The EUR/USD currency pair

• Prev Open: 1.2155
• Prev Close: 1.2151
• % chg. over the last day: -0.03%

EUR/USD on Thursday showed weakness against the dollar, despite the decrease in greenback across the entire spectrum of the market. The European currency is under pressure in anticipation of new restrictions related to the worsening epidemiological situation. France will extend curfews across the country. German Chancellor Angela Merkel, meanwhile, plans to tighten quarantine in the country. Indeed, there is mounting evidence that the pandemic is picking up steam again.

• Support levels: 1.2222, 1.2283
• Resistance levels: 1.2130, 1.2059

The main scenario for trading EUR/USD is trading in a sideways range between 1.2222 and 1.2130. The 1.2130 level remained the key support, as there was only an intraday puncture followed by a northern bounce. It is necessary to wait for the fixation. Otherwise, the situation will be similar to the “spring” model, in which a false puncture leads to a reversal. In this case, without consolidation below 1.2130, a northern reversal is likely.

Alternative scenario: if the price manages to consolidate below the level of 1.2130, the pair may continue to move towards 1.2059. A break of 1.2222 will bring the pair back to 1.2283 or higher.

• – 16:30 (GMT+2) US Retail Sales Baseline (MoM).

The GBP/USD currency pair

• Prev Open: 1.3635
• Prev Close: 1.3684
• % chg. over the last day: +0.36%

Sterling continued to rise on Thursday, however, bullish potential is at a low level. Bearish signals appear gradually. The growth, caused by the comments of the Governor of the Bank of England, is not confirmed by the credit market. Gilts earnings continued to decline and returned below 0.30%, while US Treasuries stabilized near 1.10%.

• Support levels: 1.3532, 1.3428
• Resistance levels: 1.3702, 1.4386

The main scenario in GBP/USD is selling. Earlier this week, sterling showed its second touchdown at 1.3702, the January high. On Thursday, there was a false puncture without fixing above this level. The situation is beginning to indicate strong resistance in this area, and a “double top” pattern has formed on the chart. ADX, when declining in the Asian session, began to react with growth, indicating the presence of bears.

Alternative scenario: if the pair consolidates above 1.3702, growth is likely to continue.

• – 10:00 (GMT+2) UK GDP (m/m);
• – 10:00 (GMT+2) UK Manufacturing Output (MoM) (Nov).

The USD/JPY currency pair

• Prev Open: 103.87
• Prev Close: 103.78
• % chg. over the last day: -0.08%

On Thursday, the dollar-yen showed a decline following the credit and equity markets. The announcement of a $1.9 trillion economic bailout package from Joe Biden did not inspire investors. The stock market is showing signs of correction more and more, which in turn casts doubt on the growth of the dollar-yen.

• Support levels: 103.53, 103.18
• Resistance levels: 104.40, 104.76

The main scenario is trading in a sideways range. ADX did not react to the last downside impulse, which indicates the weakness of the bears. The price has consolidated below the moving averages, which indicates a high probability of a breakdown of the lower border. However, until that happens, the pair could trade in a range between 104.40 and 103.53.

An alternative scenario assumes the price fixing above 104.40. In this case, the pair may return to growth up to 104.76 – 105.68. Breakdown of 103.53 will indicate renewed bearish sentiment.

• – 16:30 (GMT+2) US Retail Sales Baseline (MoM).

The USD/CAD currency pair

• Prev Open: 1.2693
• Prev Close: 1.2636
• % chg. over the last day: -0.45%

On Thursday, the pair accelerated its decline and reached the lows of early January. Oil quotes continue to rise, which in turn puts pressure on the pair. The slight decline in the dollar index helped to increase the pressure on the price.

• Support levels: 1.2630, 1.2523
• Resistance levels: 1.2797, 1.2875

The main scenario is range trading. Despite the rapid decline on Thursday, the ADX barely reacted. But the growth in the Asian session is perceived by the oscillator as legitimate. However, other indicators are fully positioned in a southern direction. MACD has shown convergence, which is usually a strong signal for continuation. Since the price was able to stop at a strong support level, the overall result is neutral.

Alternative scenario: if the price can gain a foothold above 1.2718, the pair may return to 1.2797. A breakdown at 1.2630 will indicate further decline.