Technical Analytics Report

EUR/USD: Daily recommendations on major

 

ANALYSIS | EUR/USD – 1.2257

The single currency’s selloff from 1.2345 to as low as 1.2246 yesterday suggests Medium Term upmove has made a temporary top at Wednesday’s 2-1/2 year peak at 1.2349 and consolidation with downside bias remains for stronger retracement to 1.2210, however, 1.2180/90 should remain intact due to near term loss of momentum and yield a much-needed rebound later. 

On the upside, only above 1.2309 would indicate aforesaid pullback has ended instead and risk gain to 1.2325, then 1.2349 early next week. 

Data to be released on Friday:

Japan all household spending, coincident index, leading economic index.

Swiss unemployment rate, Germany industrial output, exports, imports, trade balance, current account, France consumer spending, current account, industrial output, trade balance, imports, exports, UK Halifax house prices, Italy unemployment rate, EU unemployment rate.

U.S. non-farm payrolls, private payrolls, unemployment rate, average earnings, wholesale inventories, wholesale sales, and Canada employment change, unemployment rate!

GBPUSD FORECAST AND NEWS

GBP/USD: Depressed around mid-1.3500s despite vaccine, stimulus hopes

GBP/USD remains pressured for third straight day, recapturing 1.3550 ahead of the London open. Treasury yields driven rebound in the US dollar weighs on cable. US NFP, virus updates and stimulus headlines will be key to watch.

GBP/USD remains pressured for third consecutive day, fades pullback from 1.3538 recently.

Jump in UK’s covid cases, hospitalizations attack PM Boris Johnson’s promise of vaccine near 10 miles from home.

Pfizer-BioNTech vaccine claims effectiveness against COVID-19 strains, US President Trump concedes defeat after broad criticism over Capitol Hill issue.

To combat the pessimism, UK PM Johnson said to have delivered almost 1.5 million vaccine jabs during the first day. The Tory leader also stated, “If all goes well, these together should have the capacity to deliver hundreds of thousands of vaccines per day by 15 January. 

Also playing negatively for the sterling is a nightmare that British Truckers are facing due to the Brexit deal and red-tape, per Bloomberg. Further, Daily Mail highlights pessimism among the British companies due to the Brexit deal while saying, “British companies give up on cross-Channel trade because of Brexit red tape. 

Alternatively, US President Donald Trump’s public acceptance of defeat and a likely impeachment eases the Democratic Party’s road to more stimulus after winning the Senate. Also favoring the mood could be the headlines from the market leader COVID-19 vaccine developer, Pfizer-BioNTech, suggesting their drug can tame recently found variants of the virus in the UK and South Africa. 

Amid these plays, stock futures from the US and the UK print mild gains while the US 10-year treasury yields jump to 2017 levels. 

Moving on, GBP/USD traders will wait for UK PM Johnson’s comments on virus and vaccine while also waiting for the US employment data for December. Although virus woes and disappointment from Brexit pressure the cable, overall optimism in the market may recall the buyers. US NFP, UK PM Johnson’s daily update, virus numbers and stimulus headlines will be the key to watch.

GBP/USD eases to 1.3557, down 0.08% intraday, while heading into the London open on Friday. The cable drops for the third day in a row even as UK PM Boris Johnson cheered vaccine hopes. The quote’s weakness also ignores upbeat market sentiment amid hopes of the US coronavirus (COVID-19) stimulus. The reason could be traced from the jump in the virus numbers and economic fears at a time when the Brexit deal failed to please Britons. Although the US Nonfarm Payrolls (NFP) will be important for the day, major attention will be given to the UK PM Johnson’s daily vaccine update and US stimulus headlines for fresh impulse.

 Early Friday, Sky News quoted Chief Executive of the National Health Services (NHS) England while saying, “Claims that hospitals are not under pressure from surging numbers of people suffering badly with coronavirus are a lie.” The news also mentioned, “Sir Simon had earlier outlined the current challenges facing the NHS in England, describing how there are now 50% more coronavirus patients in hospitals now than during the peak of the first wave of infections last April.”

Technical analysis

21-day SMA support of 1.3513 becomes imminent as the weekly falling trend line, at 1.3645 now, directs GBP/USD to the south. 

ADDITIONAL IMPORTANT LEVELS OVERVIEW

Today last price 1.356

Today Daily Change -6 pips

Today Daily Change % -0.04%

Today daily open 1.3566

TRENDS

Daily SMA20 1.3512

Daily SMA50 1.3356

Daily SMA100 1.3178

Daily SMA200 1.2876

LEVELS

Previous Daily High 1.3633

Previous Daily Low 1.3532

Previous Weekly High 1.3686

Previous Weekly Low 1.343

Previous Monthly High 1.3686

Previous Monthly Low 1.3134

Daily Fibonacci 38.2% 1.3571

Daily Fibonacci 61.8% 1.3595

Daily Pivot Point S1 1.3521

Daily Pivot Point S2 1.3476

Daily Pivot Point S3 1.342

Daily Pivot Point R1 1.3622

Daily Pivot Point R2 1.3678

Daily Pivot Point R3 1.3723

Gold Price Analysis: 

XAU/USD eyes $1900 amid T-yields rally, ahead of NFP – Confluence Detector

Gold (XAU/USD) continues to feel the pull of gravity and closes in on the critical $1900 support. The narrative of reflation trades plays out, driving Treasury yields higher on expectations of higher fiscal stimulus by the Biden administration. 

The Fed’s view on rising inflation expectations also backs the upside in the US rates, weighing on the yieldless gold. Higher yields could continue to support the US dollar’s rebound, as markets digest encouraging Pfizer’s coronavirus vaccine news.

All eyes now turn towards the US payrolls release for fresh direction on the yellow metal. How is gold positioned on the charts heading into the critical US jobs data. 

Gold Price Chart: Key resistances and supports

The Technical Confluences Indicator shows that gold is threatening strong support at $1908, which is a confluence of the previous month high and the previous day low. 

A breach of the last could expose the critical $1900 support zone, the intersection of the previous week high and Bollinger Band four-hour lower. 

Further south, the sellers could challenge the meeting point of the Fibonacci 23.6% one-week and SMA100 one-day at $1894. 

The last reprieve for the XAU bulls is seen at $1890, the Fibonacci 38.2% one-week, below which the upbeat momentum could be negated. 

On the flip side, $1911 poses an immediate resistance for gold, which is the pivot point one-week R1. 

The next relevant hurdle awaits around $1916/17 region, the confluence zone of the Fibonacci 38.2% one-day, SMA5 four-hour and the previous high on four-hour. 

The buyers will then target the pivot point one-week R2 at $1920. Acceptance above the latter could bring the $1925 back in play. 

That level is the convergence of the SMA5 one-day and pivot point one-day R1. 

Global Fundamental Analysis 08/01/2021 

Opening Call: The Australian share market is to open higher. 

U.S. stocks rose as the market forecasts Democratic control of Congress will lead to further U.S. stimulus. The yield on the 10-year Treasury rose to 1.08%. The WSJ Dollar Index climbed to 84.97. Oil continued higher. Gold prices rose slightly. 

Australian Market 

Australia’s S&P/ASX 200 gained 1.6% as the local share market largely mirrored that in the U.S., where cyclical gained and tech stocks dropped in anticipation of further stimulus and tax rises. The financial, materials and energy sectors led the gains. 

US Market

 Political unrest in Washington didn’t dent the stock market’s ongoing rally, with U.S. stocks climbing toward fresh records. 

Financial and technology stocks led Thursday’s gains, pushing the S&P 500 up 1.5% and putting the broad index on pace to close at its first record of 2021. The Dow Jones Industrial Average also rose, adding 0.7%, while the Nasdaq Composite jumped 2.6%, putting both of those benchmarks on track for new closing highs as well. 

Investors largely looked past Wednesday’s violent clash between pro-Trump protesters and law enforcement in the Capitol building that left four people dead, instead of focusing on what the shift of political power from Republicans to Democrats means for the market. 

Commodities

 Gold futures scored a partial rebound, day after rising U.S. bond yields prompted the metal, which doesn’t offer a coupon, to post its first loss in six sessions. 

Commodity dealers are betting that the longer-term outlook for gold is higher, with a Democratically controlled Congress likely to champion greater government spending to reflate the economy which is bullish for gold prices. 

February gold rose 0.3% to settle at $1,913.60 an ounce. 

Oil Futures

 Oil futures rose to post a third straight session gain, buoyed by data showing a larger-than-expected weekly drop in U.S. crude inventories and a recent pledge by Saudi Arabia to further cut its production levels. 

West Texas Intermediate crude for February delivery rose 0.4% to settle at $50.83 a barrel on the New York Mercantile Exchange. March Brent crude, the global benchmark, added nearly 0.2%, settling at $54.38 a barrel on ICE Futures Europe. 

Forex

 Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.2325 to lows near US$1.2245 and was near US$1.2260 in late US trade. The Aussie dollar fell from highs near US77.95 cents to lows near US77.25 cents and was near US77.65 cents in late US trade. And the Japanese yen eased from near 103.10 yen per US dollar to near JPY103.95 and was near JPY103.83 in late US trade. 

European Markets

 European sharemarkets were firmer on Thursday. Construction and materials stocks posted the biggest gains (up 2.3%) on the prospect for more infrastructure spending in the US under a new administration. Mining rose 2.8% with energy up 1.8%. The pan-European STOXX 600 index rose by 0.5%. The UK FTSE lifted by 0.2% while the German Dax index rose by 0.6%. In London trade shares in Rio Tinto rose by 3.2% and shares in BHP gained 1.0%.

 Asian Markets

 Earlier Thursday, mainland China stocks continued the rally that started with the new year, with the large-cap benchmark CSI 300 Index closing at its highest level since early The CSI 300 Index which tracks the largest stocks listed in Shanghai and Shenzhen rose 1.8%. Meanwhile, the Shanghai Composite Index advanced for the sixth consecutive session, rising 0.7%. Tourism firms and suppliers of non-ferrous metals stood out in the session.

 Hong Kong’s Hang Seng Index closed 0.5% lower, mainly weighed by tech stocks. China’s three major telecom companies tumbled after the NYSE reversed course again and said it would move to delist their ADRs.

 The Nikkei Stock Average rose 1.6%, led by gains in steel and financial stocks, on growing hopes for additional U.S. pandemic relief and infrastructure investments.


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