Intraday Forex Thursday, January 7 (EURUSD, USDJPY, etc.) The dollar declines after Democrats won control of both houses of U.S. Congress.


Hi everyone. This observation is made around 5:30 UTC today, with 30 minutes time frames. The Resistance and Support Line were constructed according to Fibonacci retrenchment. Any discussion is welcomed.

Stocks in Asia-Pacific perked up on Thursday following runoff elections that gave the Democratic party control of both houses of U.S. Congress. Expectations for a large fiscal stimulus package in the U.S. in early 2021 are now pushing markets higher. Oil steady after U.S. Capitol drama, hovering near a 10-month high. The minutes of the Dec 15-16 FOMC meeting were dollar-neutral.

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  • The euro was mostly flat at $1.2320, after climbing to $1.2349 overnight for the first time since April 2018.​
  • Traders watched close over the results from Georgia recount. Democrats wins likely will have more freedom to set policy and that likely means more fiscal easing, which would lift risk sentiment and weigh on the dollar.​
  • Overnight U.S. economic data was mixed for the dollar. On the negative side, the Dec ADP employment change fell, showing a weaker labor market. Also, the Dec Markit services PMI was revised downward. On the positive side, Nov factory orders rose stronger than expectations.​
  • Moderna Inc's vaccine is seen as a big boost for European hopes of containing the coronavirus after been approved for inoculation from the European Medicines Authority (EMA) and the European Commission.​
Important Levels to Watch for:​
  • Resistance line of 1.23700 and 1.24037.​
  • Support line of 1.22643 and 1.22317.​

  • USD/JPY on Thursday posted moderate gains, adding 0.11% to 103.125 yen, after dipping to 102.594 on Wednesday for the first time since March.​
  • USD/JPY moves were capped on some safe haven buying of the yen after the U.S. Capitol building was forced into lockdown when protestors stormed the building.​
  • The run-off election that made a ‘blue sweep’ also negative for dollar, as it may leads to more fiscal easing by the government.​
  • The yen weakened on concern that Japan may tighten and extend lockdowns to contain the pandemic spread.​
Important Levels to Watch for Today:​
  • Resistance line of 103.551 and 103.889.​
  • Support line of 102.459 and 102.121.​

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