Daily Technical Analysis

EUR/USD

Current level – 1.2233

Yesterday, the pair began trading on the back foot due to newly imposed travel restrictions across Europe and the worsened outlook for a swift economic recovery. The panic couldn’t fully petrify investors and bulls showed strong buying interest below the 1.2160 support, managing to recover the losses from the start of the session. Key support is forming around the 1.2160 level and the local one for the day is found at 1.2200. The first resistance zone for the buyers is 1.2250-1.2270. Bullish sentiments are prevailing in the market and, after the recent test of 1.2160, we can expect an attempt for a breach of 1.2270, with a potential rally to the 1.2430 level. Should the enthusiasm wear off, the market could enter a new range between 1.2160 and 1.2270. A bearish scenario would be possible if trading falls below 1.2080. Today, the events worth mentioning in the economic calendar are the third quarter GDP data for the U.S. (13:30 GMT) and the existing home sales data (15:00 GMT), again for the U.S.

USD/JPY

Current level – 103.35

The resistance at 103.72 was tested once again. Once there, however, the bulls were slammed back down and prices returned to the 103.27 support. Yesterday, the prime minister of Japan instructed the Ministry of finance not to let the USD/JPY fall below 100.00. That would surely attract speculators who would be willing to test the government’s resolve. It’s likely that every rally will be shorted as bears would target the psychological threshold of 100.00. First support zones at the moment are 103.27 and 103.01. The key resistance zones are found at 103.72 and 104.03. As long as prices stay below 104.03, bears would be the dominant power on this market.

GBP/USD

Current level – 1.3417

The new restrictions and travel bans in the UK, caused by the new strain of COVID-19, weighed on the sterling and a wave of sell-offs commenced the week. Much of the losses wеre parried as bulls stepped in around the 1.3185 support. Volatility should remain high due to a looming Brexit, the new lockdowns and the evaporating market liquidity as the year nears its end. The first support is the level of 1.3400, followed by the ones at 1.3315 and at 1.3215. Taking the current situation into account, rallies above 1.3500 are not very likely and bears would have the opportunity to take advantage of the chaos and retake control.