Today, the United States is celebrating Martin Luther King Jr. Day, the American market is closed and financial markets are subdued. The U.S. Dollar is showing strength against a basket of major currencies, mainly due to an upbeat stock market and easing in trade tensions. Over the weekend, geo-political tensions in Libya and Iraq caused a disruption in oil output, Brent spiked up to $66 a barrel, now trading around $65.20 and WTI came close to $60 a barrel, now trading around $58.81.
Tomorrow, at 10:00 am GMT the German and Eurozone ZEW Economic sentiment for the next 6 months will be released. The forecast is positive. Members of the ECB foresee stabilization in the economy in 2020 and the European Central Bank members will meet on Thursday for a monetary policy meeting during which they will launch a yearlong re-think process to evaluate Eurozone inflation target that was last set in 2003.
EUR/USD on a Daily TF continues to trade bearish for the 3rd consecutive day. The price moved below the 48EMA, currently trading around 1.10852 slightly above the 61.8% Fibo.
Technically: The price is below 13 and 48 EMA, while the 13EMA is pointing down. The Parabolic SAR is pointing down as well. The MACD is increasing in a bearish direction. We have what looks like a head and shoulders pattern on the daily time frame. It seems that the neckline has been breached down, conservative traders may wait till the price moves below 61.8% Fibo to enter short positions.
Resistance: R1 50% Fibo 1.11102, R2 38.2% Fibo 1.11407, R3 23.6% Fibo 1.11784.
Support: S1 1.10575, S2 1.10266, S3 1.09891.
GBP/USD on the Daily TF is trading flat with its 48EMA, currently around 1.29990. The British pound is being weighed down by weak macroeconomic data, including Fridays sluggish retail sales which fueled the BoE doves. Hard Brexit fears are also a burden for the Sterling as the trade agreement between the UK and EU will be in the spotlight throughout this year as we monitor negotiations before the end of the transition deadline in December 2020. Tomorrow, at 9:30 am GMT, pay attention to UK employment figures. Weaker than expected data will be hard on the GBP, as chances of a rate cut become even more imminent.
Technically: the price is using the 48EMA as resistance, Parabolic SAR pointing down, Bearish MACD histogram is increasing.
Resistance: R1 1.30500, R2 50% Fibo 1.31675, R3 1.33327.
Support: S1 38.2% Fibo 1.28821, S2 1.28020, S3 1.27.
USD/JPY on a Daily TF has gained approximately 2.18% since its rally began on January 6th. The price, however, reached a solid level of resistance where the action stagnated. Tomorrow morning at 3:00 am GMT, the Bank of Japan will make their interest rate decision, we want to pay attention to the statement, although BoJ Governor Haruhiko Kuroda recently mentioned that consumer inflation should increase towards 2%, while the BoJ remains ready for further easing if necessary.
Technically: The Parabolic SAR is pointing up, the MACD is bullish but the histogram is not increasing, both 13 and 48 EMA are pointing up. It’s possible that we are due for a minor correction before resuming the uptrend. The price is currently around 110.195.
Resistance: R1 110.681, R2 111.069, R3 111.376.
Support: S1 109.900, S2 109.624, S3 109.362.