Jan-10, 2022 EUR/USD, GBP/JPY, USD/CAD currency trading analysis, By Forex Forum.
On Monday, the British pound plunges against the safe-haven Japanese yen, on a risk-off market mood, spurred by expectations of higher rates in the US and worldwide inflationary pressures.
The GBP/JPY pair is upward biased.
The daily moving averages (DMAs) reside below the spot price, but the high reached on January 5 at 157.76, short of October 20, 2021, daily high at 158.22, exposed the pair to downward pressure, leaving it at the mercy of the market mood.
To the upside, the first resistance level would be the 200-hour simple moving average (SMA) at 156.20. A decisive break above that level would expose the S2 daily pivot at 156.47, followed by the S1 daily pivot at 156.76.
On the downside, the first support would be the psychological 156.00 figure which almost intersects with the S3 daily pivot at 155.97. A breach of the latter would expose the January 4 daily low at 155.34. and then the January 3 daily low at 154.90.
Moreover, The GBP/USD pair plunges at the time of writing as the Dollar Index has managed to rebound and recover after its last sell-off. It remains to see what will happen as the currency pair is almost to reach strong near-term support levels.
The bias is still bullish despite the current sell-off. The price action printed a potential bearish reversal pattern, but the formation is far from being confirmed, that's why I'm still looking for longs.
As you already know, the GBP/USD pair rallied on Friday as the US Non-Farm Employment Change was reported at 199K in December versus 426K expected.
On the other hand, U.S. Dollar Moves Higher Against Canadian DollarUSD/CAD is currently trying to settle above the resistance at 1.2680 while U.S. dollar is gaining ground against a broad basket of currencies.
The U.S. Dollar Index has recently failed to settle above the resistance at 96.25 and pulled back towards the 96 level. In case the U.S. Dollar Index declines below this level, it will move towards the support at 95.75 which will be bearish for USD/CAD.
In case USD to CAD settles above the 50 EMA, it will move towards the next resistance level which is located at the 20 EMA at 1.2730. A successful test of the resistance at the 20 EMA will push USD to CAD towards the next resistance level at 1.2760.
On the support side, the nearest support for USD to CAD is located at 1.2650. If USD to CAD moves back below this level, it will head towards the support at 1.2625. A move below this support level will open the way to the test of the support at 1.2590.
Elsewhere, Euro turns softer in a quiet Asian session together with Swiss Franc, but Yen is even weaker.On the other hand, Aussie is ticking up slightly together with Loonie and Dollar. Overall, trading is rather subdued with major Asian stock indexes treading water in tight range, and Japan is on holiday. Focuses will turn to Fed chair Jerome Powell's testimony, and US inflation data later in the week, which should bring the markets back to life.
Technically, we'll keep an eye on Sterling. EUR/GBP is staying bearish, and it looks ready to resume the medium term down trend through 0.8333 temporary low any time. GBP/JPY is also still on track to retest 158.19 resistance, and resume larger up trend. Meanwhile, if GBP/USD could build up more momentum above 1.3570 support turned resistance, that would solidify the case of near term bullish reversal for 1.3833 resistance next.
For getting latest currency trading news, updates and forecast join this forex forum.
You can learn more about forex trading at forum.forex
This is the forex forum for beginners and professional currency market traders. Discuss and share forex trading tactics, currency pairs, tips and forex market data. Analyze forex brokers, leverage and fx signals providers.