The Analytical Overview of the Main Currency Pairs on 2021.12.16

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.1258
  • Prev Close: 1.1294
  • % chg. over the last day: +0.32%

Analysts polling shows Eurozone inflation at 3.5% in Q1 2022, 3.1% in Q2, and 2.4% in Q3 2022. At the same time, inflation in the Eurozone may be higher than expected next year, and long-term forecasts may be revised to increase. Today, the ECB will report on further monetary policy plans. Given that the ECB expects a decline in inflation, the tightening of monetary policy in the region should not be expected.

Trading recommendations
  • Support levels: 1.1265, 1.1230, 1.1168
  • Resistance levels: 1.1323, 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 trading in the corridor, while there is an expansion of borders in the form of false breaks. The MACD indicator has become inactive. Under such market conditions, traders should consider sell positions from the resistance level of 1.1323. Buy trades can be considered from the false breakdown zone, 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.

EUR/USD
News feed for 2021.12.16:
  • – Germany Manufacturing PMI (m/m) at 10:30 (GMT+2);
  • – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+2);
  • – Eurozone Services PMI (m/m) at 11:00 (GMT+2);
  • – Eurozone ECB Interest Rate Decision at 14:45 (GMT+2);
  • – Eurozone ECB Monetary Policy Statement at 14:45 (GMT+2);
  • – Eurozone ECB Press Conference at 15:30 (GMT+2);
  • – US Building Permits (m/m) at 15:30 (GMT+2);
  • – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
  • – US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+2);
  • – US Industrial Production (m/m) at 16:15 (GMT+2);
  • – US Manufacturing PMI (m/m) at 16:45 (GMT+2);
  • – US Services PMI (m/m) at 16:45 (GMT+2).

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.3228
  • Prev Close: 1.3257
  • % chg. over the last day: +0.22%

The UK consumer price level for November was 5.1% in annual terms (4.8% was expected). Analysts believe that the Bank of England should take advantage of the nearest opportunity to tighten the program of quantitative easing and strive to increase interest rates, as the US Fed made. The United Kingdom announces a record number of daily cases of COVID-19. For Wednesday, 78,610 new COVID-19 cases were registered compared with 59,610 during the day earlier.

Trading recommendations
  • Support levels: 1.3188
  • Resistance levels: 1.3252, 1.3321, 1.3434, 1.3507, 1.3575, 1.3685

On the hourly time frame, the trend on GBP/USD is bearish. The price is trading in the corridor, while there is an expansion of borders in the form of false breaks. The MACD indicator has become positive. Under such market conditions, traders should consider sell positions from the resistance levels around the moving average. Buy trades can be considered from the false breakdown zone, but only with additional confirmation.

Alternative scenario: if the price breaks out through the 1.3321 resistance level and consolidates above, the bullish scenario will likely resume.

GBP/USD
News feed for 2021.12.16:
  • – UK Manufacturing PMI (m/m) at 11:30 (GMT+2);
  • – UK Services PMI (m/m) at 11:30 (GMT+2);
  • – UK BoE Interest Rate Decision at 14:00 (GMT+2);
  • – UK BoE Monetary Policy Statement at 14:00 (GMT+2).

The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 113.65
  • Prev Close: 114.05
  • % chg. over the last day: +0.35%

Japan's manufacturing PMI index showed a decline in November (54.2 vs. 54.5 in the previous month). The situation with the Japanese Yen remains the same. Against the background of a large-scale economic stimulation by the central bank of Japan, the fundamental outlook for the yen looks gloomy. Yesterday, the US Federal Reserve announced that it would accelerate the reduction of the QE program, which will result in the dollar index strengthening and the growth of the USD/JPY quotes in the mid-term.

Trading recommendations
  • Support levels: 113.94, 113.30, 112.62, 112.30
  • Resistance levels: 114.17, 115.15, 115.50

The global trend on the USD/JPY currency pair is bearish. However, the pressure of buyers is slowly increasing, and the price is approaching the priority change level. Under such market conditions, traders are better to look for sell positions from the priority change level, but with additional confirmation. Buy positions should be considered from the lower border of the corridor, but with additional confirmation in the form of a buyers' initiative or after the price breakout of the priority change level.

Alternative scenario: if the price rises above 114.17, the uptrend will likely resume.

USD/JPY
News feed for 2021.12.16:
  • – Japan Manufacturing PMI (m/m) at 02:30 (GMT+2).

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2860
  • Prev Close: 1.2831
  • % chg. over the last day: -0.22%

In November, Canada's annual inflation rate was unchanged at 4.7%, remaining at an 18-year high. The key driver of inflation was again gasoline prices, which increased by 43.6% compared to the same month a year earlier. Core inflation (which excludes food and gasoline prices) was 2.7% in annual terms; it’s a 30-year record high. Bank of Canada Governor Tiff Macklem said yesterday that the Bank of Canada might move to a more "patient" state about raising interest rates under certain circumstances. Macklem gave more detail on the new central bank orders, which include some freedom of action, allowing inflation to exceed the target indicator of the Central Bank at 2%.

Trading recommendations
  • Support levels: 1.2828, 1.2776, 1.2721, 1.2677, 1.2638
  • Resistance levels: 1.2891, 1.2951

From a technical point of view, the USD/CAD currency pair trend is bullish. The MACD indicator is positive, but there are signs of divergence. Under such market conditions, it is better to look for buy deals from the support levels near the moving average. It is best to look for sell deals from the false breakout area, but with additional confirmation.

Alternative scenario: if the price breaks down through the 1.2721 support level and fixes below, the downtrend will likely resume.

USD/CAD
There is no news feed for today.

by Justforex, 2021.12.16

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.

Open Account

Get Free Analytics

* required fields
Last Articles
All Articles
How to Interpret Inflation Data?
The Consumer Price Index, better known as CPI, is an important economic indicator regularly published by major economies to provide timely information on current inflation.
Read more
Setting the Clock Right: The Best Time To Trade Forex In India And Other Tips
In the forex market, many components come together for ensuring smooth operations and positive outcomes for a trader. Careful timing of trades is one of such components. In this article, we will explain how market timing is made, what time is best (and relatively worse) for trading, and how to choose the best time for forex trading in India.
Read more
The Matter of Trends: The Most Trending Forex Pairs
The forex market is lucrative for beginners and experienced traders alike because of high liquidity, various trading options, and earning potential that can be successfully realized with a properly chosen forex pair. Then the first question a trader should ask themselves is what pairs to trade and how to predict trends to make a profit off them. In this article, we will explore the trending potential of forex pairs, how to select the best pairs in forex, and uncover short-term and long-term trends.
Read more