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Technical Analysis
19 January 2021
Trading spotlight
Every day we analyse the market trends, select the most newsworthy asset, and prepare technical analysis on it—to help you reduce risks and get prepared.
- All
- EURUSD
- GBPUSD
- USDJPY
Keep EURUSD in sight
What happened earlier
The EURUSD pair declined to 1.20621 before rebounding. On Monday, the U.S. dollar strengthened for a third consecutive day, reaching a four-week high. The administration of outgoing President Donald Trump has opposed the strengthening of the dollar for many years, but Janet Yellen, Biden's choice to head the U.S. Treasury, is not expected to seek a weakened dollar, reports The Wall Street Journal.
What the picture is now
The Bollinger Bands are spread widely, foretelling increased volatility, and bullish sentiment. The RSI, which is above 50, points to an uptrend while the Stochastic, which is in the overbought zone, indicates a possible correction downwards.
What the possible outcomes are
- In our most likely scenario, the EURUSD pair may rise towards the first resistance level of 1.21334 before declining towards the middle line of Bolinger indicator.
- If the pair manages to surpass the first resistance level, we should expect a continued surge towards the second resistance level of 1.21808.
- Contrarily, the pair may initially decline towards the first support level of 1.20621 before rebounding towards the first resistance level.
- If the pair falls below the first support level, we can expect a further decrease to the second support level of 1.20231.
Pay attention to GBPUSD
What happened earlier
The GBPUSD fell to 1.35408 before sharply rebounding towards 1.36050, demonstrating high volatility. The U.S. dollar strengthened in conjunction with the upcoming inauguration of Joe Biden. Onlookers expect his speech to clarify the plan for the next government in combating the coronavirus.
What the picture is now
The Bollinger Bands are wide open, which means increased volatility and bullish sentiment. The Stochastic shows a possible downwards correction, while the RSI, which is above 50, points to an uptrend.
What the possible outcomes are
- In our most likely scenario, the GBPUSD pair may attempt to break the first resistance level of 1.36050 before declining towards the middle line of the Bollinger indicator.
- If the pair manages to surpass the first resistance level, we should expect a continued surge towards the second resistance level of 1.36613.
- Conversely, it's possible to see the pair fail to break the first resistance level and regress towards the first support level of 1.35408.
- If the pair falls below the first support level, we can expect a further decline to the second support level of 1.34924.
Stay aware of the USDJPY movement
What happened earlier
The USDJPY broke through 103.905 due to the U.S. dollar edging to a one-month high across the market. After the dollar's sell-off last year, the first weeks of 2021 were a reversal for the greenback, thanks to rising U.S. Treasury yields. However, analysts remain wary of the dollar's short-term outlook.
What the picture is now
The Bollinger Bands are spread widely, which means increased volatility. The RSI, which is above 50, points to an uptrend while the Stochastic, which is in the overbought zone, indicates a possible downwards correction.
What the possible outcomes are
- In our most likely scenario, the USDJPY pair may rise towards the first resistance level of 104.159 before declining towards the first support level of 103.905.
- If the pair manages to surpass the first resistance level, we should expect a continued surge towards the second resistance level of 104.322.
- Contrarily, the pair may initially decline towards the first support level before rebounding towards the upper line of Bollinger indicator.
- If the pair falls below the first support level, we can expect a continued downtrend towards the second support level of 103.696.
Please note! This is not a direct instruction on which order to open. When applying this information, you remain solely responsible for the decision you make and financial risks you take.