The Analytical Overview of the Main Currency Pairs on 2021.12.10

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1341
• Prev. Close: 1.1292
• % chg. over the last day: -0.44%

The euro may fall sharply today on inflation data in Germany and the United States. Analysts expect a -0.2% decline in German inflation, while the US is expected to see a 0.7-0.9% increase in consumer prices. A rise in inflation usually leads to an increase in the national currency, expecting that the central bank will tighten its monetary policy.

Trading recommendations

• Support levels: 1.1265,1.1230,1.1168
• Resistance levels: 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. Sellers’ initiatives replaced buyers’ initiatives. The MACD indicator has become inactive. Under such market conditions, traders should consider sell positions from the priority change level of 1.1360. Buy trades can be considered on lower time frames, but only with short targets.

Alternative scenario:

if the price breaks out through the 1.1360 resistance level and fixes above, the mid-term uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3193
• Prev. Close: 1.3218
• % chg. over the last day: +0.19%

Goldman Sachs canceled its forecast for the first Bank of England rate hike at the December meeting, amid uncertainty caused by the Omicron option and after new restrictions imposed across the country. The US inflation report for November may trigger a new sell-off in the pound today since analysts expect a strong rise in consumer prices.

Trading recommendations

• Support levels: 1.3188
• Resistance levels: 1.3232,1.3289,1.3326,1.3434,1.3507,1.3575,1.3685

On the hourly time frame, the trend on GBP/USD is bearish. The British pound is trading in a narrow corridor with the range of 1.3188-1.3232. The MACD indicator has become inactive, but there are still signs of divergence on several time frames. Under such market conditions, traders should consider sell positions from the resistance levels around the moving average or from the upper border of the descending channel. Buy trades should be considered from the support level of the higher time frame, but only with additional confirmation.

Alternative scenario:

if the price breaks out through the 1.3326 resistance level and consolidates above, the bullish scenario will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 113.65
• Prev. Close: 113.45
• % chg. over the last day: -0.18%

In Japan, the Producer Price Index, which shows the rate of inflation between companies and factories, increased from 8.3% to 9%. These are the first signs that investors should expect consumer inflation to rise soon. But against the backdrop of massive central bank stimulation of the economy, such a picture looks quite normal. The dollar index may jump up sharply today since inflation in the US is rising. If this happens, the USD/JPY quotes might go up sharply.

Trading recommendations

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

The global trend on the USD/JPY currency pair is bearish. But the pressure of buyers is increasing, and the price is approaching the priority change level. Under such market conditions, traders are better to look for sales 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.

Alternative scenario:

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

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2647
• Prev. Close: 1.2714
• % chg. over the last day: +0.53%

After the oil price stabilized, the USD/CAD quotes started rising again. The Canadian dollar is a commodity currency, as it is highly correlated with oil prices. Technically, the price of oil may drop to the area of $68 a barrel, so the Canadian dollar will be under sellers’ pressure, especially if the dollar index rises sharply today on the background of the expected growth of inflation in the United States.

Trading recommendations

• Support levels: 1.2638,1.2597,1.2502,1.2416
• Resistance levels: 1.2726,1.2776,1.2828

From a technical point of view, the USD/CAD currency trend is bearish. The MACD indicator has become positive. Under such market conditions, it is better to look for buy trades from the 1.2638 support level, but only after additional confirmation in the form of a buyers’ initiative. It is better to consider sell deals from the resistance levels near the moving average.

Alternative scenario:

if the price breaks out through the 1.2776 resistance level and fixes above, the downtrend will likely be broken.