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GBP/USD
Political uncertainty weighs on the pound​


Current trend
This week, the GBP/USD pair corrected down to 1.3570, but today it is trying to restore lost positions. In general, the British currency is influenced by a number of opposite factors.

The December data on inflation in the United Kingdom published today confirmed its further growth: the consumer price index rose from 5.1% to 5.4%, reaching its highest since 1992. The negative dynamics due to the increase in the cost of energy carriers should prompt the Bank of England to raise the interest rate again in early February, which, in turn, will serve as a catalyst for strengthening the pound. In addition, the UK has signs of a gradual exit from the coronavirus pandemic caused by the Omicron strain. The incidence in the country is gradually decreasing, which allows officials to announce the mitigation of existing quarantine measures as early as next week.

On the other hand, the growth of quotations is hindered by the problems of the national labor market and the intensifying political crisis, which now occupy significant attention of investors. According to November data, wage growth in the UK is slowing down and is seriously not keeping up with the increase in inflation, which may negatively affect consumption and the state of the economy as a whole. Meanwhile, investors are following the development of the situation in the country's parliament: Boris Johnson is getting closer to losing the post of prime minister due to the scandal caused by his presence at the event, while strict coronavirus restrictions were in effect on the territory of the United Kingdom. Members of the Conservative Party have already begun collecting parliamentary requests to begin the procedure for removing a politician from office.

Under these conditions, the US currency looks more stable and attractive for investment, as the market expects a cycle of interest rate hikes by the US Fed, the first of which may take place as early as March.

Support and resistance
The price of the GBP/USD pair has returned to the framework of the descending channel and is close to 1.3549 (Murray [7/8], middle line of Bollinger Bands). Its breakdown will give the prospect of further decline to the area of 1.3427 (Murray [6/8]). In case of a breakout of the level of 1.3672 (Murray [8/8]), the upward dynamics of the trading instrument will be able to continue to 1.3740 (January highs) and 1.3795 (Murray [+1/8]). The indicators do not give a single signal, confirming the uncertainty of the market: the Bollinger Bands are directed up, the Stochastic is directed down, while the MACD histogram is decreasing in the positive zone.

Resistance levels: 1.3672, 1.3740, 1.3795.
Support levels: 1.3549, 1.3427, 1.3305.​

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Key Releases


United States of America
The US currency is weakening today against its main competitors – the yen, the pound and the euro.

The published December data of the American labor market turned out to be positive: the number of construction permits issued increased from 1.717M to 1.873M, and the number of new homes whose construction has just begun increased from 1.678M to 1.702M. Today, the head of the White House, Joe Biden, is due to speak at a press conference on the occasion of the anniversary of his inauguration. He will inform citizens about his new legislative initiatives, as well as about further plans to combat the coronavirus pandemic.​


Eurozone
The European currency is strengthening against the USD, weakening against the pound and has ambiguous dynamics paired with the Japanese yen.

December data on the consumer price index in Germany were published today, which recorded an acceleration of inflation in the country. On a monthly basis, the index increased from -0.2% to 0.5%, and on an annual basis – from 5.2% to 5.3%. The pressure in the German and European economies as a whole continues to increase. In these circumstances, investors are turning their attention to the decisions of the European Central Bank (ECB), hoping that the regulator's officials will begin a more active fight against price increases following their colleagues from the Bank of England and the US Fed. However, the matter does not go beyond comments and hints yet. Last week, ECB Head Christine Lagarde said that inflation in the eurozone this year should decrease from the record high levels currently observed, and the agency is ready to take any measures necessary to reduce it to the target of 2.0%. The official's rhetoric was interpreted by some investors as a hint at the possibility of raising rates, but more specifically, the regulator's intention will be known only in early February, when the first meeting of the current year will take place. The head of the French central bank and ECB member Francois Villeroy de Galhau noted that France's economic growth has not slowed down from the rapid spread of the COVID-19 Omicron strain, but inflation in the eurozone's second-largest economy is still too high.​


United Kingdom
The British currency today is strengthening against its main competitors – the euro, the yen and the USD.

The December data on inflation in the United Kingdom published today confirmed its further growth: the consumer price index rose from 5.1% to 5.4%, reaching its highest since 1992. The negative dynamics due to the increase in the cost of energy carriers should prompt the Bank of England to raise the interest rate again in early February, which, in turn, will serve as a catalyst for strengthening the pound. In addition, the UK has signs of a gradual exit from the coronavirus pandemic caused by the Omicron strain. The incidence in the country is gradually decreasing, which allows officials to announce the mitigation of existing quarantine measures as early as next week. On the other hand, the growth of quotations is hindered by the problems of the national labor market and the intensifying political crisis, which now occupy significant attention of investors. According to November data, wage growth in the UK is slowing down and is seriously not keeping up with the increase in inflation, which may negatively affect consumption and the state of the economy as a whole. Meanwhile, investors are following the development of the situation in the country's parliament: Boris Johnson is getting closer to losing the post of prime minister due to the scandal caused by his presence at the event, while strict coronavirus restrictions were in effect on the territory of the United Kingdom. Members of the Conservative Party have already begun to collect parliamentary requests to begin the procedure for removing the politician from office, but he himself does not intend to resign.​


Japan
The Japanese currency is weakening against the pound, strengthening against the USD and has ambiguous dynamics paired with the euro.

Today, the Japanese government has extended emergency measures to the capital Tokyo and more than a dozen other regions of the country to stop the rapid spread of the COVID-19 Omicron strain. These measures will allow local authorities to limit the mobility of the population and business activity, reducing the opening hours of bars and restaurants and other establishments of mass attendance. So far, the incidence in Japan remains at high levels, and officials fear that the national health system may not be able to withstand the increased number of hospitalizations. Tomorrow, bidders expect the publication of data on foreign trade for December. It is predicted that the volume of imports of Japanese goods may slow down growth from 43.8% to 42.5%, and exports – from 20.5% to 16.0%. The implementation of forecasts may put pressure on the Japanese currency.​


Australia
The Australian currency is strengthening against its main competitors – the euro, the pound, the yen and the USD.

The Australian dollar shows an upward trend in trading, despite the negative January data on the consumer sentiment index from Westpac: the indicator decreased from -1.0% to -0.2%. Australian citizens fear the deterioration of the epidemic situation and the tightening of quarantine restrictions, but Australian Prime Minister Scott Morrison said that the government does not plan to introduce additional sanitary measures, even despite the surge in the incidence. Moreover, the official announced the cancellation of visa fees for students and people who want to get a job at local enterprises for the next 12 weeks. These measures should reduce the labor shortage created during the pandemic.​


Oil
Oil quotes are making moderate attempts to decline today.

The pressure on prices was exerted by statements from representatives of the International Energy Agency (IEA). Officials of the ministry noted that the supply of oil will soon exceed demand, as some producers may reach historical production peaks in Q1 2022. In particular, the department believes that the USA, Canada, Brazil, Saudi Arabia and Russia can seriously increase production. During the day, investors also expect the publication of a weekly report on the amount of oil reserves in the USA from the American Petroleum Institute (API). The last time the indicator decreased by 1.077M barrels, and the continuation of this trend may support oil quotes.​
 
AUD/USD, Elliot Wave Analysis

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The probability of the pair reduction remains.
On the daily chart, the development of the first wave of the higher level (1) of C has completed and a downward correction as wave (2) of C continues to be formed. At the moment, wave A of (2) has formed and wave B of (2) is developing, in which wave b of B is being formed. If the assumption is correct, after the completion of wave B of (2) the pair will continue to decline to the levels of 0.6742–0.6446. The level of 0.7616 is critical and stop-loss for this scenario.

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EUR/USD
Euro strengthens before the publication of inflation data​


Current trend
This week, the EUR/USD pair corrected to the 1.1320 area, but has now resumed growth and is testing the 1.1350 mark (Murray [2/8]). The euro is strengthening before the publication of December inflation statistics in the eurozone.

Earlier, German data had already recorded an acceleration in consumer price growth from 5.2% to 5.3%, and today's publications can confirm the continuation of negative dynamics in the EU, having adjusted from 4.9% to 5.0%. Investors expect that increased price pressure may become a driver for the European Central Bank (ECB) in taking active measures to adjust the parameters of monetary policy, up to an increase in interest rates. However, until now, the regulator's officials preferred to maintain a wait-and-see attitude. So, last week, the head of the department, Christine Lagarde, stated that the ECB is ready to take any measures necessary to reduce inflation to the target level of 2.0%, but today in an interview with France Inter radio station, she noted that the eurozone economy does not need such a sharp tightening of existing parameters, which the US Fed assumes, and inflation will decrease this year for natural reasons due to a weakening in energy prices and a reduction in supply disruptions. However, Christine Lagarde also stressed that, if necessary, the regulator is ready to intervene in the situation.

The USD is now seen as less attractive for investment than the euro, since the effect of the expected March increase in interest rates has already been largely taken into account by the market. It should be noted that previously the head of the White House Joe Biden expressed full agreement with the policy of the US Fed, saying that the reduction of economic incentives is quite appropriate, but the market did not react to these statements in any way. Investors are waiting for the publication of weekly data on the US labor market. In case of an increase in the number of applications for unemployment benefits and an increase in the number of people receiving benefits, the dollar may come under pressure.

Support and resistance
A breakout of 1.1350 and the middle line of the Bollinger Bands will give the prospect of growth to 1.1413 (Murray [3/8]) and 1.1474 (Murray [4/8]). The key for the "bears" is the level of 1.1290 (Murray [1/8]), the breakdown of which will provide further downward dynamics to 1.1230 (Murray [0/8]) and 1.1185 (November lows). The indicators do not give a single signal: the Bollinger Bands reverse up and the Stochastic reverses down, while the MACD histogram is stable in the positive zone.

Resistance levels: 1.1350, 1.1413, 1.1475.
Support levels: 1.1290, 1.1230, 1.1185.​

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ADA/USD
The growth before the launch of the SundaeSwap exchange turned out to be temporary


Current trend
Unlike most of the leading cryptocurrencies, ADA quotes showed upward trading dynamics and only after reaching eight-week highs around 1.6345 began to adjust downwards. Experts associate the strengthening of the token's position with the creation of the Pavia application on the Cardano blockchain, as well as with the launch of the SundaeSwap (DEX) platform.

Thus, Pavia's "metaverse" has already attracted 8.3K participants, but even more investor interest is directed to the decentralized exchange SundaeSwap, the beta version of which should be launched today. The currently available version of the platform will be incomplete, the developers have limited a number of functions in it and increased the transaction processing time, but investors will already begin to receive part of the charged commission for trading as a reward for supporting the project, which will be carried out in the form of distribution of their own SUNDAE exchange token.

The interest of market participants in ADA allowed to increase the daily volume of transactions in the Cardano network to 7B, which exceeded the same figure in the Ethereum network (5.4B), but nevertheless, the positive dynamics turned out to be temporary.

Support and resistance
Currently, the price of the ADA/USD pair has corrected to the middle line of the Bollinger Bands (1.3000). Its breakdown will give the prospect of further decline to the levels of 1.1718 (Murray [6/8]) and 1.0700 (January lows), otherwise the upward dynamics may resume to 1.5625 (Murray [8/8], Fibo retracement 23.6%), 1.7578 (Murray [+1/8]), 1.8350 (Fibo retracement 38.2%). Indicators do not give a single signal: the Bollinger Bands and Stochastic are directed downwards, the MACD histogram is at the zero line, its volumes are insignificant.

Resistance levels: 1.5625, 1.7578, 1.8350.
Support levels: 1.3000, 1.1718, 1.0700.​

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Gold, Elliot Wave Analysis


The pair may grow.
On the daily chart, the fifth wave of the higher level (5) develops, within which the first entry wave 1 of (5) formed, the correctional wave 2 of (5) developed, and the wave 3 of (5) forms. Now, the first wave of the lower level i of 3 is developing, within which a local correction has ended as the wave (iv) of i, and the fifth wave (v) of i is developing. If the assumption is correct, the pair will grow within the wave to the levels of 1919.90–2067.60. In this scenario, critical stop loss level is 1752.82.​
 

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USD/JPY, Elliot Wave Analysis


The pair may grow.
On the daily chart, the third wave of the higher level 3 of (1) develops, within which the first wave of the lower level i of 3 formed, a correction developed as the second wave ii of 3, and the third wave iii of 3 develops. Now, the third wave of the lower level (iii) of iii has formed, a local correction has ended as the wave (iv) of iii, and the fifth wave (v) of iii is developing. If the assumption is correct, the pair will grow to the levels of 118.00–120.60. In this scenario, critical stop loss level is 113.10.​
 

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McDonald’s Corp. Elliot Wave Analysis


The price may rise.
On the daily chart, the fifth wave of the higher level (5) is developing, as part of which the wave 3 of (5) continues forming. At the moment, the third wave of the lower level iii of 3 is developing, as part of which wave (iii) of iii is developing. If the assumption is correct, the price will rise in wave (iii) of iii to 280.00–295.00. The level of 244.07 is critical and stop-loss for this scenario.​

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GBP/USD
The pound is developing flat dynamics​


Current trend
The pound is traded in different directions against the US currency during the morning session, consolidating near 1.3600 and local lows from January 18.

The US dollar is actively recovering its positions at the end of the week; however, its growth is limited by not the most confident macroeconomic statistics from the US. Disappointing data came out the day before, reflecting an increase in the number of Initial Jobless Claims from 231K to 286K, while analysts expected a further decrease in the figure to 220K. The number of Continuing Jobless Claims for the week ended January 7 increased from 1.551M to 1.635M, which also turned out to be worse than preliminary market estimates at 1.58M.

Today, investors are waiting for the publication of December data on the dynamics of Retail Sales in the UK. Analysts' forecasts, however, do not promise any support for the pound, and therefore the corrective sentiment in the asset may develop further.​


Support and resistance
On the D1 chart, Bollinger Bands are reversing into a horizontal plane. The price range is narrowing, reflecting the appearance of mixed dynamics of trading in the short and ultra-short term. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic, having approached its lows, is trying to reverse into a horizontal plane, indicating risks of an oversold pound in the ultra-short term. Under these conditions, trading participants should look at the possibility of the appearance of corrective dynamics for the instrument in the nearest time intervals.

Resistance levels: 1.3650, 1.3700, 1.3750, 1.3800.
Support levels: 1.3600, 1.3550, 1.3500, 1.3460.​

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AUD/USD
The Australian dollar ends the week with flat dynamics​


Current trend
The Australian dollar, thanks to the active actions of the “bears”, is losing ground at the end of the current trading week, testing the level of 0.7200 for a breakdown. AUD/USD pair is losing ground and moving into the “red” zone, despite the fact that there are not many fundamental reasons for the growth of the American currency. The data released the day before from the US failed to support the “bullish” sentiment of investors in the US currency, neither within the data on Initial Jobless Claims, nor on the statistics of Existing Home Sales.

In turn, on Thursday, the Australian dollar managed to enlist fairly strong support from market participants after the publication of a strong report on the Australian labor market for December. The Employment Change increased by 64.8K jobs, which turned out to be significantly better than market expectations of 30K jobs. At the same time, the Unemployment Rate in the country in December fell to new record lows at around 4.2%, although analysts' forecasts suggested a decline from only 4.6% to 4.5%.

Support and resistance
On the daily chart, Bollinger Bands show flat dynamics. The price range remains virtually unchanged, remaining spacious enough for the current level of activity in the market. MACD is stretching into a line along the zero level, signaling an approximate balance of power between sellers and buyers in the short term. Stochastic is trying to reverse upwards, near the level of “20” and indicating the continuation of the “bullish” momentum since the middle of the week.

Resistance levels: 0.7250, 0.7300, 0.7328, 0.7369.
Support levels: 0.7200, 0.7160, 0.7128, 0.7100.
 

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