Forex Market Analysis

Daily F.X. Analysis, December 27 – Top Trade Setups In Forex – Weaker Dollar In-Play

On the forex front, the U.S. Dollar Index was little changed at 97.65 in thin holiday trading. The Euro edged up 0.1% to $1.1101, and the British pound gained 0.3% to $1.3001. The USD/JPY climbed 0.2% to 109.54.

The U.S. Labor Department reported that initial jobless claims fell to 222,000 in the week ended December 21 (220k expected) from 235,000 in the prior week. Today, the focus is going to be on the technical side of the market as the economic calendar remains muted. 


Economic Events to Watch Today

Let’s took at these fundamentals.


EUR/USD – Daily Analysis

The EUR/USD edged up 0.1% to $1.1101, and the British pound gained 0.3% to $1.3001. The U.S. President Donald Trump said on Tuesday that he and Chinese President Xi Jinping would have a ceremony to sign the phase-one of the trade deal reached earlier this month. 

Mr. Lowe also added that the E.U. was failing, so they rammed the Euro in. He said that Euro was destined to fail and would have collapsed by now if it was not for massive quantitative easing by ECB.

On the other hand, the macroeconomic calendar remained empty on Thursday except for the U.S. jobless claims for the previous week. The U.S. unemployment claims during last week were recorded as 222K, which came in line with the expectations. 

Daily Support and Resistance

  • S3 1.0974
  • S2 1.1031
  • S1 1.1053

Pivot Point 1.1089

  • R1 1.1111
  • R2 1.1146
  • R3   1.1203

EUR/USD– Trading Tips

The EUR/USD is trading with the slightly bearish sentiment, and it’s very likely to test the next support area around 1.1110 on the 4-hour chart. The bearish breakout of this level can trigger further selling until 1.1085. Conversely, the bullish bias can lead the EUR/USD to 1.1125 and 1.1160 resistance levels. Let’s wait for the buy trade above 1.1110 today.  


GBP/USD– Daily Analysis

The GBP/USD gained 0.3% to $1.3001. Boris Johnson has announced to make his Brexit deal as law, and in case of not reaching a trade deal with E.U. by the end of next year, then U.K. will leave E.U. without any agreement. However, it was highly unlikely because PM Johnson now holds the majority of the U.K. Parliament. 

The Parliament has already approved his deal for leaving E.U., and there are fewer chances that E.U. & U.K. will not reach a trade deal. Furthermore, PM Johnson has also said that he would make sure the departure of the U.K. from the European Union on January 31.

The British economy has been showing weaknesses for some time, and it is possible that Bank of England would start easing its monetary policy soon, which will drag the GBP/USD pair back from 1.30 level.

In the U.K., the British Banker’s Association will report November finance loans for housing (41.2 billion pounds expected).

Daily Support and Resistance

  • S3 1.2757
  • S2 1.2901
  • S1 1.2955

Pivot Point 1.3044

  • R1 1.3099
  • R2 1.3188
  • R3 1.3331

GBP/USD– Trading Tip

The GBP/USD has broken the support mark of 1.3060, and currently, this level is expected to serve as a resistance for the GBP/USD. On the downside, the GBP/USD can exhibit further selling until the next target level of 1.2940.

The RSI and MACD have now crossed over 50 and 0 zone, suggesting odds of a bullish reversal in the GBP/USD pair. Consider staying bullish above 1.2995 and bearish below 1.3100 today. 

USD/JPY – Daily Analysis

The USD/JPY fell to 109.48. This morning, official data showed that Japan’s jobless rate dropped to 2.2% in November (2.4% expected and in October), while industrial production slid 0.9% on the month (-1.0% expected). Also, retail sales grew 4.5% (+5.0% expected).

The Bank of Japan Governor Haruhiko Kuroda said on Thursday that the central bank would ease its monetary policy further without hesitation if the momentum toward its 2% inflation goal came under threat.

He also offered a brighter view of the global economic outlook and said that the Bank of Japan would not rush to change its current policy for now. After a week after Central bank kept its short term rates target at -0.1% and long-term at 0%, Kuroda said that the trend of Japan’s economy was at moderate growth.

However, the easing of global trade tensions has reduced the chances that the central bank would ease its monetary policy further. Reduction in uncertainties over the US-China trade war has played an essential role in facilitating global economic conditions.

Daily Support and Resistance

  • S3 108.56
  • S2 108.97
  • S1 109.17

Pivot Point 109.38

  • R1 109.58
  • R2 109.8
  • R3 110.21

USD/JPY – Trading Tips

The USD/JPY has already completed the 38.2% Fibonacci retracement around 109.200 level. Now, this level is supporting the safe-haven pair along with an immediate resistance around 109.350. 

The RSI and MACD are suggesting chances of further selling in the USD/JPY pair. The pair may trade bearish below 109.50 to target 109.200 and even below to 108.950 today. 

All the best!


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