The EUR/USD currency pair
- Prev Open: 1.0945
- Prev Close: 1.0874
- % chg. over the last day: -0.62 %
On Monday, the US dollar rose on the back of rising T-note yields and hawkish comments from Fed member Waller, who said that the Fed has no reason to cut rates as fast as in the past. As a result, EUR/USD fell to a 1-month low on Tuesday. The decline in inflation expectations in the Eurozone was a dovish factor for ECB policy and a bearish factor for the euro. In addition, comments from ECB Governing Council representatives Centeno and Simkus put further pressure on the Euro on Tuesday, with Centeno saying that Eurozone GDP in the first quarter still looks rather stagnant and Simkus saying that he is much less optimistic than the markets about an ECB rate cut. Eurozone inflation data will be released today, but no change is expected.
- Support levels: 1.0864, 1.0827
- Resistance levels: 1.0908, 1.0938, 1.0985, 1.1010, 1.1037, 1.1080, 1.1097, 1.1171.
The trend on the EUR/USD currency pair on the hourly time frame is a downtrend. The price broke through the support level of 1.0908 on impulse and reached the level of 1.0864, where buyers showed a very weak reaction. At the moment, the price is trading below the moving averages, and the MACD indicator is negative and indicates further decline. The price consolidation below 1.0864 will open the way to 1.0827. Buying can be looked for from the support level of 1.0864 or 1.0827, but only with confirmation and short targets, as these will be positions against the main price bias. Selling can be considered from 1.0908 or from the moving averages.
Alternative scenario: if the price breaks the resistance level of 1.0969 and consolidates above it, the uptrend will likely resume.
- – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+2);
- – US Retail Sales (m/m) at 15:30 (GMT+2);
- – US FOMC Member Bowman Speaks at 16:00 (GMT+2);
- – US Industrial Production (m/m) at 16:15 (GMT+2);
- – Eurozone ECB President Lagarde Speaks at 17:15 (GMT+2);
- – US FOMC Member Williams Speaks at 22:00 (GMT+2).
The GBP/USD currency pair
- Prev Open: 1.2724
- Prev Close: 1.2635
- % chg. over the last day: -0.70 %
Today, the UK will publish the monthly consumer inflation (CPI) report as well as the producer inflation (PPI) report. The overall consumer inflation rate is expected to fall from 3.9% to 3.8% on an annualized basis. Meanwhile, the core rate, which excludes volatile food and energy prices, is expected to decline from 5.1% y/y to 4.9% y/y. Producer prices are expected to decline by 0.2% month-on-month. Against the background that wage growth in quarterly terms fell sharply from 7.2% to 6.5%, weakening inflationary pressures may put additional pressure on the British currency.
- Support levels: 1.2611, 1.2572, 1.2548, 1.2499
- Resistance levels: 1.2672, 1.2712, 1.2787, 1.2827, 1.2881, 1.2937
From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price broke through the support level of 1.2672 and fell to 1.2611. At the moment, there is no reaction from buyers, which increases the probability of further decline. The MACD indicator is negative, and the pressure is bearish, but there are the first signs of divergence. Buying should be sought from the support level of 1.2611 but with confirmation in the form of buyers' reactions and short stop losses. A breakdown of 1.2611 will open the way to 1.2572. Selling is best considered from the moving average lines to continue the decline.
Alternative scenario: if the price breaks through the resistance level of 1.2764 and consolidates above it, the uptrend will likely resume.
- – UK Consumer Price Index (m/m) at 09:00 (GMT+2);
- – UK Producer Price Index (m/m) at 09:00 (GMT+2).
- Prev Open: 145.70
- Prev Close: 147.18
- % chg. over the last day: +1.02 %
- Support levels: 146.80, 146.39, 145.45, 144.33, 143.41, 142.18, 141.12
- Resistance levels: 148.00
- Prev Open: 2054
- Prev Close: 2028
- % chg. over the last day: -1.28 %
- Support levels: 2019, 2013, 2008, 1997, 1987, 1973
- Resistance levels: 2031, 2048, 2064, 2072, 2084, 2090, 2142
- – US Retail Sales (m/m) at 15:30 (GMT+2);
- – US FOMC Member Bowman Speaks at 16:00 (GMT+2);
- – US Industrial Production (m/m) at 16:15 (GMT+2);
- – US FOMC Member Williams Speaks at 22:00 (GMT+2).
The USD/JPY currency pair
The Japanese yen fell to a 5-week low against the dollar on Tuesday. Fed Chief Waller's comments on Tuesday dampened expectations of a Fed rate cut and boosted the dollar. In addition, expectations that Japanese inflation will continue to decline this Friday will reinforce confidence that the Bank of Japan will maintain its negative interest rate policy at next week's meeting. All these factors are bearish triggers for the yen.
From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is growing steadily without noticing the resistance levels. Moving averages again support the growth, and the MACD indicates an upward momentum, but divergence is forming again on the higher time frames. Under such market conditions, buying should be sought from the support level of 146.80 or from the moving average lines. Sell deals can be considered within the correction from the 148.00 resistance level, but only with confirmation and short targets.
Alternative scenario: if the price consolidates below the support at 144.33, the downtrend will likely resume.
The XAU/USD currency pair (gold)
Precious metals closed moderately lower on Tuesday. The dollar index rally on Tuesday was bearish for metals. The rise in global bond yields on Tuesday also hurt precious metals. In addition, hawkish comments from global central banks muted speculation about an imminent interest rate cut and put additional pressure on precious metals.
From the point of view of technical analysis, the trend on the XAU/USD is bullish, but the price is approaching the priority change level. In the case of gold, it is undesirable for the price to even test the 2013 level as it could trigger a wave of sell-offs. The MACD indicator is in the negative zone, there is selling pressure remains. Under these market conditions, buy trades can be sought from the 2019 support level, but only with confirmation, as a breakdown of this level will open the way for the price below 2000. Selling trades can be sought from the 2031 resistance level, but only with short targets to nearby levels.
Alternative scenario: if the price breaks and consolidates below the support level of 2013, the downtrend will likely resume.
by , 2024.01.17
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