The Analytical Overview of the Main Currency Pairs on 2021.12.28

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1319
• Prev. Close: 1.1326
• % chg. over the last day: +0.06%

Many analytical houses are beginning to revise their growth forecasts downward due to the spread of the Omicron. On the one hand, the Omicron strain is less dangerous. On the other hand, it is transmitted much faster, and many European countries are forced to impose full or partial lockdowns to curb the new wave of disease in the run-up to the New Year holidays. Therefore, investors should not expect strong Q4 2021 reports.

Trading recommendations

• Support levels: 1.1293,1.1230,1.1168
• Resistance levels: 1.1342,1.1360,1.1436,1.1535,1.1613,1.1667,1.1717

From a technical point of view, the EUR/USD on the hour time frame is still bearish. Price is traded in the corridor. The MACD indicator has become inactive; the volatility is below average due to the holidays. It is better to consider sell deals after a false breakout of the 1.1342 resistance level. Buy trades can be considered on the lower time frames from the support level of 1.1293, 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.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3392
• Prev. Close: 1.3442
• % chg. over the last day: +0.37%

Today is a bank holiday in the UK, so volatility on the GBP/USD currency pair is expected to be low. In the medium term, an increase in the Fed balance sheet and lower concerns about the Omicron strain will temporarily weaken the dollar index and a rise in the British currency. The British currency is also positively influenced by the growth of oil prices. Analysts believe that the British pound will be stable until the end of the QE program from the Fed, i.e., until March 2022.

Trading recommendations

• Support levels: 1.3362,1.3301,1.3277,1.3220
• Resistance levels: 1.3434,1.3507,1.3575,1.3685

On the hourly time frame, the trend on GBP/USD is still bullish. The MACD indicator is showing a divergence. Under such market conditions, traders should consider buy positions from the 1.3362 support level but only with additional confirmation in the form of a buyers’ initiative. Sell trades can be considered from the resistance level of 1.3434, but only with additional confirmation in the form of a false breakout.

Alternative scenario:

if the price breaks down through the 1.3277 support level and consolidates below, the bearish scenario will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 114.36
• Prev. Close: 114.88
• % chg. over the last day: +0.45%

Japan’s unemployment rate in November increased for the first time in six months to 2.8% from 2.7% in October. Analysts had forecast no change. Industrial production in Japan increased by 7.2% in November. Analysts had expected a less strong amount of 4.8%. Industrial output peaked last month on a rebound in activity in Japan’s auto sector due to easing problems in component supply chains. Auto production jumped by 43.1% in November.

Trading recommendations

• Support levels: 114.50,114.30,113.95,113.68,113.30,112.62,112.30
• Resistance levels: 115.15,115.50

The global trend on the USD/JPY currency pair is bullish. The MACD indicator is signaling a divergence at several timeframes, which means that a slight correction should be expected. Buy positions should be considered from the 114.50 support level, but with additional confirmation in the form of a buyers’ initiative. There is no optimal entry point for sell positions now.

Alternative scenario:

if the price fixes below 113.95, the uptrend will likely be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2807
• Prev. Close: 1.2786
• % chg. over the last day: -0.16%

The Canadian dollar is a commodity currency, so it correlates strongly with oil prices and the dollar index. Yesterday, oil prices increased, while the dollar index was stable. The Canadian dollar is slowly strengthening. Today is a bank holiday in Canada, so volatility on the USD/CAD currency pair is expected to be low.

Trading recommendations

• Support levels: 1.2783,1.2721,1.2677,1.2638
• Resistance levels: 1.2903,1.2951

From a technical point of view, the USD/CAD currency pair trend is bullish. But the price has tested the priority change level for the third time; the sellers are trying to intercept the initiative. The MACD indicator is not active, but there is a divergence to buy. Under such market conditions, it is better to look for buy deals from the priority change level of 1.2783, but after an additional confirmation in the form of a false breakdown or a new initiative of buyers. Sell deals should be considered from the resistance level of 1.2903 or after breakdown and fixation below the priority change level.

Alternative scenario:

if the price breaks down through the 1.2783 support level and fixes below, the downtrend will likely resume.