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Daily Market Analysis By FXOpen


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LTC and EOS – Establishing support before new highs
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LTC/USD

The price of Litecoin has been increasing since last week and came up from $124.2 at its lowest point on Saturday to $170 at its highest on Monday. This week has started with a pullback to $147.2 but the price is back on the same levels as on Monday.
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Looking at the hourly chart, you can see that the price made an interaction with the horizontal resistance found at the $170 level and fell back to its ascending trendline. As it found support there again it is currently making another breakout attempt.

If the price makes a higher high and continued moving past the $170 level it would serve as an early indication that the price is going to continue its bullish trajectory past the upper ascending trendline as well.

But if it fails to do so we might be seeing the completion of the higher degree ending diagonal which formed on the 24th of December. If this is the case then the currently seeing breakout attempt might end as a slightly higher high just making an interaction with the upper ascending trendline before we see a downturn.

However, currently, there are more signs of bullishness than bearishness which is why the uptrend continuation looks more likely.

EOS/USD

From the start of January when the price of EOS was sitting at $2.55 we have seen an increase of 35.68% measured to its highest point at $3.4617 made yesterday. Since then the price made a minor pullback to $3.11 but is now back above $3.315 again.
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On the hourly chart, you can see that the price action made a cup and handle formation since the 20th of December and has now made a higher high compared to the one then. We are now seeing the formation of the handle pattern which is set to consolidate the price and establish support before it can move to the upside again.

From the start of the year, the price has moved parabolically to the upside so its upward trajectory would be expected to continue, but not before it makes a revisiting to the zone below $3.27. It could continue to its more significant horizontal zone at around $2.9 but that doesn’t look as likely considering the bullish momentum seen. More likely we are to see another spike to the downside like we have from yesterday’s high potentially coming to the $3 mark which is both a psychological level and the local horizontal support.

After this, a further upside would be expected for the price of EOS in the same impulsive manner as it did from the start of the new year. The next significant price point would be at $3.84 where the price made the previous high on November 25th.

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Gold Price Trims Gains While Oil Price Turns Bullish Above $50
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Gold price started a downside correction after surging towards $1,960. Conversely, crude oil price is following a strong bullish path and it settled above $50.00.

Important Takeaways for Gold and Oil

  • Gold price started a fresh increase towards $1,950-$1,960 and recently corrected lower against the US Dollar.
  • There was a break below a major bullish trend line with support near $1,920 on the hourly chart of gold.
  • Crude oil price surged above the $48.00 resistance and it even broke the $50.00 barrier.
  • There is a key rising channel forming with support near $50.60 on the hourly chart of XTI/USD.

Gold Price Technical Analysis

Gold price started a fresh increase above the $1,910 resistance level against the US Dollar. The price broke the $1,925 and $1,950 resistance levels to move into a positive zone.

The price even traded close to the $1,960 before it faced sellers. A swing high was formed near $1,959 on FXOpen before the price started a downside correction. There was a sharp decline below the $1,950 and $1,940 levels.
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During the decline, there was a break below a major bullish trend line with support near $1,920 on the hourly chart of gold. The price traded below the 50% Fib retracement level of the upward move from the $1,872 swing low to $1,959 high.

It even settled below the $1,920 level and the 50 hourly simple moving average. It seems like the price is approaching the $1,905 and $1,900 support levels. The 61.8% Fib retracement level of the upward move from the $1,872 swing low to $1,959 high might also provide support.

Any more losses could lead the price towards the $1,880 support level. Conversely, the price could attempt a fresh increase above the $1,915 and $1,920 resistance levels.

A successful close above the $1,920 and the 50 hourly simple moving average could open the doors for a decent increase in the coming sessions. The next major resistance is near the $1,950 level.

Oil Price Technical Analysis

Crude oil price started a steady rise after it broke the key $48.00 resistance zone against the US Dollar. The price broke many hurdles near $50.00 to move further into a positive zone.

The price even broke the $51.00 level and settled above the 50 hourly simple moving average. It traded to a new multi-month high near $51.26 before starting a downside correction. It declined towards $50.50 level and it is currently rising.
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There was a break above the $50.80 resistance. The price recovered above the 50% Fib retracement level of the recent decline from the $51.26 high to $50.43 low.

It is now trading above the 76.4% Fib retracement level of the recent decline from the $51.26 high to $50.43 low. Therefore, there are high chances of a break above the $51.20 and $51.50 resistance levels in the coming sessions.

On the downside, an initial support is near the $50.80 level. There is also a key rising channel forming with support near $50.60 on the hourly chart of XTI/USD.

If there is a downside break below the channel support trend line, the price could decline towards the $50.00 support level. The next major support sits near the $49.55 level.

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GBP/USD Could Decline Further, USD/CAD Is Eyeing Upside Break
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GBP/USD started a fresh decline after it failed to clear the 1.3700 resistance. USD/CAD is rising and it is currently eyeing an upside break above 1.2750.

Important Takeaways for GBP/USD and USD/CAD

  • The British Pound started a major downside correction from well above 1.3650.
  • There is a major bearish trend line forming with resistance near 1.3610 on the hourly chart of GBP/USD.
  • USD/CAD started a fresh increase after forming a support base near the 1.2660 level.
  • There was a break above a key bearish trend line with resistance at 1.2700 on the hourly chart.

GBP/USD Technical Analysis

After a decent increase, the British Pound faced resistance near 1.3680-1.3700 against the US Dollar. As a result, the GBP/USD pair started a fresh decline and broke a couple of important supports near 1.3650.

The pair gained bearish momentum below the 1.3600 level and the 50 hourly simple moving average. It even broke a major support zone at 1.3540 to move into a bearish zone. It traded as low as 1.3496 on FXOpen, and the pair is currently consolidating losses.
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An initial resistance on the upside is near the 1.3525 level. It is close to the 23.6% Fib retracement level of the recent decline from the 1.3635 high to 1.3496 low.

The first major resistance is near the 1.3540 level (the recent breakdown zone). The next resistance is near the 1.3565 zone and the 50 hourly simple moving average. It is also close to the 50% Fib retracement level of the recent decline from the 1.3635 high to 1.3496 low.

Finally, there is a major bearish trend line forming with resistance near 1.3610 on the hourly chart of GBP/USD. Clearly, the pair is likely to face many hurdles if it starts an upside correction from the recent low of 1.3496.

On the downside, the first key support is near the 1.2500 area. The next major support is near the 1.3470 level, below which there is a risk of a sharp decline.

USD/CAD Technical Analysis

The US Dollar traded as low as 1.3629 before starting a decent upward move against the Canadian Dollar. The USD/CAD pair broke the 1.3650 and 1.3665 resistance levels to move into a short-term bullish zone.

The pair gained pace above the 1.3700 level and the 50 hourly simple moving average. Moreover, there was a break above a key bearish trend line with resistance at 1.2700 on the hourly chart.
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The pair even broke 1.2720, and climbed above the 50% Fib retracement level of the downward move from the 1.2797 high to 1.2629 swing low. It is now attempting an upside break above another bearish trend line with resistance at 1.2750 on the same chart.

The next key resistance is near the 1.2760 level. It is close to the 76.4% Fib retracement level of the downward move from the 1.2797 high to 1.2629 swing low.

A clear break above the 1.2750 and 1.2760 resistance levels may possibly increase the chances of a strong upward move in the coming sessions. The next key resistance sits at 1.2800.

Conversely, USD/CAD might start another decline if it fails near 1.2750. An initial support is near the 1.2700 level and the 50 hourly SMA. The main support seems to be forming near 1.2665.


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The USD Reverses Course as the NFP Misses Expectations
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Last week brought some troubling events in the United States, as protesters took the Capital by assault. Lives were lost, and the nation faces an identity crisis.

Shortly after the order was restored, President Trump recognized President-elect Biden’s victory and ensured people that there would be a peaceful transition of power on the 20th of the month when the new administration takes charge.

But it was too little too late. In the meantime, Twitter suspended the President’s account, and America is on a race to identify each and every one of the protesters.

As such, the economic data paled in the face of the political events. However, the USD did move, as it seems that it reversed course, easing from the highs.

What Did the NFP Show?

The NFP report released last Friday showed the data for the month of December 2020. The U.S. economy lost 140k jobs, much worse than the expectations of adding 60k.

Unsurprisingly, the leisure and hospitality sectors were responsible for most of the job losses, as the pandemic continues to take its toll. However, the November numbers were revised higher, and the unemployment rate remained stable, somehow diminishing the impact of the December report.

ISM Manufacturing Above 60

One of the most striking pieces of economic data released last week was the ISM Manufacturing. It climbed above 60, and most of the time, when it did so in the past, the dollar strengthened in the following one hundred days.

The thing is that all investment houses predict a lower dollar in 2021. Whenever such a consensus exists, the danger is that exactly the opposite happens.

So far, the dollar reflected the risk-on environment, as it moved hand in hand with the U.S. equities. As the new administration prepares to run America, the dollar may be in the grasp of a sharp reversal.

The EURUSD is already down two big figures from the highs, and AUDUSD and GBPUSD correct as well. If the dollar’s strength continues, the world risks being caught on the wrong side of the market, as most traders are positioned for a weak dollar.

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BTC and XRP – Has the correction ended?
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BTC/USD

From yesterday’s low at $30,340 the price of Bitcoin has increased by 20.71% as it came to $36,743 at its highest point today. Since then it has made a minor retracement and is currently sitting at around $35,340 and is in a downward trajectory.
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Looking at the hourly chart, you can see that the price increase that ended on Friday was the ending wave from the higher degree count. This is why now we are seeing the development of the five-wave descending move. As it might have ended the price would now be expected to recover but as this is most likely the beginning of the descending move from the downside we are to see the downtrend continuation after the recovery has been made.

If we are seeing the development of the ABC correction the price of Bitcoin could fall back to the $23,500 range before the correction ends. There could be a possibility that this would be a five-wave impulse rather than the ABC correction in which case the decrease could continue below $23,500.

In the short-term, we are expecting that the price establishes support around the $30,000 area before a recovery to $37,550 which would be the 0.618 Fib level.

XRP/USD

The price of Ripple has also been increasing and came up from $0.2575 at its lowest point yesterday to $0.308 at its highest today which was an increase of around 20%, but since today’s high made a pullback to the $0.29 area where is currently being traded.
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On the hourly chart, we can see that this increase was the formation of the first five-wave impulse to the upside after a sharp and steep decline from $0.36 which is a 26.7% decrease measured to yesterday’s low.  This decrease made from Sunday was made after the price broke out from the forming triangle in which it was consolidating and was retesting its horizontal resistance level on which the price came up at its prior high.

The downfall seen could be the corrective wave to the downside after which now we are seeing the next impulse to the upside forming. As a lower degree five-wave count has been completed it will now be seen if this is the start of the higher degree wave 5 or the corrective ABC before further downside movement. The price is now likely to make another five-wave move in either way to the upside from whose momentum we are to evaluate either possibilities.

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