In-depth technical and fundamental analysis and forecast for currencies & commodities by experienced financial analysts: EUR/USD, GBP/USD, AUD/USD, EUR/GBP, USD/JPY, USD/CHF, XAU/USD, XTI/USD and more. Currency price movements, support and resistance analysis, major economic events, that affect the formation of exchange rates.
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EUR/USD remained well bid above 1.2120 and it is currently rising. USD/CHF is declining and it might continue to move down towards the 0.8820 support zone.
## EUR/USD Technical Analysis
After a steady increase, the Euro faced a strong resistance near the 1.2350 zone against the US Dollar. The EUR/USD pair formed a swing high at 1.2344 and started a strong decline.
It broke many key supports near 1.2240 and 1.2220. There was also a break below the 1.2180 support level and the 50 hourly simple moving average. Finally, the pair found support above 1.2130. A low is formed near 1.2133 on FXOpen and the pair is currently rising.
It broke the 1.2180 resistance level and the 50 hourly simple moving average. There was a break above the 23.6% Fib retracement level of the downward move from the 1.2344 high to 1.2133 low.
There was also a break above a major bearish trend line with resistance near 1.2200 on the hourly chart of EUR/USD. The pair is now trading above the 1.2200 level. An initial resistance is near the 1.2222 level. The first major resistance is near the 1.2240 level.
The 50% Fib retracement level of the downward move from the 1.2344 high to 1.2133 low is also near 1.2240 level. Therefore, a break above 1.2240 could accelerate upsides towards 1.2300.
If not, the pair could start a fresh decline from 1.2240. An initial support is near the 1.2185 level. The next major support is near the 1.2170 level. Any more losses could lead the pair towards the 1.2100 zone.
## USD/CHF Technical Analysis
The US Dollar followed a strong bullish path above the 0.8850 level against the Swiss franc. The USD/CHF pair even broke the 0.8900 level, but it struggled to clear the 0.8920 zone.
A high was formed near 0.8920 before the pair started a downside correction. There was a break below the 0.8900 support level and the 50 hourly simple moving average to open the doors for a major correction.
There was also a break below a key bullish trend line with support near 0.8888 on the hourly chart. The pair broke the 50% Fib retracement level of the upward move from the 0.8822 swing low to 0.8920 high.
The pair could continue to move down towards the 0.8845 support. It is close to the 76.4% Fib retracement level of the upward move from the 0.8822 swing low to 0.8920 high. Any more losses might call for a test of the 0.8820 support.
On the upside, an initial resistance is near the 0.8870 level. The main resistance is forming near the 0.8890 level and the 50 hourly simple moving average.
A close above the 0.8880 and 0.8890 levels could open the doors for another steady increase above 0.8900 in the near term.
Financial markets started the new year on the same note as the previous year ended – higher stocks, lower dollar. The extent of the advance in the stock market, or the decline in the dollar, led many market participants to wonder if the Fed’s monetary policy did not lead to financial bubbles?
After all, a survey shows that over 25% of the market participants still believe that Bitcoin will double from the current levels. Or, 18% believe that the price of Tesla will double over the next twelve months. That is, in the context of Bitcoin already rising from $10,000 to $40,000 in the last months and Tesla already being up over 650% in 2020.
To many, the weakness in the dollar is responsible for such extreme price action. If we are to see a change in the trend, as suggested by the 56% of the market participants that expect a higher dollar against Bitcoin for the next twelve months, then the risk may come from Wednesday Fed’s decision.
On Wednesday, the Fed is expected to keep the monetary policy unchanged – the federal funds rate at the lower boundary and the QE program running at $120 billion/month. However, this week, the focus will shift from the FOMC Statement to the Fed’s press conference.
More precisely, it will be more important what the Fed thinks about the future economic outlook. In the face of the rapid pace of vaccinations (i.e., the United States already vaccinated 6% of its population), the risk is that the Fed will deliver a slightly hawkish outlook for the future economic recovery. If that is the case, the dollar may turn in the expectation of the future tapering of the quantitative easing program.
Last week the ECB delivered a slightly hawkish statement too. It said that it may or may not use the full envelope of the PEPP program, despite the fact that many European countries face the worse of the pandemic right now.
As such, one should not discount a hawkish Fed too. If that happens, the USD will make a U-turn because the reflation trade that went on for months now seems to be extremely stretched.
As we saw in 2020, the dollar’s direction matters for the equity markets and other markets too. For stocks to remain close to all-time highs, the correlation with the dollar must break.
Will we see such a divergence on Wednesday? Or will the reflation trade continue after the Fed’s first meeting of the year?
GBP/USD extended its rise above the 1.3680 and 1.3700 resistance levels. EUR/GBP is correcting lower and it is approaching a major support near 0.8875.
After forming a base above the 1.3500 and 1.3520, there was a fresh increase in the British Pound against the US Dollar. The GBP/USD pair broke the 1.3580 and 1.3600 resistance levels to move into a positive zone.
The pair gained momentum above 1.3600 and it even spiked above the 1.3680 resistance. There was also a break above the 1.3700 zone and the pair settled above the 50 hourly simple moving average.
A new multi-month high was formed near 1.3746 on FXOpen before the pair started a downside correction. It traded below the 1.3680 support level and the 50 hourly simple moving average, but the bulls protected the 1.3640 level.
A low is formed near 1.3636 and the pair is currently rising. It is trading above the 1.3680 level, the 50 hourly simple moving average, and the 50% Fib retracement level of the downward move from the 1.3746 high to 1.3636 low.
It seems like there is a key contracting triangle forming with resistance near 1.3715 on the hourly chart of GBP/USD. An immediate resistance is near the 1.3700 zone or the 61.8% Fib retracement level of the downward move from the 1.3746 high to 1.3636 low.
A successful break above the 1.3700 and 1.3715 levels could open the doors for a new high above the 1.3746 in the near term. Conversely, the pair could break the triangle support and continue lower towards the main 1.3620 support level.
The Euro started a fresh increase from the 0.8830 low against the British Pound. The EUR/GBP pair broke the 0.8850 and 0.8860 resistance levels to move into a positive zone.
There was also a break above a short-term bearish trend line with resistance near 0.0.8860 on the hourly chart. The pair surged above the 0.8900 level, but it struggled to clear a major hurdle near the 0.8920 zone.
A high is formed near 0.8918 and the pair is currently declining. It broke the 0.8900 level and tested the 38.2% Fib retracement level of the upward move from the 0.8830 swing low to 0.8918 high.
On the downside, there is a major support waiting near the 0.8875 level and the 50 hourly simple moving average. It is also close to the 50% Fib retracement level of the upward move from the 0.8830 swing low to 0.8918 high.
Any more losses could lead the pair towards the 0.8850 support level in the near term. Conversely, the pair could start a fresh increase from the 0.8875 support zone.
On the upside, the 0.8900 level is a short-term resistance for the Euro bulls. However, the main hurdle is still near 0.8920, above which EUR/GBP could rally towards the 0.9000 resistance.
AUD/JPY picks up bids near 80.05 during the initial Asian trading on Tuesday. The quote dropped to the lowest in one week the previous day but couldn’t keep the downside momentum as the key support lines and 21-day EMA probed sellers.
Even so, bearish MACD and a gradual weakness since early January keep sellers hopeful.
As a result, AUD/JPY buyers will wait for a clear run-up beyond the 80.10 round-figure, also comprising an upward sloping trend line from December 21, 2020, to challenge the previous week’s top around 80.50.
However, a descending resistance line from January 08, currently around 80.70, followed by the monthly top of 80.92 and the 81.00 threshold, will be tough nuts to crack for the AUD/JPY bulls.
Meanwhile, 21-day EMA and an ascending trend line from December 28 test short-term AUD/JPY sellers around 79.90-80. Also acting as the support is the monthly low near 79.50.
Should the AUD/JPY prices stay weak past-79.50, mid-December tops near 78.80 will gain the market attention.
GBP/USD drops to 1.3663, staying around Monday’s low of 1.3648, as Asian traders begin Tuesday’s session. In doing so, the cable responds to the fresh risk-off mood after flashing a two-day losing streak. While the coronavirus (COVID-19) conditions seem recovering at home, broad fears of virus variants and a delay in the much-awaited US fiscal stimulus, not to forget pre-data/event cautious sentiment, sour the market mood and heavy the pair.
Having witnessed a slew of disappointment due to the virus variant, the UK government finally had some good news as the figures suggest sustained weakness in the infections as well as the death toll. On Monday, the country reported the lowest cases since mid-December. While conveying the success of heavy vaccinations and lockdown, British Health Secretary Matt Hancock praised the latest measures to flash early positive signs.
Even so, the market’s sentiment is heavy amid fears of further delay in the US covid aid package. The chatters gained momentum after Senate Democratic Leader Chuck Schumer said, “they will try to pass stimulus in a month, month-and-a-half”. Also favoring the risk-off mood could be the speculations over a lag in COVID-19 vaccines and downbeat expectations from this week’s key events, namely the US Q4 GDP as well as the Fed meeting.
Against this backdrop, Wall Street benchmarks trade mixed while FTSE 100 lost 0.84% by the end of Tuesday’s trading. Further, the US 10-year treasury yields decline six basis points to 1.03%, the lowest since January 07.
Although market players are currently waiting for Moderna’s vaccine announcement to clarify the vaccine’s ability to combat the virus strain, British employment data for December, up for publishing at 07:00 AM GMT, will be the key to watch. Forecasts suggest the headline Unemployment Rate increase from 4.9% to 5.1% for the three months to November while Average Earnings are likely to improve during the stated period.
Given the mixed expectations from the scheduled UK data, GBP/USD will have to rely on the US dollar moves and risk catalysts unless any surprises from the jobs report strongly backs negative interest rate speculations.
Read: UK Jobs Preview: Another positive surprise? GBP/USD could use a shot in the arm
Although pullback from multi-month high teases GBP/USD sellers, a confluence of 21-day SMA and an ascending trend line from December 21, currently around 1.3615, restricts short-term downside. Meanwhile, upside momentum may regain life beyond 1.3750.
GBP/USD 0001-01-01T00:00:00
0/0 (0%)
H0 L0
| S3 | S2 | S1 | R1 | R2 | R3 |
|---|---|---|---|---|---|
| 1.3529 | 1.3583 | 1.3632 | 1.3734 | 1.3787 | 1.3836 |
| Trend Index | OB/OS Index |
|---|---|
| Bearish | Neutral |
NZD/USD is currently trading at 0.7191 between a low of 0.7170 and a high of 0.7217 as we head into the close of Wall Street on a day where global markets have kicked off the week with a risk-off tone
Fixed income is on vouge as headlines emerge that Biden’s fiscal package might not get voted on until mid-March.
At the same time, investors are wary about towering stock market valuations amid questions over the efficacy of the vaccines in curbing the pandemic.
Meanwhile, NZD positioning continued to move higher in the latest CFTC report despite already being the biggest G10 speculative long.
The high beta currencies may start to falter, however, if US stocks take a turn for the worst. See the chart below.
Looking ahead, it is going to be a busy week, ‘‘but ultimately one that could see the current period of consolidation in the dollar extend a while further,’’ analysts at ANZ Bank argued.
‘‘Foremost, the FOMC meeting will be dovish. While fiscal developments are welcome, the US labour market, inflation and consumption data have been very weak recently,’’ the analysts explained.
‘‘Amid very high levels of infections, it is very difficult for a self-sustaining recovery to take hold amid disruption to key areas of services. As the market flip flops between the weak data and the brighter outlook, NZD/USD can remain range bound.’’
[USD/CAD] tested the top of a long-term downtrend (linking the mid/late November, late December and January highs) in recent trade. The pair faked a breakout when it briefly shot as high as the 1.2780 mark, and is now trading back under the downtrend and under the 1.2750 mark, implying that (for now) the long-term downtrend remains intact. A break above this downtrend, which is highly possible, would open the door to a test of the 1.2800 level (the high of 18 January) and then the pair’s 50-day moving average at 1.2838.
Gold price made an attempt to surpass the $1,860 resistance, but there was a major rejection. Crude oil price seems to be consolidating gains above $51.50 and $51.20.
Gold price settled below the main $1,900 pivot level to move into a bearish zone against the US Dollar. The price even settled below the $1,880 level and the 50 hourly simple moving average.
On the downside, the price is finding strong bids above the $1,830 and $1,835 levels. Recently, there was a sharp recovery above the $1,850 level and the 50 hourly simple moving average. However, the price failed to clear the $1,860 resistance level.
A high was formed near $1,863 on FXOpen before there was a fresh decline. A low is formed near $1,835 and the price is currently consolidating losses.
There was a break above the 23.6% Fib retracement level of the downward move from the $1,863 swing high to $1,838 low. It is now facing resistance near the $1,845 level and the 50 hourly simple moving average.
The next major resistance is near the $1,850 level. The 50% Fib retracement level of the downward move from the $1,863 swing high to $1,838 low is at $1,850. There is also a major bearish trend line forming with resistance near $1,855 on the hourly chart of gold.
On the downside, there is a connecting bullish trend line forming with support near $1,838. The first key support is near the $1,830 level. The next major support is at $1,820, below which the price might test the $1,800 support level.
Crude oil price remained in a strong uptrend well above the $50.00 resistance zone against the US Dollar. The price settled nicely above $52.00 and it even made a few attempts to gain strength above the $54.00 level.
The recent high was formed near $53.47 before the price trimmed most gains. It broke the $53.00 support and tested the $52.00 level.
A low is formed near $51.98 and the price is currently consolidating. It tested the 23.6% Fib retracement level of the recent decline from the $53.47 high to $51.98 low. The first major resistance is near the $52.55 level and the 50 hourly simple moving average.
The next key resistance is near the $52.75 level or the 50% Fib retracement level of the recent decline from the $53.47 high to $51.98 low.
Moreover, it seems like there is likely an expanding triangle forming with support near $52.00 on the hourly chart of XTI/USD. If there are more downsides below the triangle support, the price could test the $51.50 support.
The next key support is near the $51.20 level. On the upside, the $53.50 and $54.00 levels are major hurdles. A clear break above $54.00 may possibly lead the price towards the $55.00 level.
This past week, the Euro climbed above the 1.2150 resistance zone against the US Dollar. However, the EUR/USD pair faced a major resistance near the 1.2200 and 1.2210 levels.
There were a couple of attempts to clear 1.2200, but the bulls failed to gain strength. As a result, there was a sharp decline below 1.2150. The pair broke the 1.2120 support, but it found a strong support near 1.2100.
A low was formed near 1.2107 before the pair bounced back to 1.2175. A high is formed near 1.2175 on FXOpen and it is currently correcting lower.
The pair is testing the 23.6% Fib retracement level of the recent wave from the 1.2107 swing low to 1.2175 high. The first major support on the downside is near the 1.2150 level and the 50 hourly simple moving average.
The next major support is near the 1.2140 level. It is close to the 50% Fib retracement level of the recent wave from the 1.2107 swing low to 1.2175 high. On the upside, an immediate resistance is near the 1.2175 level.
There is also a major contracting triangle forming with resistance near 1.2170 on the hourly chart of EUR/USD. A clear break above the triangle resistance could push the pair towards the main 1.2200 resistance zone.
If EUR/USD clears the 1.2200 resistance zone, there could be a strong increase. In the stated case, the pair could easily rise towards 1.2250 or 1.2265.
The Euro also followed a similar path after it faced seller near 1.2640 against the Japanese Yen. The EUR/JPY pair broke the 126.00 support level, but it remained stable above the 125.70 level.
A low is formed near 125.69 and the pair is currently rising. There was a clear break above the 126.00 level and the 50 hourly simple moving average. The pair also climbed above the 50% Fib retracement level of the recent decline from the 126.39 high to 125.69 low.
It is now facing resistance near the 126.12 level. It represents the 61.8% Fib retracement level of the recent decline from the 126.39 high to 125.69 low.
There is also a key contracting triangle forming with resistance near 126.15 on the hourly chart. A clear break above the triangle resistance and 126.20 could open the doors for more upsides. The next major resistance is near 126.40, above which the bulls might aim a test of the 127.00 level.
Conversely, the pair could drop below the 126.00 level and the 50 hourly SMA. In the stated case, it could test the triangle support at 125.90. Any more losses could open the doors for a drop towards the 125.50 level in the near term.
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