Daily Technical Analysis

EUR/USD

Current level – 1.2185

Throughout the past week, the euro couldn’t breach and hold above the support level at 1.2270. This led to the bears overwhelming the bulls, pushing the currency pair into a corrective phase, which led it to the current level at 1.2188. However, expectations remain positive and a successful breach of the resistance level at 1.2270 should be followed by a test of the next target at 1.2340. In case the bears manage to hold their ground, the currency pair will test the local support at 1.2137 and a potential breach of this level will send a signal for an approaching deeper sell-off targeting the 1.2082 level. The economic data, on which investors will be keeping a close eye this week, is the final GDP Q3 data for the U.S. (Tuesday at 13:30 GMT), existing home sales (again on Tuesday at 14:45 GMT) and new home sales (Wednesday at 15:00 GMT), as well as the U.S initial jobless claims that will be announced on Thursday at 13:30 GMT. During these hours, market volatility will most likely increase.

USD/JPY

Current level – 103.39

During its last trading sessions, the currency pair traded in the range between 103.27 and 103.49 as the dollar continued to depreciate against the Japanese yen. This took the pair to the level of 102.86 , where the bulls prevailed and returned the USD/JPY pair to the resistance level at 103.56. The expectations for further depreciation of the dollar remain and a second test of the support at 103.27 is the most probable scenario. If the pair attempts a successful breach and holds below this level, this will be a signal for a move towards the 102.20 level. On the economic front, traders will be focusing on Japan’s unemployment rate (Friday at 23:30 GMT), retail sales (Thursday at 23:50 GMT), construction orders (Thursday at 23:50 GMT) and housing starts (Thursday at 05:00 GMT), as well on the initial jobless claims for the U.S. (Thursday at 13:30 GMT).

GBP/USD

Current level – 1.3359

Throughоut the past week the Cable rallied to the level of 1.3621, but the currency pair could not hold onto the gains. It reversed its direction, managing to breach the support at 1.3438 and reaching 1.3330 as a result of the newly implemented level 4 lockdown restrictions due to the new COVID-19 strain and the lack of significant progress in the EU negotiations. The GBP/USD did not manage to breach the support at 1.3291 but, at the time of writing the analysis, the most probable scenario is for the sell-off to be stopped by the support at 1.3190, followed by a corrective move towards 1.3438. This week, volatility should pick up after the announcement of the data about the gross domestic product for the UK (Wednesday at 09:30 GMT).