Fundamental Analysis Report 15 Feb 2021

Feb 15, 2021

EUR/USD: Flat Dynamics 

Current Trend: EUR is showing flat dynamics against USD during today’s Asian session, testing 1.2130 for a breakout again. Investors expect new drivers to emerge on the market after updating local highs on EUR last week, but the picture remains the same so far. Market participants are concerned about the pace of economic recovery in the eurozone after the coronavirus epidemic, fearing that the current quarantine restrictions could slow this process, especially compared to the pace of growth of the US economy. 

Some support for the instrument at the beginning of the week is provided by the macroeconomic data from the US published on Friday. Michigan Consumer Sentiment Index in February fell from 79 to 76.2 points with the forecast of growth to 80.8 points. Today, traders focus on statistics from the eurozone on the dynamics of industrial production and the trade balance for December. 

Support And Resistance:

In the D1 chart, Bollinger Bands are reversing horizontally. The price range is slightly changing, being spacious enough for the current activity level in the market. MACD indicator is growing preserving a stable buy signal (located above the signal line). The indicator is also trying to consolidate above the zero level. Stochastic, having slightly retreated from its highs, reversed into a horizontal plane, reacting to the ambiguous trading dynamics at the end of last week.

 To open new positions, it is necessary to wait for the trade signals to become clear.

 Resistance levels: 1.2150, 1.2200, 1.2234, 1.2271.

Support levels: 1.2087, 1.2052, 1.2000, 1.1951.

 Trading Tips:

To open long positions, one can rely on the breakout of 1.2150. Take-profit – 1.2234. Stop-loss – 1.2110. Implementation time: 2-3 days.

 The return of “bearish” trend with the breakdown of 1.2087 may become a signal for new sales with the target at 1.2000. Stop-loss – 1.2125.


NZD/USD: Growth Against The Positive Data

 Current Trend: Today, during the Asian session, the NZD/USD pair is actively growing, approaching its local highs, renewed at the beginning of last week. The instrument is taking advantage of USD weakness, as well as closed US markets due to the national holiday.

 The rate is additionally supported by the positive macroeconomic statistics from New Zealand, published at the end of the last trading week. Thus, the index of business activity in the manufacturing sector of New Zealand in January rose from 48.7 to 57.5 points, which was significantly better than the negative market forecasts of a decrease in the index to 48.2 points. The food price index rose by 1.3% MoM for January after rising by only 0.1% MoM for December. Analysts’ forecasts assumed growth of the indicator by only 0.3% MoM.

 Support And Resistance: On the daily chart, Bollinger bands are moving flat. The price range expands uncertainly from above, letting the “bulls” renew local highs. The MACD indicator is growing, maintaining a strong buy signal (the histogram is above the signal line). After a short decline, Stochastic reversed upwards. The indicator is near its highs, indicating that the instrument may become overbought in the ultra-short term.

 It is better to keep the current long positions until the signals from technical indicators are clarified.

 Resistance levels: 0.7266, 0.7300, 0.7350, 0.7400.

Support levels: 0.7233, 0.7200, 0.7150, 0.7100.

 Trading Tips:

Long positions may be opened after the breakout of 0.7266 with the target at 0.7350. Stop loss – 0.7220. Implementation period: 2–3 days.

 Short positions may be opened after the rebound from 0.7266 and the breakdown of 0.7233 with the target at 0.7150. Stop loss – 0.7275.


USD/JPY: USD Is Strengthening

 Current Trend: USD has shown strong gains against JPY during today’s Asian session, once again trying to consolidate above 105.00.

 The focus is on macroeconomic statistics from Japan, which was encouraging for Japanese investors, but still did not lead to a change in the trading direction in the short term. Annual data on Japan’s GDP reflected the country’s economic growth in Q4 2020 by 12.7% YoY after increasing by 22.7% YoY in the previous period. Experts expected a slowdown in GDP to +9.5% YoY. In quarterly terms, the economy slowed down from +5.3% QoQ to +3% QoQ, which was also better than market expectations at +2.3% QoQ. Industrial production dynamics slightly improved from –3.2% YoY to –2.6% YoY, with market neutral forecasts.

 Support And Resistance:

Bollinger Bands in D1 chart show stable growth. The price range is narrowing, reflecting the ambiguous nature of trading in the short/middle term. MACD indicator reverses to growth while forming a new buy signal (the histogram is about to consolidate above the signal line). Stochastic is actively recovering from its lows, indicating the prospects for the development of corrective growth of the instrument in the ultra-short term.

 Current showings of the indicators do not contradict the development of the uptrend in the short term.

 Resistance levels: 105.17, 105.33, 105.60, 105.79.

Support levels: 104.75, 104.50, 104.20, 103.90.

 Trading Tips:

To open long positions, one can rely on the breakout of 105.17. Take-profit – 105.60–105.79. Stop-loss – 104.85. Implementation time: 1-2 days.

 A rebound from 105.17 as from resistance, followed by a breakdown of 104.75 may become a signal for new sales with the target at 104.20. Stop-loss – 105.00.