EUR/USD Daily Forecast – Another Test Of The Support At 1.2130

EUR/USD Video 15.01.21.

Euro Remains Under Pressure

EUR/USD continues its attempts to settle below the nearest support level at 1.2130 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to stay above the nearest support level at the 20 EMA at 90.20 and is moving towards the resistance at 90.50. A move above this level will push the U.S. Dollar Index towards the next resistance at 90.70 which will be bearish for EUR/USD.

Yesterday, U.S. President-elect Joe Biden proposed a new stimulus package which is worth $1.9 trillion and includes $1,400 stimulus checks. The foreign exchange market has mostly ignored the announcement as traders expected a stimulus package of this size.

Comments from the Fed Chair Jerome Powell drew more attention as he stated that the Fed was not ready to make any changes to its monthly bond purchases. U.S. Treasury yields pulled back after these comments, but declining yields did not hurt the U.S. dollar which continued its attempts to rebound against a broad basket of currencies.

Today, traders will have a chance to take a look at U.S. Retail Sales data for December which is expected to show that Retail Sales were unchanged on a month-over-month basis. Meanwhile, U.S. Industrial Production is projected to grow by 0.5% month-over-month while U.S. Manufacturing Production is also expected to increase by 0.5%.

Technical Analysis

eur usd january 15 2021

EUR/USD is currently trying to settle below the nearest support level at 1.2130. If this attempt is successful, EUR/USD will get to the test of the 50 EMA level which is located at 1.2120.

A move below the 50 EMA will push EUR/USD towards the next support at 1.2080. If EUR/USD declines below this level, it will head towards the support level at 1.2060.

On the upside, the nearest resistance level for EUR/USD is located at 1.2155. If EUR/USD gets above this level, it will head towards the resistance at 1.2175. A successful test of the resistance at 1.2175 will open the way to the test of the next resistance level which is located at the 20 EMA at 1.2195.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – Resistance At 1.3710 Stays Strong

GBP/USD Video 15.01.21.

British Pound Pulls Back Ahead Of The Weekend

GBP/USD faced strong resistance at 1.3710 and pulled back closer to the support at 1.3665 while the U.S. dollar gained some ground against a broad basket of currencies.

The U.S. Dollar Index received support at the 20 EMA at 90.20 and is slowly moving towards the resistance level at 90.50. If the U.S. Dollar Index gets to the test of the resistance at 90.50, GBP/USD will find itself under pressure.

Yesterday, U.S. President-elect Joe Biden proposed a stimulus package worth $1.9 trillion which included $1,400 stimulus checks. The foreign exchange market reacted calmly as previous reports suggested that the new stimulus aid would be in the $1.5 trillion – $2 trillion range.

The recent Initial Jobless Claims report highlighted the need for additional stimulus as 965,000 Americans filed for unemployment benefits in a week.

Today, traders will have a chance to take a look at Industrial Production and Manufacturing Production reports for November from the UK. Industrial production is expected to grow by 0.5% month-over-month while Manufacturing Production is projected to increase by 0.9%.

Later, traders’ focus will shift to Retail Sales data from the U.S. Accoring to the analyst consensus, Retail Sales remained unchanged in December. On a year-over-year basis, Retail Sales are forecasted to grow by 3.6%.

Technical Analysis

gbp usd january 15 2021

GBP/USD did not manage to settle above the resistance at 1.3710 and pulled back towards the nearest support level at 1.3665.

In case GBP/USD declines below the support at 1.3665, it will move towards the next support level at 1.3625. This support level has been tested several times in recent trading sessions and proved its strength.

If GBP/USD settles below 1.3625, it will continue its downside move and head towards the next support level at the 20 EMA at 1.3575.

On the upside, GBP/USD needs to get above the resistance at 1.3710 to continue its upside move. The next resistance level for GBP/USD is located at 1.3755. If GBP/USD manages to get above this level, it will head towards the resistance at 1.3785.

For a look at all of today’s economic events, check out our economic calendar.

USD/CAD Daily Forecast – Support At 1.2625 In Sight

USD/CAD Video 14.01.21.

Canadian Dollar Gains Ground Against U.S. Dollar

USD/CAD managed to get below the support at 1.2665 and is moving towards the next support level at 1.2625 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to settle above the resistance at 90.50 but failed to develop sufficient upside momentum and declined closer to the nearest support level at the 20 EMA at 90.20. If the U.S. Dollar Index settles below the 20 EMA, it will move towards the 90 level which will be bearish for USD/CAD.

Today, the U.S. reported that Initial Jobless Claims increased to 965,000 while Continuing Jobless Claims grew to 5.27 million. The reports highlighted the need for another round of stimulus. Recent reports suggested that Joe Biden will soon present a stimulus plan worth $1.5 billion – $2 billion.

It remains to be seen whether the new stimulus plan will put additional pressure on the U.S. dollar as money-printing may push U.S. government bond yields higher, providing some support to the American currency on the foreign exchange market.

Technical Analysis

usd cad january 14 2021

USD to CAD gained strong downside momentum and is trying to get to the test of the support level which is located near January lows at 1.2625. RSI is still in the moderate territory so there is plenty of room to gain additional momentum in case the right catalysts emerge.

In case USD to CAD manages to settle below the support at 1.2625, it will move towards the next support level at 1.2590. A successful test of the support at 1.2590 will open the way to the test of the support at 1.2550. I’d note that USD to CAD has not visited this territory for several years so it remains to be seen whether previous levels will be relevant for today’s trading.

On the upside, the previous support at 1.2665 will likely serve as the first resistance level for USD to CAD. If USD to CAD gets back above this level, it will head towards the next resistance at 1.2700.

A move above 1.2700 will push USD to CAD towards the resistance at 1.2720. In case USD to CAD settles above 1.2720, it will head towards the 20 EMA at 1.2740.

For a look at all of today’s economic events, check out our economic calendar.

Oil Pulls Back As Traders Wait For Additional Catalysts

Oil Video 14.01.21.

EIA Decreases Its Oil Demand Forecast

EIA has recently published its January Short-Term Energy Outlook and forecasted that global oil consumption will reach an average of 97.8 million barrels per day (bpd) in 2021. The previous forecast implied that consumption would total 98 million bpd.

EIA noted that the forecast was dependent on the success of the mass vaccination program in the world. Mass vaccination did not start smoothly in developed countries while many developing countries have yet to receive vaccines so the risks are shifted to the downside.

The negative impact of the current virus containment measures in Europe is yet be seen. At this point, it looks like European countries will have to implement various measures for the full first quarter, but Saudi Arabia’s production cut should be able to provide enough support for the market during this period.

Interestingly, EIA expects that Brent oil price will average $53 in 2021 while WTI oil will trade at a discount of $3 to Brent. Currently, the front-month WTI contract trades firmly above the $52 level although longer-dated contracts trade closer to the $50 level which is in line with EIA expectations.

It remains to be seen whether traders will focus on such predictions or bet on the continuation of the current rally which is fueled by Saudi Arabia’s production cut and declining inventories.

Demand For Gasoline Remains Soft At The Beginning Of The Year

According to EIA data, gasoline demand increased from 7.44 million bpd in the previous week to 7.53 million bpd. A year ago, gasoline demand stood at 8.56 million bpd so current demand is about 1 million bpd lower compared to previous year’s levels.

In the upcoming trading sessions, the market will likely focus on Biden’s stimulus plan which may provide additional support to gasoline demand. If the gap between current demand and pre-pandemic demand starts to decrease, oil may get additional support.

At the same time, the recent Initial Jobless Claims report suggested that the job market was under strong pressure from the second wave of the virus which may serve as a negative factor for demand in the near term.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Silver Remains Stuck Between 50 EMA And 20 EMA

Silver Video 14.01.21.

Stronger Dollar Did Not Put Much Pressure On Silver

Silver  made an attempt to settle below the 50 EMA at $25.20 but did not manage to gain sufficient downside momentum while the U.S. dollar gained ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the nearest resistance level at 90.50. If this test is successful, the U.S. Dollar Index will head towards the next resistance level at 90.70 which will be bearish for silver and and gold price today.

Meanwhile, gold is trying to get back above the $1850 level after an unsuccessful attempt to breach the support at $1830. If gold manages to settle above $1850, it will move towards the next resistance level at $1865 which will be bullish for silver.

Gold/silver ratio continues its attempts to settle below the nearest support level at the 20 EMA at 72.75. If gold/silver ratio manages to settle below this level, it will move towards the 72 level which will provide support to silver.

Traders will also focus on Biden’s stimulus plan which is set to be unveiled today. Additional stimulus is bullish for markets but it remains to be seen whether safe-haven assets like silver and gold will benefit from another round of money-printing or investors will continue to choose riskier assets which were in demand in recent trading sessions.

Technical Analysis

silver january 14 2021

Silver failed to develop additional downside momentum below the support level at the 50 EMA at $25.20 and remains stuck in the range between the 50 EMA and the 20 EMA at $25.75.

In this light, the technical situation has not changed materially compared to the previous trading session. If silver settles below the 50 EMA, it will gain downside momentum and quickly get to the test of the next support level at $25.00. A successful test of this level will open the way to the test of the support at $24.70.

On the upside, silver needs to get above the resistance at $25.55 in order to gain additional upside momentum and get to the test of the next resistance at the 20 EMA at $25.75. If silver manages to settle above the 20 EMA, it will head towards the resistance at $26.30.

For a look at all of today’s economic events, check out our economic calendar.

Stocks Move Higher As Traders Focus On Biden’s Stimulus Plan

President-Elect Joe Biden Will Present His Stimulus Plan On Thursday

S&P 500 futures are gaining ground in premarket trading as traders wait for details of the new stimulus plan which is expected to be presented today.

Recent reports suggested that Joe Biden would present a stimulus plan worth $1.5 trillion – $2 trillion which would include $1,400 stimulus checks. Additional stimulus is bullish for stocks. If markets are encouraged by the new stimulus package, stocks will move to new highs.

Interestingly, expectations of more stimulus have not put any pressure on the U.S. dollar which continues to rebound against a broad basket of currencies. The stronger dollar may serve as an additional bearish catalyst for gold and silver which are already suffering from decreasing demand for safe-haven assets.

U.S. President Donald Trump Is Impeached For A Second Time But Markets Ignore It

Yesterday, U.S. House of Representatives impeached Donald Trump for a second time. Meanwhile, Senate Majority Leader Mitch McConnell stated that the Senate would not have an opportunity to vote on the issue before Trump leaves office.

Markets have remained very calm despite recent historic developments. Most likely, traders will focus on whether impeachment fight will interfere with the  vote on the new stimulus package.

President-elect Joe Biden has already stated that he expected that the impeachment process would not hurt urgent priorities. If the impeachment drama does not delay the new stimulus, markets will likely continue to ignore all developments on this front regardless of the ultimate outcome of the story.

Initial Jobless Claims Jump To 965,000

The U.S. has just provided Initial Jobless Claims and Continuing Jobless Claims reports. The Initial Jobless Claims report indicated that 965,000 Americans filed for unemployment benefits in a week compared to analyst consensus of 795,000.

Meanwhile, Continuing Jobless Claims increased from 5.07 million to 5.27 million compared to analyst consensus of 5.06 million.

The Initial Jobless Claims report was much worse than expected and highlighted the need for additional stimulus.

It remains to be seen whether the disappointing Initial Jobless Claims report will put any pressure on stocks as traders will likely remain focused on Biden’s stimulus plan.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Daily Forecast – Another Test Of Resistance At 0.7760

AUD/USD Video 14.01.21.

Australian Dollar Gains Ground Against U.S. Dollar

AUD/USD continues its attempts to settle above the resistance at 0.7760 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index has recently made several attempts to get to the test of the nearest resistance level at 90.50. A move above this level will push the U.S. Dollar Index towards the next resistance at 90.70 which will be bearish for AUD/USD.

Traders have completely ignored the recent vote in the U.S. House of Representatives which led to the second impeachment for the U.S. President Donald Trump. The vote in the Senate is unlikely to take place before President-elect Joe Biden enters office on January 20, and it remains to be seen whether the foreign exchange market will be sensitive to any news on this front.

According to recent reports, Biden will soon propose a $2 trillion stimulus package which may provide additional support to riskier assets, including commodity-related currencies like the Australian dollar.

Today, Australia reported that Building Permits grew by 2.6% month-over-month in November, in line with the analyst consensus. Later, traders will have a chance to take a look at U.S. Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims are projected to grow from 787,000 to 795,000 while Continuing Jobless Claims are expected to decline from 5.07 million to 5.06 million.

Technical Analysis

aud usd january 14 2021

AUD/USD failed to settle below the support at 0.7740 and is trying to get back above the resistance at 0.7760. If this attempt is successful, AUD/USD will move towards the next resistance level which has emerged at 0.7780.

A successful test of the resistance at 0.7780 will push AUD/USD towards the next resistance level which is located at 0.7800.

On the support side, AUD/USD needs to settle below the support at 0.7740 to have a chance to develop downside momentum. The next support level has recently emerged at 0.7725. In case AUD/USD declines below this level, it will move towards the next support at 0.7700.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – Test Of Support At 1.2130

EUR/USD Video 14.01.21.

Euro Is Under Pressure Against U.S. Dollar

EUR/USD is currently trying to settle below the support level at 1.2130 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index is trying to get to the test of the nearest resistance level at 90.50. If the U.S. Dollar Index manages to settle above this level, it will head towards the resistance at 90.70 which will be bearish for EUR/USD.

Yesterday, EU reported that Euro Area Industrial Production grew by 2.5% month-over-month in November compared to analyst consensus which called for growth of just 0.2%.

The surprising strength of the Euro Area Industrial Production did not provide support to the euro as foreign exchange market traders focused on Europe’s problems on the coronavirus front.

The recent data showed that situation in Spain, France, Germany, Italy remained challenging so European countries will likely have to keep virus containment measures for the upcoming weeks which will inevitably put additional pressure on the European economy.

Technical Analysis

eur usd january 14 2021

EUR/USD managed to get below the support at 1.2155 and attempts to settle below the next support level at 1.2130. If EUR/USD declines below the support at 1.2130, it will move towards the next support level which is located at the 50 EMA at 1.2115.

A successful test of the support at the 50 EMA will open the way to the test of the next support level at 1.2080. No important levels were formed between the support at 1.2080 and the 50 EMA at 1.2115 so this move may be fast. In case EUR/USD settles below the support at 1.2080, it will head towards the next support level at 1.2060.

On the upside, the previous support at 1.2155 will likely serve as the first resistance level for EUR/USD. If EUR/USD gets above this level, it will head towards the next resistance at 1.2175. A move above the resistance at 1.2175 will push EUR/USD towards the resistance at the 20 EMA at 1.2200.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – Support At 1.3625 Stays Strong

GBP/USD Video 14.01.21.

British Pound Is Flat Against U.S. Dollar

GBP/USD received support near 1.3625 and is trying to move higher while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index settled above the 20 EMA at 90.20 and made an attempt to get above the next resistance level at 90.50 but failed to develop sufficient upside momentum. If the U.S. Dollar Index manages to settle above 90.50, it will gain additional momentum and head towards the resistance at 90.70 which will be bearish for GBP/USD.

Yesterday, the U.S. House of Representatives impeached the U.S. President Donald Trump for the second time. The trial will not proceed until the Senate is back in regular session next Tuesday, and the foreign exchange market has completely ignored the historic development.

Today, traders will have a chance to take a look at the latest U.S. job market data. Analysts expect that Initial Jobless Claims increased from 787,000 to 795,000 while Continuing Jobless Claims declined from 5.07 million to 5.06 million. The reports will show whether the second wave of the virus puts additional pressure on the job market.

Technical Analysis

gbp usd january 14 2020

GBP/USD made several attempts to settle below the nearest support level at 1.3625 but these attempts yielded no results. In case GBP/USD declines below this level, it will gain downside momentum and head towards the next support level at 1.3575. There are no important levels between 1.3575 and 1.3625 so this move may be fast.

A successful test of the support at 1.3575 will open the way to the test of the next support level which is located at the 20 EMA at 1.3560. If GBP/USD settles below this level, it will head towards the next support at 1.3540.

On the upside, GBP/USD needs to stay above the support level at 1.3625 to have a chance to develop upside momentum in the near term. The next resistance level for GBP/USD is located at 1.3665. If GBP/USD manages to settle above this level, it will head towards the resistance which is located near the recent highs at 1.3710.

For a look at all of today’s economic events, check out our economic calendar.

USD/CAD Daily Forecast – U.S. Dollar Failed To Move Higher

USD/CAD Video 13.01.21.

Canadian Dollar Is Mostly Flat Against U.S. Dollar

USD/CAD  is currently testing the nearest support level at 1.2720 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to get back above the 20 EMA at 90.20 and is trying to develop additional upside momentum. The next resistance level for the U.S. Dollar Index is located at 90.50. If the U.S. Dollar Index gets to the test of this level, USD/CAD may get additional support.

Today, U.S. reported inflation numbers that were mostly in line with analyst estimates. Inflation Rate increased by 1.4% year-over-year in December while Core Inflation Rate grew by 1.6%.

Currently, Democrats are trying to impeach the U.S. President Donald Trump for the second time, but it should be noted that the foreign exchange market has mostly ignored the recent developments on the U.S. political front.

Oil is swinging between gains and losses today so the Canadian dollar is left without additional support. At the same time, USD/CAD remains mostly flat despite the dollar’s strength against a broad basket of currencies.

Technical Analysis

usd cad january 13 2021

USD to CAD is currently trying to settle below the nearest support level at 1.2720. If this attempt is successful, USD to CAD will get to the test of the next support at 1.2700. RSI is in the moderate territory so there is plenty of room to gain downside momentum in case the right catalysts emerge.

In case USD to CAD manages to get below the support at 1.2700, it will move towards the next support level at 1.2665. A successful test of this level will push USD to CAD towards the support which is located near January lows at 1.2625.

On the upside, the nearest material resistance level for USD to CAD is located near the 20 EMA at 1.2750. If USD to CAD settles above this level, it will head towards the next resistance at 1.2775. A move above this level will open the way to the test of the resistance at 1.2800.

For a look at all of today’s economic events, check out our economic calendar.

Oil Mixed As Crude Inventories Decline

Oil Video 13.01.21.

Crude Inventories Decline By 3.2 Million Barrels

EIA has just released its Weekly Petroleum Status Report which indicated that crude inventories declined by 3.2 million barrels. Yesterday, API Crude Oil Stock Change Report estimated that crude inventories decreased by 5.8 million barrels, but the market is traditionally focused on the EIA data.

At this point, crude oil inventories are about 8% above the five-year average for this time of the year. The situation is improving but there is still more work to be done to bring inventories to normal levels.

Interestingly, crude oil imports increased by 0.9 million barrels per day (bpd) and averaged 6.2 million bpd. EIA stated that crude oil imports averaged about 5.6 million bpd in the last four weeks. Thus, crude inventories declined despite the major increase in imports which is a positive catalyst for the market.

Meanwhile, gasoline inventories increased by 4.4 million barrels while distillate fuel inventories grew by 4.8 million barrels.

All in all, it was a bullish report which indicated that crude inventories continued to decline despite the sudden increase in imports. If inventories continue to decrease in the upcoming weeks, oil will have good chances to move higher.

U.S. Oil Production Remains Flat At 11 Million Barrels Per Day

The Weekly Petroleum Status Report indicated that U.S. domestic oil production has remained flat at 11 million bpd despite the recent improvements on the oil price front.

This is good news for oil bulls as U.S. oil production remained unchanged at a time when the price of oil crossed the $50 level. Perhaps, oil producers need more time to react to recent developments.

However, I’d note that oil managed to settle above the previous multi-month highs at $43.75 back at the end of November so the oil industry had plenty of time to adapt to the new upside trend.

Most likely, U.S. producers are very cautious as their finances have deteriorated during the current crisis. This is bullish for the market as inventories will decline faster if demand rebounds but U.S. production remains near current levels.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Resistance At The 20 EMA Remains Strong

Silver Video 13.01.21.

Silver Failed To Continue Its Rebound

Silver made an attempt to get to the test of the resistance at the 20 EMA at $25.75 but lost momentum and pulled back while the U.S. dollar gained some ground against a broad basket of currencies.

The U.S. Dollar index gained upside momentum and managed to get above the resistance at the 20 EMA at 90.20. The next material resistance level for the U.S. Dollar Index is located at 90.50. A move above the resistance at 90.50 may put some pressure on silver and gold price today.

Gold is mostly flat despite stronger U.S. dollar. Currently, gold is trying to settle above the $1850 level. The nearest resistance level for gold has emerged at $1865. In case gold settles above this level, it will head towards the next resistance at the 50 EMA at $1875 which will be bullish for silver and other precious metals.

Gold/silver ratio received support near the 20 EMA at 72.70 and is trying to settle above the 73 level. If this attempt is successful, gold/silver ratio will have a chance to get to the test of the 50 EMA at 74.40 which will be bearish for silver.

Technical Analysis

silver january 13 2021

Silver pulled back from recent highs but continued its attempts to settle above the resistance level at $25.55. RSI is in the moderate territory so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

If silver settles above $25.55, it will have a chance to get to the test of the resistance at the 20 EMA at $25.75. A move above the 20 EMA will push silver towards the next material resistance level which is located at $26.30.

On the support side, the nearest support area for silver is located between the 50 EMA at $25.20 and the support level at $25.30. Silver has already made an attempt to settle below this support area during the current trading session but failed to gain sufficient downside momentum.

If silver declines below the 50 EMA, it will quickly get to the test of the next support level at $25.00. A move below this level will open the way to the test of the support at $24.70.

For a look at all of today’s economic events, check out our economic calendar.

Stocks Decline As Traders Wait For Additional Upside Catalysts

The Market Needs More Catalysts To Move Higher

S&P 500 futures are moving lower in premarket trading as traders wait for additional upside catalysts.

Today, the U.S. House of Representatives will vote on impeachment of U.S. President Donald Trump. If the House manages to impeach Trump for the second time, the vote will move to the Senate where Republicans still have majority.

While recent days have been turbulent on the political front, markets remained mostly calm. It remains to be seen whether investors will react to any impeachment news as President-elect Joe Biden will enter office on January 20, and a new chapter will begin.

Crude Inventories Continue To Move Lower, Pushing Oil To New Highs

WTI oil made an attempt to settle above the $54 level after API Crude Oil Stock Change report indicated that crude inventories declined by 5.8 million barrels compared to analyst consensus which called for a decline of 2.7 million barrels.

Declining inventories and the recent Saudi Arabia’s decision to cut production by 1 million barrels per day (bpd) continue to serve as a major bullish catalyst for the oil market.

Not surprisingly, oil-related stocks have enjoyed solid gains at the beginning of this year and look ready to move closer to highs seen back in June 2020.

Inflation Reports Are Mostly In Line With Analyst Estimates

The U.S. has just provided Inflation Rate and Core Inflation Rate reports for December. Inflation Rate increased by 0.4% month-over-month, in line with analyst expectations.

On a year-over-year basis, Inflation Rate grew by 1.4% compared to analyst consensus which called for growth of 1.3%. Meanwhile, Core Inflation Rate grew by 1.6% year-over-year, in line with analyst estimates.

At this point, there are no signs of serious pressure on the pricing front. Traders’ attention has recently shifted to the U.S. government bond market as 10-year Treasury yields rallied from 0.92% to 1.18% in just six trading sessions before pulling back towards 1.13%.

It remains to be seen whether this rally will continue as Fed is unlikely to decrease its asset purchases at a time when the economy needs more stimulus and inflation remains under control. If yields remain at low levels, stocks may get an additional boost.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Daily Forecast – Test Of Resistance At 0.7760

AUD/USD Video 13.01.21.

Australian Dollar Is Mostly Flat Against U.S. Dollar

AUD/USD is currently testing the resistance level at 0.7760 while the U.S. dollar remains under pressure against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle below the nearest support level at 90. In case the U.S. Dollar Index manages to settle below this level, it will move towards the next support level at 89.75 which will be bullish for AUD/USD.

The rapide increase of the U.S. Treasury yields, which provided material support to the American currency in recent days, was stopped, and the U.S. dollar found itself under pressure.

Foreign exchange market traders will continue to pay close attention to the latest developments in the bond market since stronger yields may push the U.S. dollar to higher levels.

Today, the U.S. will provide inflation data for December. Analysts expect that Inflation Rate grew by 1.3% year-over-year while Core Inflation Rate increased by 1.6%. It remains to be seen whether inflation data will have a material impact on the dynamics of the U.S. dollar as traders may continue to focus on yields and the potential new stimulus package.

Technical Analysis

aud usd january 13 2021

AUD/USD managed to get above the resistance at 0.7740 and is trying to settle above the next resistance level at 0.7760. RSI remains in the moderate territory so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

If AUD/USD settles above the resistance at 0.7760, it will move towards the next resistance level at 0.7800 although it may also face some resistance at 0.7780. In case AUD/USD gets above the resistance at 0.7800, it will continue its upside move and get to the test of the next resistance level which is located at January highs at 0.7820.

On the support side, the previous resistance level at 0.7740 will serve as the first support level for AUD/USD. In case AUD/USD declines below this level, it will move towards the next support at 0.7700. A successful test of this level will open the way to the test of the support at the 20 EMA at 0.7685.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Daily Forecast – U.S. Dollar Remains Under Pressure

EUR/USD Video 13.01.21.

Euro Continues To Move Higher Against U.S. Dollar

EUR/USD is currently testing the resistance at 1.2220 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle below the 90 level. U.S. Treasury yields, whose rally provided support for the American currency, have fallen from recent highs, putting pressure on the dollar. If the U.S. Dollar Index manages to settle below the 90 level, it will gain downside momentum and move towards the next support level at 89.75 which will be bullish for EUR/USD.

Today, EU will provide Euro Area Industrial Production report for November. Analysts expect that Industrial Production increased by 0.2% month-over-month. On a year-over-year basis, Industrial Production is projected to decline by 3.3%.

In the U.S., foreign exchange market traders will focus on inflation data for December. Inflation Rate is projected to grow by 1.3% year-over-year while Core Inflation Rate is expected to increase by 1.6%.

The market will also pay attention to the latest developments on the U.S. political front as Democrats are trying to impeach the U.S. President Donald Trump. Traders have mostly ignored the recent turmoil in Washington, and it remains to be seen whether the market will react to any impeachment news.

Technical Analysis

eur usd january 13 2021

EUR/USD is currently trying to settle above the resistance level at 1.2220. If EUR/USD manages to settle above this level, it will gain upside momentum and move towards the next resistance at 1.2250.

A successful test of the resistance at 1.2250 will push EUR/USD towards the resistance at 1.2280. In case EUR/USD settles above the resistance at 1.2280, it will head towards the next resistance level at 1.2310.

On the support side, a move below the 20 EMA at 1.2215 will open the way to the test of the support at 1.2175. If EUR/USD declines below this support level, it will move towards the next support at 1.2155. A successful test of this level will push EUR/USD towards the support level which is located at the recent lows at 1.2130.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – British Pound Continues To Move Higher

GBP/USD Video 13.01.21.

U.S. Dollar Is Under Pressure

GBP/USD is currently trying to settle above the resistance at 1.3665 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index gained downside momentum and is testing the support level at 90. If this test is successful, the U.S. Dollar Index will move towards the next support at 89.75 which will be bullish for GBP/USD.

Today, foreign exchange market traders will focus on inflation data from the U.S. Analysts expect that Inflation Rate increased by 1.3% year-over-year in December. On a month-over-month basis, Inflation Rate is projected to grow by 0.4%. Meanwhile, Core Inflation Rate is projected to increase by 1.6% year-over-year.

Inflation reports are especially interesting in the light of the recent increase in U.S. Treasury yields which provided some support to the American currency. However, the yield of 10-year Treasuries has recently declined from 1.18% to 1.12%, and the U.S. dollar found itself under pressure. If yields continue to pull back, the U.S. Dollar Index will likely move closer to yearly lows at 89.21, and GBP/USD will get a boost.

Technical Analysis

gbp usd january 13 2021

GBP/USD is testing the nearest resistance level at 1.3665. If this test is successful, GBP/USD will move towards the next resistance which is located near January highs at 1.3710. RSI remains in the moderate territory so there is plenty of room to gain additional momentum in case the right catalysts emerge.

If GBP/USD settles above the resistance at 1.3710, it will head towards the next resistance level at 1.3755. A move above this level will open the way to the test of the resistance at 1.3785.

On the support side, a move below 1.3665 will push GBP/USD towards the support at 1.3625. No important levels were formed between 1.3625 and 1.3665 so this move may be fast.

In case GBP/USD declines below the support level at 1.3625, it will head towards the next support level at 1.3575. If GBP/USD settles below this level, it will get to the test of the next support level which is located at the 20 EMA at 1.3560.

For a look at all of today’s economic events, check out our economic calendar.

USD/CAD Daily Forecast – Canadian Dollar Rebounds After Sell-Off

USD/CAD Video 12.01.21.

U.S. Dollar Is Moving Lower Against Canadian Dollar

USD/CAD is testing the support at 1.2750 while the U.S. dollar is losing some ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the resistance at 90.50 and is currently trying to settle below 90.40. If the U.S. Dollar Index manages to get below 90.40, it will head towards the 20 EMA at 90.25 which will be bearish for USD/CAD.

There are no important economic reports scheduled to be released in the U.S. and Canada today so foreign exchange market traders will focus on general market sentiment.

U.S. Treasury yields continue to move higher, and the yield of the 10-year Treasuries has reached 1.18% compared to just 0.92% at the beginning of the year.

Rising yields have provided material support to the American currency but it remains to be seen whether further upside will push U.S. dollar to higher levels.

Meanwhile, the continuation of the rally in the oil market provides support to commodity-related currencies, including Canadian dollar. If WTI oil moves towards the $55 level, Canadian dollar may get a boost.

Technical Analysis

usd cad january 12 2021

USD to CAD is currently trying to settle below the nearest support level at 1.2750. If this test is successful, USD to CAD will move towards the next support level at 1.2720.

If USD to CAD declines below the support at 1.2720, it will get to the test of the support at 1.2700. A move below this level will open the way to the test of the support at 1.2665.

On the upside, USD to CAD needs to get back above the 20 EMA at 1.2760 to have a chance to develop upside momentum in the near term. In case USD to CAD manages to settle above the 20 EMA at 1.2760, it will get to the test of the resistance level at 1.2775.

If USD to CAD settles above the resistance at 1.2775, it will move towards the next resistance level which is located at 1.2800.

For a look at all of today’s economic events, check out our economic calendar.

Oil Tries To Settle Above The $53 Level

Oil Video 12.01.21.

Oil Continues To Move Higher As Saudi Arabia’s Production Cut Serves As A Major Bullish Catalyst

Yesterday’s pullback was temporary, and oil quickly moved to new highs. Currently, WTI oil is trying to settle above the $53 level. If this attempt is successful, WTI oil will be just a few steps away from the $55 level.

Meanwhile, Brent oil has already crossed this mark and is heading towards the $60 level which will likely be seen as a “normal” level by many traders.

Interestingly, December 2021 WTI oil futures are trading below the $51 level so the discount to the front-month contract is more than $2. A similar situation can be seen in the Brent oil market as December 2021 Brent oil futures are trading near the $54 level while the front-month contract is trading above the $56 level.

The current setup, which is known as backwardation, highlights the impact of the recent Saudi Arabia’s decision to cut oil production by 1 million barrels per day (bpd) in February and March.

At this point, oil traders are ready to ignore all risks of additional lockdowns as they believe that Saudi Arabia’s major production cut will help the market in the first quarter of 2021.

Will U.S. Oil Producers React To Higher Prices?

Tomorrow, EIA will provide its Weekly Petroleum Status Report which will show whether the U.S. oil industry reacted to the recent rally in the oil market.

The number of U.S. rigs drilling for oil continues to increase but U.S. domestic production remains unchanged at 11 million bpd. This is good for the market, and analysts expect that the upcoming EIA report will show that crude inventories declined by 2.7 million barrels.

According to the latest EIA report, crude inventories remained 9% above the five-year average for this time of the year. If inventories continue to decline towards their normal levels, oil will get additional support.

It remains to be seen whether the market will start to price in a more aggressive return of production from OPEC+ in case the current oil price rally continues. While such concerns are valid, any major moves on this front will be made in April when the situation with coronavirus is expected to improve thanks to vaccination and warmer weather in the hard-hit areas.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Daily Forecast – Test Of Resistance At $25.30

Silver Video 12.01.21.

Silver Rebounds After Sell-Off

Silver is currently testing the resistance level at $25.30 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index managed to get below 90.50 and made an attempt to settle below 90.40 but failed to develop sufficient downside momentum. If the U.S. Dollar Index declines below 90.40, it will head towards the 20 EMA at 90.25 which will be bullish for silver and gold price today. Weaker dollar typically serves as a positive catalyst for silver and other precious metals as it makes them cheaper for buyers who have other currencies.

Gold made an attempt to settle above the $1850 level but faced resistance near $1865 and pulled back below $1850. If gold moves towards the nearest support level at $1830, silver will find itself under pressure.

Gold/silver ratio is currently trying to settle below the 20 EMA at 72.70. If gold/silver ratio manages to get below the 20 EMA, it will have a good chance to settle in a range between the support at the 71 level and the 20 EMA at 72.70 which will be bullish for silver.

Technical Analysis

silver january 12 2021

Silver managed to get above the 50 EMA at $25.15 and is trying to settle above the resistance at $25.30. If this attempt is successful, silver will get to another test of the resistance level at $25.55.

In case silver manages to settle above $25.55, it will head towards the next resistance level which is located at the 20 EMA at $25.80. A successful test of the resistance at the 20 EMA will open the way to the test of the resistance at $26.30.

No important levels were formed between the 20 EMA at $25.80 and the resistance level at $26.30 so this move may be fast.

On the support side, a move below the 50 EMA at $25.15 will push silver towards the support level at $25.00. In case silver declines below this level, it will head towards the next support at $24.70. If silver gets below $24.70, it will head towards the support at $24.50.

For a look at all of today’s economic events, check out our economic calendar.

Stocks Move Higher As Traders Focus On The Upcoming Earnings Season

Traders Remain Bullish

S&P 500 futures are gaining ground in premarket trading as traders managed to shrug off virus fears and focused on the upcoming earnings season.

Analysts have generally set the bar low for companies during the pandemic so most firms easily beat earnings estimates.  At this point, it looks like traders are positioning for an upbeat earnings season which will bring many encouraging reports.

The recent job market reports have indicated that the second wave of the virus has started to put pressure on the economy. However, the negative developments occured in December, and it is not clear whether they had material impact on businesses’ performance in the fourth quarter.

The market stays very bullish, and traders are eager to purchase stocks on any potential upside catalyst while ignoring negative developments. In this light, S&P 500 has good chances to test new highs in the upcoming trading sessions.

WTI Oil Tries To Settle Above The $53 Level

Oil traders quickly forgot about the latest developments on the coronavirus front and continued to bet on the positive impact of Saudi Arabia’s production cut.

The upcoming API Crude Oil Stock Change report is projected to show that crude inventories declined by 2.7 million barrels which may serve as an additional upside catalyst.

If inventories continue to decrease, oil may move closer to the $55 level. Meanwhile, oil-related stocks look ready for another strong trading session as investors’ money returns to the segment.

The U.S. Dollar At The Crossroads

The U.S. Dollar Index, which measures the strength of U.S. dollar against a broad basket of currencies, has managed to rebound from the recent lows at 89.21 towards 90.50.

This rebound was driven by rising U.S. Treasury yields and short-covering from traders who rushed to take their profits from bearish bets on the dollar.

However, this rapid rebound has stalled near 90.50, and the American currency will likely need additional catalysts to continue its upside move. The direction of the U.S. dollar will have a material impact on commodities, including oil and precious metals, as well as stocks.

If yields continue to increase and the U.S. dollar moves higher against a broad basket of currencies, riskier assets like stocks and commodities may find themselves under pressure as traders will increase purchases of U.S. government debt to benefit from rising yields and stronger dollar.

For a look at all of today’s economic events, check out our economic calendar.