Forex Technical Forecasts by Forex92

The US Dollar (USD) slid down against the Canadian Dollar (CAD) on Friday, for the third consecutive day, decreasing the price of USDCAD pair to less than 1.2800, ahead of the release of the US ISM Manufacturing PMI news. The technical bias remains bearish as the pair printed a lower high in the recent upside move.

Technical Analysis

As of this writing, the USDCAD pair hovers around 1.2733, with a few major support levels seen nearby. The price is likely to find some support near the given below levels:

Short-Term Support Levels

1.2686, a major horizontal support

1.2522, the lower trendline arm

1.2432, the low of October 08, 2017

On the upside, the pair might face some resistance near the levels as mentioned below;

Short-Term Resistance Levels

1.2860, a key resistance level

1.2967, the 38.2% Fib level resistance

1.3050, the high of November 10, 2020

The technical bias should remain bearish unless 1.2860, a major horizontal resistance level, is broken.

US ISM Manufacturing PMI news

The Institute for Supply Management (ISM) is scheduled to release stats for the US ISM Manufacturing PMI on Tuesday (January 05, 2021). According to the consensus of economists, the ISM Manufacturing PMI registered a reading of 56.5 points in December, as compared to a reading of 57.5 points in the month before.

The US Manufacturing PMI reflects the overall business conditions in the manufacturing sector. Being an important economic indicator, it also provides insights into the current financial health of the country. Generally speaking, a reading above 50 signals a bullish market trend for the USDCAD and vice versa.

Conclusion

Considering the overall technical outlook, selling the USDCAD pair around current levels might be a good move in short to medium term. Here is a trading plan for next week:

Sell Limit : 1.2769

Stop Loss: 1.2805

Take Profit: 1.2690

Euro (EUR) slid down against the U.S. Dollar (USD) last week, decreasing the price of the EURUSD pair to less than 1.2300 ahead of the release of the US Consumer Price Index (CPI) news. The technical bias remains bullish because the pair printed a higher high in the recent upside move.

Technical Analysis

As of this writing, the EURUSD pair hovers around 1.2221, with multiple support levels in sight. The pair is likely to find some support near the given below price levels:

Short-Term Support Levels

1.2171, a key horizontal support

1.2062, the 38.2% Fibonacci retracement

1.1885, the low of November 26, 2020

The support levels are demonstrated in the given below daily chart.

On the upside, the EURUSD pair is likely to face some resistance near the price levels mentioned below:

Short-Term Resistance Levels

1.2348 – a major horizontal resistance

1.2400 – the psychological number

1.2515 – the 38.2% fib level resistance

The technical bias should remain bullish as long as 1.2171, a major horizontal support, remains intact.

U.S. Consumer Price Index

The US Department of Labor is scheduled to release the stats for the Consumer Price Index (CPI) excluding food and energy on Wednesday (January 13, 2021). According to the average projections of economists, the consumer price index registered a reading of 0.1 percent in December, as compared to a reading of 0.2 percent in the month before.

The US Consumer Price Index Ex Food & Energy is an estimate of change in the retail prices of different products and services selected from different sizes of stores countrywide through targeted sampling. It is pertinent to mention here that the stats for the U.S. Consumer Price Index doesn’t include the prices of volatile products such as food and energy in a bid to remain unbiased.

Generally speaking, a higher reading of CPI is considered good for the U.S. economy and vice versa. A better than expected reading of CPI means bearish trend for the EURUSD pair and vice versa.

Conclusion

Considering the macroeconomic outlook of the pair, here is a short to medium term trading plan for the EURUSD:

Sell EURUSD if the price gives a daily closing below the 1.2150 handle, with a 50 pips stop loss and a target of at least 150 pips.

The U.S. Dollar (USD) rose against the Japanese Yen (JPY) last week, increasing the price of the USDJPY pair to more than 103.00, ahead of the release of Japan’s interest rate decision.

Technical Analysis

As of this writing, the USDJPY pair consolidates around 103.84. The price is likely to face hurdle near the given below price levels:

Short-Term Resistance Levels

104.25 – A major horizontal resistance

104.75 – The high of December 02, 2020

105.27 – The Fibonacci retracement (61.8%)

On the downside, the pair is likely to find some support near the given below price zone:

Short-Term Support Levels

103.46 – The low of December 29, 2020

102.58 – A major horizontal support

102.00 – The psychological level

Bank of Japan (BOJ) Interest Rate Decision

The bank of Japan (BOJ) is scheduled to decide the new interest rate for the country on Thursday (January 21, 2021). As per the average estimate of economists, Japan’s interest rate should remain unchanged at -0.1% in December, as compared to the reading of -0.1% in the month before.

The Bank of Japan’s (BOJ) interest rate decision reflects the economic conditions of the country. A hawkish approach by the BOJ towards the inflationary outlook of the country’s economy indicates economic growth. On the other hand, if BOJ remains dovish and cuts interest rates, then it signals a weakened economy. Generally speaking, a higher than expected reading suggests a bearish market for the USDJPY pair and vice versa.

Conclusion

Considering the macroeconomic and technical outlook of the pair, here is a short to medium term trading plan for USDJPY:

Sell on a breakout below 103.50 with a stop placed around 104.50 and target around 102.00