The Analytical Overview of the Main Currency Pairs on 2021.12.29

The EUR/USD currency pair

• Prev Open: 1.1326
• Prev Close: 1.1308
• % chg. over the last day: -0.16%

The ECB reduced the pace of its asset purchases. This is a positive factor for the strengthening of the Euro. However, it should be noted that the FED is also cutting the QE program. Therefore, EUR/USD quotes are not likely to grow significantly, but in the short term, the Euro will be stable.

• Support levels: 1.1293, 1.1230, 1.1168
• Resistance levels: 1.1342, 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 traded in a corridor. The MACD indicator has become inactive; the volatility is below average due to the holidays. It is better to consider sell deals after a false breakout of the 1.1342 resistance level. Buy trades can be considered on the lower time frames from the support level of 1.1293, but only with additional confirmation.

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

• – US Pending Home Sales (m/m) at 17:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3437
• Prev Close: 1.3428
• % chg. over the last day: -0.07%

The British government has no plans to impose a nationwide lockdown despite the high sickness rate as the number of hospitalizations is 50% lower than under the Delta strain. Growth in “Brent” oil prices provides additional support to the British currency.

• Support levels: 1.3362, 1.3301, 1.3277, 1.3220
• Resistance levels: 1.3443, 1.3507, 1.3575, 1.3685

On the hourly time frame, the trend on GBP/USD is still bullish. But the MACD indicator is showing a divergence. Under such market conditions, traders should consider buy positions from the 1.3362 support level but only with additional confirmation in the form of a buyers’ initiative. Sell trades can be considered from the resistance level of 1.3443, where there was a false breakout.

Alternative scenario: if the price breaks down through the 1.3301 support level and consolidates below, the bearish scenario will likely resume.

The USD/JPY currency pair

• Prev Open: 114.83
• Prev Close: 114.81
• % chg. over the last day: -0.02%

In terms of monetary policy analysis, Japan’s central bank is now actively stimulating the economy, while the US Federal Reserve is reducing its stimulus program. This means that in the mid-term the dollar index will go up in value, while the Japanese yen will go down. As a result, the USD/JPY currency pair will continue its uptrend.

• Support levels: 114.50, 114.16, 113.76, 113.32, 112.62, 112.30
• Resistance levels: 115.15, 115.50

The global trend on the USD/JPY currency pair is bullish. The MACD indicator is signaling a divergence at several timeframes, which means that a slight correction should be expected. Buy positions should be considered from the 114.50 support level, but with additional confirmation in the form of a buyers’ initiative. There is no optimal entry point for sell positions now.

Alternative scenario: if the price fixes below 114.16, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2784
• Prev Close: 1.2817
• % chg. over the last day: +0.25%

The Canadian dollar is a commodity currency, so it correlates strongly with oil prices and the dollar index. Yesterday, oil prices increased while the dollar index was stable. As a result, the USD/CAD currency pair has grown slightly.

• Support levels: 1.2783, 1.2721, 1.2677, 1.2638
• Resistance levels: 1.2903, 1.2951

From a technical point of view, the USD/CAD currency pair trend is bullish. Buyers were able to defend the priority change level, the price rebounded, and broke out the local descending trendline. The MACD indicator has become positive. Under such market conditions, it is better to look for buy deals on the lower time frames with the target of 1.2903. Sell deals should be considered from the resistance level of 1.2903 or after breakdown and fixation below the priority change level.

Alternative scenario: if the price breaks down through the 1.2783 support level and fixes below, the downtrend will likely resume.

• – US Crude Oil Inventories (w/w) at 17:30 (GMT+2).