The Analytical Overview of the Main Currency Pairs on 2020.12.16

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2144
  • Prev Close: 1.2151
  • % chg. over the last day: +0.06%

EUR/USD continues to trade near the annual maximum and will remain here. Now everything will be decided by the Fed meeting. The market is not expecting changes in interest rates, and additional impetuses in the form of expanding the range of redeemed bonds is probably already expensive. The main driver of the price movement on Wednesday evening may be the statement of the Central Bank about the economic future. If the Fed defines an improvement in the economic climate together with the additional impetuses, the dollar could go up in price in value.

Trading recommendations
  • Support levels: 1.2106, 1.2059
  • Resistance levels: 1.2175, 1.2167

The main scenario for trading EUR/USD is working in a narrow range until Wednesday evening. At the end of the American session,the move to one of the sides is possible. So far, technical indicators are relatively calm, but a slight predominance is on the side of the bulls. The MACD has been fixed in a positive zone. The ADX is rising with the increase of price, which indicates an increase in upward impetus.

Alternative scenario: if the price fixes above the level of 1.2175 after the Fed meeting, the growth is likely to continue. In case of break-through of the level of 1.2106 and consolidation below it, a trend change is most likely.

News feed for 2020.12.16:
  • – German Manufacturing PMI (Dec) at 11:30 (GMT+2);
  • – Retail Sales (m/m) in the USA at 16:30 (GMT+2);
  • – Results of the FRS meeting and the subsequent press conference at 21:00 (GMT+2).

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.3323
  • Prev Close: 1.3459
  • % chg. over the last day: +1.01%

On Tuesday, the sterling demonstrated strong bullish impetus on statements from the key Brexit negotiators. Having received further assurances about the possibility of resolving the deadlock, the pair demonstrates steady growth. Also, market players expect the data to leave from the service sector - the most important for the British market. Preliminary data for December may show positive dynamics. According to economists’ forecast, a December growth will show 50.5, which is considered as a relatively good result.

Trading recommendations
  • Support levels: 1.3279, 1.3225
  • Resistance levels: 1.3477, 1.3539

The main scenario: risk-averse buying on a decline. Precisely because the negotiation process in Brexit is volatile, thus purchases are “risk-averse”. The indicators are still supporting the bullish sentiment. Only the MACD still displays divergence, but if the price fixes above 1.3477, it is likely to disappear.

Alternative scenario: if the price fixes below 1.3331, the bullish impetus will be lost and we can consider selling the currency pair.

News feed for 2020.12.16:
  • – UK Consumer Price Index (YoY) (Nov) at 10:00 (GMT+2);
  • – UK Service Sector PMI at 12:30 (GMT+2).
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The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 104.04
  • Prev Close: 103.67
  • % chg. over the last day: -0.36%

On Tuesday, trading closed in the negative zone, and the dynamics continues to remain bearish, despite the calm in the stock market. This is somewhat confusing. The movement may be quite speculative ahead of the Fed meeting, as it happens. But for now we observe that the price is fixed below the support level, and this is a signal for intraday sales. Everything may change at the end of the American trading session.

Trading recommendations
  • Support levels: 103.20, 103.09
  • Resistance levels: 104.59, 104.74

The main trading scenario for the pair: selling before the American session. If nothing changes at the end of the day, the trend is likely to remain south. Technical indicators are giving a strong bearish signal. The ADX indicates significant selling pressure up to the 103.09 level. The MACD confirms the strength of bears - convergence is observed on the chart.

An alternative scenario assumes a break-through of 104.02 and a return to the previous range between 103.70 and 104.59.

News feed for 2020.12.16:
  • – Retail Sales (m/m) in the USA at 16:30 (GMT+2);
  • – Results of the FRS meeting and the subsequent press conference at 21:00 (GMT+2).

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2761
  • Prev Close: 1.2697
  • % chg. over the last day: -0.50%

The bullish scenario continues on the oil market. The price managed to fix above the last Friday's closing level at $47.50 per barrel, which strengthened the Canadian currency. Today, traders will closely monitor the US oil reserves. This data output can change the direction of the Canadian dollar in the short term.

Trading recommendations
  • Support levels: 1.2688, 1.2528
  • Resistance levels: 1.2792, 1.2835

We are considering selling up to the level of 1.2528. But the movement can be slow. Еру MACD continues to demonstrate divergence, so bears should be careful. The ADX is still on the side of sellers, but the potential is decreasing.

Alternative scenario: if the price manages to return above 1.2792, the southern trend will be broken and a buy signal to the level of 1.2835 will appear.

News feed for 2020.12.16:
  • – Core CPI in Canada (m/m) (Nov) at 16:30 (GMT+2);
  • – US crude oil reserves at 18:30 (GMT+2);
  • – Results of the FRS meeting and the subsequent press conference at 21:00 (GMT+2).

by Justforex, 2020.12.16

We recommend you to get acquainted with the daily overview of the news feed.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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