The Analytical Overview of the Main Currency Pairs on 2021.01.06

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2247
  • Prev Close: 1.2297
  • % chg. over the last day: +0.41%

EUR/USD continued to rise on Tuesday and managed to renew the highs of December 30. At the same time, the growth dynamics of European bond yields is much weaker than the American ones. The German employment index supports bulls in euros. The labor market is gradually recovering. In December, the number of unemployed fell by 37,000, after falling by 40,000 in November.

Trading recommendations
  • Support levels: 1.2241, 1.2216
  • Resistance levels: 1.2353, 1.2414

The main scenario for trading EUR/USD is risk-averse buying on a decline. The market is now ignoring all positive data from the US. This can be seen in the gold quotes. Yet you should be vigilant when building up long positions. The technical characteristics of the pair are among the strongest ones. The ADX shows the growth of bullish pressure, the MACD is steadily going up.

Alternative scenario: if the price manages to fix below the level of 1.2241, it is possible that there will be a reformation to a reversal in the south direction.

News feed for 2021.01.06:
  • – US ADP Nonfarm Employment Change at 16:15 (GMT+2);
  • – Minutes of the FRS meeting at 22:00 (GMT+2).

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.3568
  • Prev Close: 1.3623
  • % chg. over the last day: +0.40%

The sterling price against the dollar recovered almost to its maximum values on January 4. GBP/USD follows the general market trend but is the weakest currency pair among the majors. The dynamics of growth in profitability of Gilts was the lowest amid new restrictions in the UK. Today, traders will receive data from the services sector, which may cause an increase in volatility in the currency pair.

Trading recommendations
  • Support levels: 1.3541, 1.3428
  • Resistance levels: 1.3702, 1.4386

The main scenario is trading in a sideways range. The slow growth of the pair didn’t affect the ADX indicators. The growth potential is very weak. The MACD has moved into the positive zone but is near the zero mark. The currency pair broke through the moving averages several times during Tuesday, which is more indicative of trading in a narrow range.

Alternative scenario: if the pair fixes above 1.3702, the growth is likely to resume. A break-through of 1.3541 will bring the pair back to the decline.

News feed for 2021.01.06:
  • – UK Services PMI at 12:30 (Dec.) (GMT+2).
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The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 103.11
  • Prev Close: 102.69
  • % chg. over the last day: -0.41%

USD/JPY continues to show a correlation with the dollar index, completely ignoring the situation in the credit and stock markets. Yesterday, Treasury yields exceeded 1% for the first time since March last year, which allowed the stock market to jump sharply to growth. But the instrument has updated the lows yet again. Bears remain dominant.

Trading recommendations
  • Support levels: 102.59, 102.03
  • Resistance levels: 103.33, 103.90

The main scenario is selling on growth. All indicators point to strong bearish pressure. The ADX soared to almost maximum values on the last wave of decline. At the same time, the MACD shows convergence when new lows are updated. This is a serious claim for the continuation of the downtrend.

An alternative scenario assumes a break-through of 103.04 from the bottom up. In this case, the pair may reach 103.33 and stop the southern scenario.

News feed for 2021.01.06:
  • – US ADP Nonfarm Employment Change at 16:15 (GMT+2);
  • – Minutes of the FRS meeting at 22:00 (GMT+2).

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2772
  • Prev Close: 1.2665
  • % chg. over the last day: -0.84%

Bears in USD/CAD received a new portion of drivers to continue the pair's decline. An unexpected proposal to cut oil production in Saudi Arabia sent oil quotes to new highs. Against this background, the Canadian currency rose sharply against the dollar, showing identical dynamics with the commodity market.

Trading recommendations
  • Support levels: 1.2523
  • Resistance levels: 1.2797, 1.2875

The main scenario is selling on growth. The ADX shows a moderate downside potential, which indicates a slow downward movement of quotes. The MACD has shown convergence at updating the lows – this gives confidence to the bears.

Alternative scenario: if the price can fix above 1.2737, the pair may return to 1.2797 and reverse the south trend.

News feed for 2021.01.06:
  • – US crude oil stocks at 18:30 (GMT+2).

by Justforex, 2021.01.06

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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