The Analytical Overview of the Main Currency Pairs on 2020.12.18

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2197
  • Prev Close: 1.2267
  • % chg. over the last day: +0.57%

On Thursday, EUR/USD continued to strengthen on the background of a general dollar decline and also thanks to its drivers from the manufacturing sector. There is a pullback during the Asian session that fits into the framework of one growth wave. The negative news from the UK about the failed negotiations could not significantly affect the price.

Trading recommendations
  • Support levels: 1.2177, 1.2124
  • Resistance levels: 1.2414

The main scenario for trading EUR/USD is to continue buying. There are no signs of a reversal or correction yet. The moving average movement indicates accelerated growth. The trend is strong, and now it will be difficult for the pair to reverse. MACD did not reach the overbought area, and convergence is observed along the tops. ADX is showing strong upside potential.

Alternative scenario: if the price can gain a foothold below 1.2177, it is possible that it will return to the previous range or go for a correction.

Pay attention to the following events of the day:
  • – 12:00 (GMT+2) German IFO Business Climate Index (Dec).

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.3503
  • Prev Close: 1.3577
  • % chg. over the last day: +0.55%

On Thursday, the sterling continued to rise amid positive expectations in the Brexit negotiations. The Bank of England did not surprise, leaving the key interest rate unchanged at 0.10% level and keeping the QE volume at 845 billion pounds. However, during the Asian session, the British currency showed a dropdown. The bulls were disappointed by the announcement that negotiations are again at a standstill. The pound lost about 100 points from yesterday's highs, changing technical indicators.

Trading recommendations
  • Support levels: 1.3449, 1.3287
  • Resistance levels: 1.3623, 1.3657

The main scenario for working with an instrument is selling. The ADX shows an increase in the bearish pressure strength as the curve began to rise on the Asian decline. This is a signal to change the trend. MACD on the hourly timeframe went into the negative area. The price has broken the moving average SMA 50. This is the first sign of a correction. A stronger bearish signal will be received during a breakout of SMA 100 at 1.3459.

Alternative scenario: If the price consolidates below 1.3623, bullish momentum is likely to continue to rise.

News feed for 2020.12.18:
  • – 10:00 (GMT+2) retail sales volume UK (m/m);
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The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 103.44
  • Prev Close: 102.89
  • % chg. over the last day: -0.53%

On Thursday, USD/JPY accelerated its fall and has already entered the area of the 102nd figure. The rise in the dollar index most likely triggers the quick rebound during the Asian session. The Bank of Japan made no changes to the JPY price by statements after the meeting. It is still difficult to talk about the beginning of growth. The stock market is trading in the red; the yields on major bonds are in the red. However, from a technical point of view, bullish signals did appear.

Trading recommendations
  • Support levels: 103.26, 102.89
  • Resistance levels: 103.93, 104.15

The main scenario is cautious buying during a decline. The northern impulse during the Asian session significantly affected the ADX. The chart shows the beginning of a reversal, as the curve indicates strong upside potential. Fixing the price above SMA 50 gives a signal to start a correction. MACD is back in the positive area. Considering the fact that the price for USD/JPY is at annual lows, buying is less of a danger. An alternative scenario assumes a breakdown of 102.89 and the development of a further fall.

An alternative scenario assumes a breakdown of 102.89 and further decline.

There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2737
  • Prev Close: 1.2716
  • % chg. over the last day: -0.17%

The pair is showing consolidation again after a long fall. Oil quotes have stabilized after prolonged growth, but there are no visible signs for a correction. The commodity market is supported by expectations of the US economy bailout package. On the other hand, the dollar received support amid a decrease in demand for risky assets.

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

Most likely, the pair will be traded sideways. But there is little priority in buying. Consolidation is indicated by the frequent breakout of the moving averages in both directions. MACD is demonstrating jumps from negative to positive area and vice versa. But the ADX rolled over for the first time since November 11 and reacted to the upward momentum. It is the only and weak sign of growth in the short term.

Alternative scenario: if the price manages to return above 1.2688, the south trend will continue.

News feed for 2020.12.18:
  • – 12:00 (GMT+2) Baseline Retail Sales (m/m) in Canada.

by Justforex, 2020.12.18

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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