The Analytical Overview of the Main Currency Pairs on 2021.01.18

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2152
  • Prev Close: 1.2077
  • % chg. over the last day: -0.62%

On Friday, EUR/USD accelerated its southern corrective movement, closing below an important support level. Despite the negative data on retail sales in the US, the difference in 10-year Treasury yield remained unchanged. As a result, the European currency continued to yield to the dollar, showing a tendency towards the beginning of a deep correction.

Trading recommendations
  • Support levels: 1.2059, 1.1799
  • Resistance levels: 1.2130, 1.2222

The main scenario for trading EUR/USD is selling. The break-through of the 1.2130 level indicated the development of a correction, and the mark became a resistance level. All technical indicators, including those on older time frames, have rebuilt and are providing southern signals. The ADX showed high bearish pressure on H1, while convergence appeared on the MACD. The potential for further declines is high.

Alternative scenario: if the price manages to fix above the level of 1.2130, the pair may return to the range with the upper border of 1.2222.

There is no news feed for today.

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.3683
  • Prev Close: 1.3586
  • % chg. over the last day: -0.71%

The sterling failed to rise above an important resistance level by the end of Friday and showed a significant intraday decline. Traders received reports on economic growth, and they’re not the positive ones. Despite better-than-expected numbers, the year's results and its start are disappointing. Gilts yields against the US Treasuries continue to fall, putting pressure upon the British currency.

Trading recommendations
  • Support levels: 1.3532, 1.3428
  • Resistance levels: 1.3702, 1.4386

The main scenario in GBP/USD is selling. A downward move after the second touch of 1.3702 on the chart shows a "double top" pattern – a strong sell signal. The sharp fall and fixation of the price below the moving averages caused a strong reaction from the ADX. The potential for the trend has exceeded the indicators in the upward movement of the previous week, indicating a rapid increase of bearish strength.

Alternative scenario: if the pair fixes above 1.3633, the pair is likely to return to growth to 1.3702.

There is no news feed for today.
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The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 103.79
  • Prev Close: 103.86
  • % chg. over the last day: +0.06%

On Friday, USD/JPY was weakly correlated with the dollar index. The bulls were hampered by the movement on the stock markets, where the development of the correction was observed. The data on retail sales in the US came out with no success, which caused a wave of reduction of long positions in risky assets. As a result, the pair failed to show significant growth following the dollar index.

Trading recommendations
  • Support levels: 103.53, 103.18
  • Resistance levels: 104.40, 104.76

The main scenario is trading in a sideways range. The ADX indicates a very weak reaction to movements, but more inclination is still observed when the price rises. However, other indicators contradict the northern disposition so far. The price is fixed below the moving averages, and the MACD is near zero. On the background of mixed indicators, the sideways range is most likely.

An alternative scenario assumes the price fixing above 104.40. In this case, the pair may return to growth up to 104.76 – 105.68. A break-through of 103.53 will indicate renewed bearish sentiment.

There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2635
  • Prev Close: 1.2729
  • % chg. over the last day: +0.74%

On Friday, the pair managed to get away from the decline, and there were signs of a correction development. Oil prices on the last day of last week trading showed the largest decline since December last year. This factor put pressure on the Canadian currency. At the same time, the rise in the dollar across the entire spectrum of the market helped the bulls in the pair climb almost to the January highs.

Trading recommendations
  • Support levels: 1.2630, 1.2523
  • Resistance levels: 1.2797, 1.2834, 1.2875

The main scenario is buying on a decline. The ADX demonstrated the strongest dynamics among all majors in the foreign exchange market. This indicates the significant strength of the bulls in the pair. However, the oscillator is in the area of short-term overvaluation, which indicates the need for a rollback. The MACD and the moving averages reversed completely.

Alternative scenario: if the price is able to fix below 1.2698, the pair may return to 1.2630.

There is no news feed for today.

by Justforex, 2021.01.18

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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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