Daily Market Analysis By FXOpen

EUR/USD Could Start Fresh Increase, USD/CHF Shows Bearish Signs


EUR/USD remained well bid above 1.2120 and it is currently rising. USD/CHF is declining and it might continue to move down towards the 0.8820 support zone.

Important Takeaways for EUR/USD and USD/CHF

• The Euro declined heavily from 1.2350, but it found support near 1.2130 against the US Dollar.
• There was a break above a major bearish trend line with resistance near 1.2200 on the hourly chart of EUR/USD.
• USD/CHF formed a short-term top near 0.8920 and recently corrected lower.
• There was a break below a key bullish trend line with support near 0.8888 on the hourly chart.

EUR/USD Technical Analysis

After a steady increase, the Euro faced a strong resistance near the 1.2350 zone against the US Dollar. The EUR/USD pair formed a swing high at 1.2344 and started a strong decline.

It broke many key supports near 1.2240 and 1.2220. There was also a break below the 1.2180 support level and the 50 hourly simple moving average. Finally, the pair found support above 1.2130. A low is formed near 1.2133 on FXOpen and the pair is currently rising.


It broke the 1.2180 resistance level and the 50 hourly simple moving average. There was a break above the 23.6% Fib retracement level of the downward move from the 1.2344 high to 1.2133 low.

There was also a break above a major bearish trend line with resistance near 1.2200 on the hourly chart of EUR/USD. The pair is now trading above the 1.2200 level. An initial resistance is near the 1.2222 level. The first major resistance is near the 1.2240 level.

The 50% Fib retracement level of the downward move from the 1.2344 high to 1.2133 low is also near 1.2240 level. Therefore, a break above 1.2240 could accelerate upsides towards 1.2300.

If not, the pair could start a fresh decline from 1.2240. An initial support is near the 1.2185 level. The next major support is near the 1.2170 level. Any more losses could lead the pair towards the 1.2100 zone.

USD/CHF Technical Analysis

The US Dollar followed a strong bullish path above the 0.8850 level against the Swiss franc. The USD/CHF pair even broke the 0.8900 level, but it struggled to clear the 0.8920 zone.

A high was formed near 0.8920 before the pair started a downside correction. There was a break below the 0.8900 support level and the 50 hourly simple moving average to open the doors for a major correction.


There was also a break below a key bullish trend line with support near 0.8888 on the hourly chart. The pair broke the 50% Fib retracement level of the upward move from the 0.8822 swing low to 0.8920 high.

The pair could continue to move down towards the 0.8845 support. It is close to the 76.4% Fib retracement level of the upward move from the 0.8822 swing low to 0.8920 high. Any more losses might call for a test of the 0.8820 support.

On the upside, an initial resistance is near the 0.8870 level. The main resistance is forming near the 0.8890 level and the 50 hourly simple moving average.

A close above the 0.8880 and 0.8890 levels could open the doors for another steady increase above 0.8900 in the near term.

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Gold Price Prepares for Next Move, Oil Price Holds Strong


Gold price started a fresh decline and settled below $1,880. Conversely, crude oil price gained bullish momentum and it traded to a new multi-month high close to $54.00.

Important Takeaways for Gold and Oil

• Gold price started a fresh decline below the $1,900 and $1,880 support levels against the US Dollar.
• There is a key contracting triangle forming with resistance near $1,855 on the hourly chart of gold.
• Crude oil price surged above the $50.00 resistance and it even climbed towards $54.00.
• There was a break above a declining channel with resistance near $53.00 on the hourly chart of XTI/USD.

Gold Price Technical Analysis

Gold price failed to clear the $1,960 resistance level, and started a fresh decline against the US Dollar. The price broke the $1,900 and $1,880 support levels to move into a bearish zone.

The price followed a bearish path below the $1,850 level and settled below the 50 hourly simple moving average. It traded as low as $1,815 on FXOpen and recently started a short-term upside correction.


There was a break above the $1,825 and $1,830 levels. The price recovered above the 23.6% Fib retracement level of the downward move from the $1,959 swing high to $1,815 low. However, the price is facing hurdles near $1,855 and $1,860.

There is also a key contracting triangle forming with resistance near $1,855 on the hourly chart of gold. A clear break above the triangle resistance could open the doors for a move towards the $1,880 resistance.

The next resistance could be near the 50% Fib retracement level of the downward move from the $1,959 swing high to $1,815 low at $1,887.

Conversely, the price could break the triangle support and continue lower below the $1,840 level. The first key support is near the $1,825 level. The next major support is at $1,815, below which the price might even dive below the $1,800 support level.

Oil Price Technical Analysis

Crude oil price started a strong rise after it broke the $50.00 resistance zone against the US Dollar. The price gained bullish momentum and it even surpassed the $52.00 level.

The bulls remained in action, resulting in a clear break above $52.50. Recently, there was a break above a declining channel with resistance near $53.00 on the hourly chart of XTI/USD. The price traded to a new multi-month high close to $54.00 and settled above the 50 hourly simple moving average.


The recent high was formed near $53.85 and the price is currently correcting lower. It is testing the $53.50 level, which is close to the 23.6% Fib retracement level of the recent wave from the $52.27 swing low to $53.85 high.

If there are more downsides, the price could test the $53.20 support and the 50 hourly simple moving average. The next major support is near the 50% Fib retracement level of the recent wave from the $52.27 swing low to $53.85 high.

Any more losses could lead the price towards the $52.60 support zone. On the upside, the $53.85 and $54.00 levels are initial hurdles. A clear break above $54.00 may possibly lead the price towards the $55.00 level in the near term.


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GBP/USD and GBP/JPY: British Pound Could Correct Lower


GBP/USD gained strength above 1.3600, but it struggled to continue higher above 1.3700. GBP/JPY also corrected lower after forming a short-term top near 142.25.

Important Takeaways for GBP/USD and GBP/JPY

• The British Pound tested the 1.3700 resistance zone before correcting lower.
• There was a break below an ascending channel with support near 1.3638 on the hourly chart of GBP/USD.
• GBP/JPY also corrected lower from 142.25 and declined below 141.50.
• There was a break below a major bullish trend line with support near 141.20 on the hourly chart.

GBP/USD Technical Analysis

This past week, the British Pound saw a steady increase above the 1.3550 resistance against the US Dollar. The GBP/USD pair even broke the 1.3600 resistance zone to move further into a positive zone.

The pair climbed above the 1.3650 and 1.3680 resistance levels, but it struggled to gain momentum above 1.3700. A high was formed near 1.3710 on FXOpen and the pair recently started a downside correction.


There was a break below the 1.3650 and 1.3620 support levels. There was also a close below the 1.3620 level and the 50 hourly simple moving average. Moreover, there was a break below an ascending channel with support near 1.3638 on the hourly chart of GBP/USD.

The pair traded as low as 1.3565 and it is currently consolidating losses. An initial resistance on the upside is near the 1.3600 zone. It is close to the 23.6% Fib retracement level of the recent decline from the 1.3710 high to 1.3565 low.

The first key resistance is forming near the 1.3620 level. The next major resistance is near the 1.3640 level and the 50 hourly simple moving average. It is close to the 50% Fib retracement level of the recent decline from the 1.3710 high to 1.3565 low.

If there is an upside break above 1.3620 and 1.3640, GBP/USD could easily drift towards the 1.3700 zone. On the downside, the 1.3565 level is a decent support. If there is a downside break below the recent low, the pair could continue to move down towards the 1.3500 support level in the near term.

GBP/JPY Technical Analysis

The British Pound formed a short-term top near the 142.25 before it started a downside correction against the Japanese Yen. The GBP/JPY pair traded below the 141.80 support level to start the recent decline.

There was a clear break below the 141.50 support level and the 50 hourly simple moving average. There was also a break below a major bullish trend line with support near 141.20 on the hourly chart. The pair cleared the 50% Fib retracement level of the upward move from the 140.34 low to 142.25 high.


It is now trading well below the 141.20 level. It is testing the 76.4% Fib retracement level of the upward move from the 140.34 low to 142.25 high.

The next major support is near the 140.60 level, below which the pair could dive towards the 140.00 support zone in the coming sessions. On the upside, the previous support near 141.30 might act as a resistance.

The first major resistance is near the 141.50 level and the 50 hourly simple moving average. If GBP/JPY climbs above 141.30 and 141.50, it could revisit the 142.25 zone in the coming sessions.

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Important Week for Global Policy Rates


The week ahead of us is critical for the currency market. On Wednesday, we have the inauguration day in the United States, as Joe Biden will officially become the new President. The Biden’s administration economic agenda is based on three pillars – fiscal stimulus, infrastructure spending, bringing back the Obamacare program – and the markets will closely monitor the developments in these three areas.

One day later, FX traders have the first major central bank meeting of the year, as the European Central Bank (ECB) announces its decision this coming Thursday. The central bank made it clear that the Euro is too high and that the higher EURUSD exchange rate weighs on inflation, but that did not stop the EURUSD rate from reaching 1.23.

In the meantime, the exchange rate eased from the highs, trading below 1.21 – is this the start of a new cycle for the EURUSD pair?


Fed vs. ECB

The pandemic caught the ECB already having the interest rate in negative territory. In the aftermath of the European sovereign crisis in 2012, the ECB lowered the deposit facility below zero, where it still is at present. As such, the central bank was forced to use other unconventional tools to ease the policy during the pandemic.

So did the Fed. But the Fed opted to avoid negative rates and to focus more on stimulating the business environment by printing huge amounts of new dollars. In 2020 alone, the Fed printed over 30% of all the dollars ever created. Yet, this did not translate into inflation, although it is too early to tell at this point if inflation will be a theme in the years ahead.

The Fed’s actions sent the dollar lower, and the ECB and other central banks had little or no power to stop the dollar’s decline. As such, the Euro and the other G10 currencies, all appreciated against the dollar.

Now that the crisis is adverted, as suggested by the available vaccines and the vaccination programs around the world, the market may choose to revert the dollar decline theme seen during the pandemic. If that is the case, this week, we should see the first signs of a trend change.

Global policy rates are close to zero and are expected to remain so for the foreseeable future. Only in 2023 and beyond the major central banks are forecasted to lift the rates. However, even then, the ECB’s deposit facility rate is predicted to remain below zero.

Therefore, judging by the interest rate differential that exists and will keep existing in the years ahead, the market may see a sharp reversal in the EURUSD exchange rate.

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BTC and XRP – Prices continue to rise


BTC/USD

The price of Bitcoin has been moving sideways since last week as it came up to $40,000 area but then fell to $33,813 at its lowest point yesterday. This occurred after recovery and now we are seeing another minor one with the price reaching $37,486. Currently, it is being traded slightly lower but is still in an upward trajectory.


Looking at the 4 hour chart, you can see that the price made it slightly below the 0.382 Fib level on Sunday’s low but managed to pull back up above it. This could indicate that support has been found but we are still yet to see if it manages to exceed the local high at the 0.618 Fib level.

The primary scenario is one in which we are seeing an ABC correction of a higher degree and so far this has played out. The downfall below the 0.5 Fibonacci level has confirmed the previously assumed ABC to the upside which is the B wave from the higher degree count.

This is why from here we would be expecting the continuation to the downside, but that might not come as expected. The C wave which was projected to the downside should have been developing a five-wave impulse but has instead made a three-wave decrease followed by a recovery.

Now if the price continues increasing this count might get invalidated but this would potentially still be the part of the correctional count which is set to push the price lower.

XRP/USD

The price of Ripple has been increasing and came up by 13.87% from its yesterday’s low at $0.2714 to $0.309 where it is now being traded.


On the 4-hour chart, you can see that the price broke out from the descending triangle on the upside after the third interaction with the horizontal support level was made. As the price found support there we have seen a bounce that led the price for a breakout and a higher high was made compared to the previous local one.

This could be the start of the 5th wave from the five-wave impulse that started in December last year after the price made the end of the significant downside move. The price hasn’t made it inside the territory of the 1st wave which makes this scenario valid and now if we are seeing the development of the 5th wave it is set to push the price of Ripple higher then on the 7th of January where the ending point of the 3rd wave is.

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EUR/USD Recovering Losses, USD/JPY Remains At Risk


EUR/USD started a downside correction from well above 1.2300 and recently found support near 1.2055. USD/JPY is showing bearish signs and it could decline heavily below 103.50.

Important Takeaways for EUR/USD and USD/JPY

• The Euro remained well bid above 1.2050 and started a fresh increase.
• There was a break above a major bearish trend line with resistance near 1.2120 on the hourly chart of EUR/USD.
• USD/JPY is declining and showing bearish signs below the 104.00 resistance.
• There is a key bearish trend line forming with resistance near 103.98 on the hourly chart.

EUR/USD Technical Analysis

In the past few days, there was a steady decline in the Euro from well above 1.2200 against the US Dollar. The EUR/USD pair even broke the 1.2120 support level, but it remained well bid above 1.2050.

A low was formed near 1.2053 on FXOpen before the pair is currently recovering losses. There was a break above the 1.2100 resistance level and the 50 hourly simple moving average, opening the doors for a steady increase.


There was also a break above a major bearish trend line with resistance near 1.2120 on the hourly chart of EUR/USD. The pair even broke the 50% Fib retracement level of the downward move from the 1.2222 swing high to 1.2053 low.

An immediate resistance is near the 1.2058 level. It is close to the 61.8% Fib retracement level of the downward move from the 1.2222 swing high to 1.2053 low. The main resistance is near the 1.2175, above which EUR/USD is likely to accelerate higher.

Conversely, the pair could start a fresh decline below the 1.2135 support. The first major support is near the 1.2115 zone. If there is a downside break below the 1.2115 support zone, the pair could continue to move down. In the stated case, there are high chances of a retest of the 1.2053 swing low in the near term.

USD/JPY Technical Analysis

The US Dollar seems to be trading in a broad range below the 104.20 and 104.50 resistance levels against the Japanese Yen. The USD/JPY pair formed a high near 104.08, and recently started a fresh decline.

There was a break below the 103.85 support level the 50 hourly simple moving average. The pair also declined below the 50% Fib retracement level of the upward move from the 103.63 low to 104.08 high.


It is now trading near a key support at 103.75. It is close to the 76.4% Fib retracement level of the upward move from the 103.63 low to 104.08 high. If there is a downside break below the 103.75 level, the pair could move towards the main 103.50 support zone.

The stated 103.50 support holds the key, below which the pair could decline heavily in the near term. On the upside, the first major resistance is near the 103.85 level.

There is also a key bearish trend line forming with resistance near 103.98 on the hourly chart. A clear break above the trend line is must for a steady increase.

The next key resistance could be near 104.20, above which USD/JPY could revisit 104.50. Any more gains may possibly increase the chances of a test of the 105.00 level in the near term.

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Litecoin and EOS – Bears are in control


LTC/USD

The price of Litecoin has been in a decline since Tuesday when it was sitting at $166.11 and made a downfall to $130 level today, which was a decrease of 21.74%. Now the price is being traded slightly higher but is still in a downward trajectory.


Looking at the hourly chart, you can see that the price made a breakout below the ascending channel that formed since the 11th of January when the price fell to the $112.33 area. From there a recovery was made all the way up above the $160 level but now another impulsive descending move has been seen which is most likely the continuation of the corrective decrease. If this is the three-wave corrective decline from the 10th of January the move to the downside would be expected to continue and surpass the prior low at $112 and could potentially continue all the way down to $82.9.

However, there is a possibility that this is going to be a triangle formation of the higher degree in which this three-wave move could be its first sub-wave. In that case, the price could make another significant recovery before this move to the $82.9 horizontal level. The price has found support at 0.236 Fib level at least a temporary one, so now we are going to see what happens as if it manages to stay up the recovery might come.

EOS/USD

From its Tuesday’s high at $2.926 the price of EOS has decreased by 12.18% as it came down to $2.579 at its lowest wick today. Now the price is looking like it has stabilized above the $2.62 level and is establishing support.


On the hourly chart, you can see that the price has made a breakout from the ascending channel like in the case of Litecoin but the pattern isn’t as similar as the price of EOS made a more significant decrease from the 10th of January till the 11th then it has now since Tuesday. We have seen a decrease of over 37% till the 11th of January and if this descending move is the continuation of that move, the price could be expected to go significantly lower. But another round of hard-selling like it occurred then isn’t likely to play out.

More likely we are going to see a further decrease to some of the horizontal support levels out of which the first one in line would be the 11th January low, but the next one is just below the $2 mark. The price could make another impulsive move to the vicinity of the lower horizontal level, but like in the case of Litecoin that might not come in a straight line.

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AUD/USD and NZD/USD Approaching Next Key Break


AUD/USD is trading well above 0.7700, but is facing hurdles near 0.7780 and 0.7800. NZD/USD is also showing positive signs, but there is a crucial resistance forming near 0.7225-0.7240.

Important Takeaways for AUD/USD and NZD/USD

• The Aussie Dollar started a fresh increase above the 0.7720 resistance levels against the US Dollar.
• There is a major contracting triangle forming with support near 0.7740 on the hourly chart of AUD/USD.
• NZD/USD also climbed higher, but it is facing a strong resistance near 0.7225 and 0.7240.
• A key bullish trend line is forming with support near 0.7185 on the hourly chart of NZD/USD.

AUD/USD Technical Analysis

After forming a support base near 0.7660, the Aussie Dollar started a fresh increase against the US Dollar. The AUD/USD pair broke the 0.7700 resistance level to move into a positive zone.

The pair even broke the 0.7720 resistance and settled above the 50 hourly simple moving average. A high is formed near 0.7782 on FXOpen and the pair is currently correcting lower.


There was a break below the 0.7760 support level. The pair even traded below the 50% Fib retracement level of the upward move from the 0.7720 swing low to 0.7782 high. It is now testing the 0.7745 support level and the 50 hourly simple moving average.

There is also a major contracting triangle forming with support near 0.7740 on the hourly chart of AUD/USD. The triangle support is close to the 61.8% Fib retracement level of the upward move from the 0.7720 swing low to 0.7782 high.

If there is a downside break below the triangle support, there is a risk of more losses. The next major support on the downside is near the 0.7720 level.

On the upside, the 0.7770 level is an immediate resistance. A clear break above the 0.7770 and 0.7780 levels may possibly open the doors for a larger increase towards 0.7800 and 0.7840 in the coming sessions.

NZD/USD Technical Analysis

The New Zealand Dollar also followed a similar path above the 0.7120 support against the US Dollar. The NZD/USD pair broke the 0.7200 resistance to move back into a positive zone.

However, the pair is facing a strong resistance near the 0.7225 and 0.7240 levels. A high is formed near 0.7225 and the pair is currently correcting lower. It traded below the 0.7200 level, but it is well above the 50 hourly simple moving average.


It is trading just below the 50% Fib retracement level of the upward move from the 0.7177 swing low to 0.7225 high. On the downside, there is a key bullish trend line forming with support near 0.7185 on the hourly chart of NZD/USD.

The trend line is close to the 76.4% Fib retracement level of the upward move from the 0.7177 swing low to 0.7225 high. If there is a downside break below the trend line support, there is a risk of more losses towards the 0.7150 and 0.7120 support levels.

Conversely, the pair could remain well bid above the 0.7180 support zone. On the upside, the 0.7225 and 0.7240 levels are crucial hurdles. A clear break and close above the 0.7240 level could set the pace for a strong increase towards the 0.7300 level.

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GBP/USD and EUR/GBP: British Pound Remains Strong



GBP/USD extended its rise above the 1.3680 and 1.3700 resistance levels. EUR/GBP is correcting lower and it is approaching a major support near 0.8875.

Important Takeaways for GBP/USD and EUR/GBP

• The British Pound remained well bid above 1.3600 and it climbed above 1.3680.
• There is a key contracting triangle forming with resistance near 1.3715 on the hourly chart of GBP/USD.
• EUR/GBP started a fresh decline after it failed to clear the main 0.8920 resistance zone.
• Earlier, there was a break above a short-term bearish trend line with resistance near 0.0.8860 on the hourly chart.

GBP/USD Technical Analysis

After forming a base above the 1.3500 and 1.3520, there was a fresh increase in the British Pound against the US Dollar. The GBP/USD pair broke the 1.3580 and 1.3600 resistance levels to move into a positive zone.

The pair gained momentum above 1.3600 and it even spiked above the 1.3680 resistance. There was also a break above the 1.3700 zone and the pair settled above the 50 hourly simple moving average.

A new multi-month high was formed near 1.3746 on FXOpen before the pair started a downside correction. It traded below the 1.3680 support level and the 50 hourly simple moving average, but the bulls protected the 1.3640 level.


A low is formed near 1.3636 and the pair is currently rising. It is trading above the 1.3680 level, the 50 hourly simple moving average, and the 50% Fib retracement level of the downward move from the 1.3746 high to 1.3636 low.

It seems like there is a key contracting triangle forming with resistance near 1.3715 on the hourly chart of GBP/USD. An immediate resistance is near the 1.3700 zone or the 61.8% Fib retracement level of the downward move from the 1.3746 high to 1.3636 low.

A successful break above the 1.3700 and 1.3715 levels could open the doors for a new high above the 1.3746 in the near term. Conversely, the pair could break the triangle support and continue lower towards the main 1.3620 support level.

EUR/GBP Technical Analysis

The Euro started a fresh increase from the 0.8830 low against the British Pound. The EUR/GBP pair broke the 0.8850 and 0.8860 resistance levels to move into a positive zone.

There was also a break above a short-term bearish trend line with resistance near 0.0.8860 on the hourly chart. The pair surged above the 0.8900 level, but it struggled to clear a major hurdle near the 0.8920 zone.


A high is formed near 0.8918 and the pair is currently declining. It broke the 0.8900 level and tested the 38.2% Fib retracement level of the upward move from the 0.8830 swing low to 0.8918 high.

On the downside, there is a major support waiting near the 0.8875 level and the 50 hourly simple moving average. It is also close to the 50% Fib retracement level of the upward move from the 0.8830 swing low to 0.8918 high.

Any more losses could lead the pair towards the 0.8850 support level in the near term. Conversely, the pair could start a fresh increase from the 0.8875 support zone.

On the upside, the 0.8900 level is a short-term resistance for the Euro bulls. However, the main hurdle is still near 0.8920, above which EUR/GBP could rally towards the 0.9000 resistance.

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Decisive Week for the Dollar as the Fed’s Meeting Looms Large



Financial markets started the new year on the same note as the previous year ended – higher stocks, lower dollar. The extent of the advance in the stock market, or the decline in the dollar, led many market participants to wonder if the Fed’s monetary policy did not lead to financial bubbles?

After all, a survey shows that over 25% of the market participants still believe that Bitcoin will double from the current levels. Or, 18% believe that the price of Tesla will double over the next twelve months. That is, in the context of Bitcoin already rising from $10,000 to $40,000 in the last months and Tesla already being up over 650% in 2020.



Will the Dollar Weakness Stop?

To many, the weakness in the dollar is responsible for such extreme price action. If we are to see a change in the trend, as suggested by the 56% of the market participants that expect a higher dollar against Bitcoin for the next twelve months, then the risk may come from Wednesday Fed’s decision.

On Wednesday, the Fed is expected to keep the monetary policy unchanged – the federal funds rate at the lower boundary and the QE program running at $120 billion/month. However, this week, the focus will shift from the FOMC Statement to the Fed’s press conference.

More precisely, it will be more important what the Fed thinks about the future economic outlook. In the face of the rapid pace of vaccinations (i.e., the United States already vaccinated 6% of its population), the risk is that the Fed will deliver a slightly hawkish outlook for the future economic recovery. If that is the case, the dollar may turn in the expectation of the future tapering of the quantitative easing program.

Last week the ECB delivered a slightly hawkish statement too. It said that it may or may not use the full envelope of the PEPP program, despite the fact that many European countries face the worse of the pandemic right now.

As such, one should not discount a hawkish Fed too. If that happens, the USD will make a U-turn because the reflation trade that went on for months now seems to be extremely stretched.

As we saw in 2020, the dollar’s direction matters for the equity markets and other markets too. For stocks to remain close to all-time highs, the correlation with the dollar must break.

Will we see such a divergence on Wednesday? Or will the reflation trade continue after the Fed’s first meeting of the year?

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