The EUR/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.2149
Prev Close: 1.2198
% chg. over the last day: +0.40%
On Wednesday afternoon, together with the positive PMI data, EUR/USD was able to break through the upper border of consolidation and, possibly, headed to conquer new highs at the level of 1.2414, which is the maximum of April 2018. The Fed didn’t support the precipitous dollar, promising to extend the asset purchase program as long as it will be necessary. Both factors are bullish for the pair.
Trading recommendations
Support levels: 1.2177, 1.2124
Resistance levels: 1.2414
The main scenario: buying on a decline. The broken upper border of the range is likely to provide the support. The MACD confirms the rise. The ADX also indicates an uptrend scenario, but at a slow pace. Most likely, the pair will soon form a new maximum and show the boundaries of a new range.
Alternative scenario: if the price can fix below the level of 1.2177, it is possible that the price will return to the previous range or move to correction.
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.3458
Prev Close: 1.3504
% chg. over the last day: +0,34%
The sterling continues to demonstrate a steady uptrend. On Wednesday, the quotes reached 1.3552 – the highest level since May last year. The bulls could do with disappointing statistics from the service sector – the most economically important one for the Foggy Albion. The figures didn’t demonstrate the transition to growth and remained in the contraction zone at the level of 49.9. The consumer price index reflects deflation in November at the level of -0.1%, and in annual terms, there is a slowdown in the pace to 0.3% from 0.7% a month earlier.
Trading recommendations
Support levels: 1.3449, 1.3287
Resistance levels: 1.3613, 1.3657
The main scenario: alertness on a decline. The ADX shows the presence of bullish potential, but it’s constantly slowing down. The MACD still signals an approaching correction, as the divergence doesn’t disappear. The pair has moved far from the moving averages located at 1.3456 (SMA 50) and 1.3377 (SMA 100), which indirectly indicates a short-term overbought. It is advisable to wait for the rollback of the price to open long positions.
Alternative scenario: if the price fixes below 1.3456, the bullish momentum will be lost and we can consider selling the currency pair.
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 103.66
Prev Close: 103.45
% chg. over the last day: -0.20%
The USD/JPY currency pair is somewhat surprising in the currency market. The bearish direction can be explained by the decline in the dollar index, but only partially. A positive sentiment in the stock market and a lack of fear in the credit market usually support the pair. But while the yields of the benchmark US Treasuries are far from their minimum and the stock market is trading at its maximum, USD/JPY is near the minimum of this March.
Trading recommendations
Support levels: 103.17, 103.09
Resistance levels: 103.93, 104.15
The main trading scenario for the pai: selling on growth, but after a rollback to the moving averages. An uptrend correction is possible during the day, as the pair has reached support levels. In the Asian session, the southern impetus is ineffectually supporting the ADX, showing a slow rise. The trend potential is falling. The MACD is in the negative zone, but it will form a divergence in case of a rollback. The rise to the moving averages 103.59 – 103.79 and renewal of the fall is possible.
An alternative scenario assumes a break-through of 103.79 and the development of a deeper correction to 103.93 and 104.15.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.2697
Prev Close: 1.2736
% chg. over the last day: +0.31%
Yesterday this currency pair was the only one of the majors where the US dollar was in the positive zone by the end of the day. But it’s most likely that there will be no tendency to continue strengthening the USD. The oil market continues to grow, supporting the Canadian and other commodity currencies. There are no signs of a reversal.
Trading recommendations
Support levels: 1.2688, 1.2528
Resistance levels: 1.2792, 1.2835
We are considering selling up to the level of 1.2528. The movement may be accelerated due to oil prices. The ADX indicates growth of the potential and there is a possibility of a break-through of the first support level.
Alternative scenario: if the price manages to return above 1.2792, the south trend will be broken and a buy signal will appear towards the level of 1.2835.
