The Analytical Overview of the Main Currency Pairs on 2021.01.14

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2205
• Prev. Close: 1.2156
• % chg. over the last day: -0.40%

EUR/USD on Wednesday returned to its Monday lows amid rising US Treasuries. Richard Clarid’s comments brought new excitement to the market as to how long the soft policy could last. The likelihood of a more rapid departure from the easing policy supported the dollar.

Trading recommendations

• Support levels: 1.2222,1.2283
• Resistance levels: 1.2130,1.2059

The main scenario for trading EUR/USD is range trading. Level 1.2130 has become a key support, a breakout of which will indicate bearish direction and deep correction. Without this signal, the sideways range scenario will be valid. ADX did not react to the pair’s decline, which indicates the weakness of the bears. However, as long as the price is below the moving averages, the probability of a breakout remains high.

Alternative scenario:

if the price can consolidate below the level of 1.2130, the pair may continue to move towards 1.2059. A breakout of 1.2222 will bring the pair back to 1.2283 or higher.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3660
• Prev. Close: 1.3634
• % chg. over the last day: -0.19%

Sterling turned out to be a stronger currency against the dollar on Wednesday. Unlike the European currency, the rise in the dollar had almost no pressure on the pair. Quotes remained close to the January highs, which suggests growth in the medium term.

Trading recommendations

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

The main scenario in GBP/USD is cautious buying on the decline. While the dollar is showing an upward trend, the pair is only showing a pullback. Technical characteristics show a decrease in bullish pressure. MACD was near zero. ADX does not react to movements. These are signs of sideways movement, but as long as the pair is above the moving averages, the probability of a breakdown of the key resistance remains.

Alternative scenario:

if the pair consolidates below the moving averages around 1.3590, growth is likely to stop and the pair will return to 1.3532 or below.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 103.74
• Prev. Close: 103.86
• % chg. over the last day: -0.50%

On Wednesday, the dollar-yen followed the dollar index and the credit market. The rise in Treasury yields and comments from a Fed member stopped the fall, and the pair almost reached January highs in the Asian session. In the medium term, growth has been outlined in terms of fundamental indicators.

Trading recommendations

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

The main scenario is trading in a sideways range. ADX did not react to the last wave of growth, which indicates the weakness of the bulls. MACD starts signaling about the decay of fluctuations. The price has consolidated slightly above the moving averages, but so far this is a weak bullish signal. The pair may be stuck for a while between 104.40 and 103.53.

Alternative scenario:

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. Breakdown of 103.53 will indicate renewed bearish sentiment.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2708
• Prev. Close: 1.2692
• % chg. over the last day: -0.13%

On Wednesday, the Canadian dollar was the strongest against the US dollar. The daily price closed with a negative value against the background of continued growth in oil prices. As long as the trend in the commodity market remains upward, USD/CAD risks continuing to lose ground.

Trading recommendations

• Support levels: 1.2630,1.2523
• Resistance levels: 1.2797,1.2875

The main scenario is cautious selling. Technical indicators, despite the continuation of the southern movement, signal an impending slowdown in the rate of decline. MACD is close to showing divergence. ADX is near zero. As long as the pair is fixed below the moving averages, there is a possibility of reaching the level of 1.2630, which may limit the fall.

Alternative scenario:

if the price can consolidate above 1.2729, the pair may return to 1.2797.