1.2808
• % chg. over the last day: +0.66%

Crude oil prices fell on news of the first death in the UK from the Omicron strain and WHO warnings that Omicron poses a “very high” global risk because it is not vaccine-proof. The Canadian dollar is a commodity currency, so amid a decline in oil prices and a rise in the dollar index, USD/CAD quotes increased.

• Support levels: 1.2776, 1.2721, 1.2677, 1.2638
• Resistance levels: 1.2828

From a technical point of view, the trend of the USD/CAD currency pair has changed to bullish. Yesterday, the price broke through and consolidated above the priority change level. The MACD indicator became positive, and there are no signs of a reversal. Under such market conditions, it is better to look for buy deals from the support levels near the moving average. It is best to look for sell deals from the resistance levels of higher time frames.

Alternative scenario: if the price breaks down through the 1.2677 support level and fixes below, the downtrend will likely resume.