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Technical analysis recommendations of EUR/USD and GBP/USD on January 4, 2021

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Relevance up to 10:00 2022-01-06 UTC+00

EUR/USD

The bulls tried to develop corrective prerequisites in the last days of the past year. However, its rival returned the situation to the center of the current consolidation of 1.1290 (monthly Fibo Kijun + daily cross) on the very first trading day of the new year. As a result, it can be noted that the area of 1.1383-87-98 (highs + weekly short-term trend) now serves as the upward border of the long-term movement that has formed the uncertainty. The downward target is the minimum extremum of the movement at 1.1186.

The advantage in the smaller timeframes is currently on the bearish side, as the pair is below the key levels, which are joining forces around 1.1323-20 (weekly long-term trend + central pivot level). The support for the classic pivot levels (1.1256 – 1.1216 – 1.1152) acts as pivot points for the continuation of the decline. In turn, a consolidation above the level of 1.1323-20 can change the current balance of forces in favor of the bulls. In this case, the pivot points will be the resistances of the classic pivot levels (1.1360 – 1.1424 – 1.1464).

GBP/USD

The bulls managed to close December very optimistically indicating a rebound from the tested support level of 1.3164 (monthly Fibo Kijun). In addition, the pair confirmed the consolidation in the weekly cloud after an attempt to break through its lower border. It should also be noted that trading is now underway to test the resistance of the daily Ichimoku cloud. Its breakdown and reliable consolidation above will form an upward target.

The implementation of the target will allow us to break through the weekly dead cross, whose levels are now the closest resistances and targets for bullish traders – 1.3571 (Kijun) and 1.3669 (Fibo Kijun). The main support levels here are formed by combinations of daily and weekly levels, among them the borders of 1.3475 and 1.3385-65 can be distinguished.

There is currently a struggle for the key levels of 1.3482-78 (central pivot level + weekly long-term trend) in the smaller timeframes, so the situation is still largely neutral. A reliable consolidation above the key levels will favor the bulls. The pivot points for further growth will be the resistance of the classic pivot levels (1.3535 – 1.3593 – 1.3646). On the contrary, the return of the bearish mood will allow us to consider the support of the classic pivot levels (1.3424 – 1.3371 – 1.3313).

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Ichimoku Kinko Hyo (9.26.52) and Kijun-sen levels in the higher time frames, as well as classic Pivot Points and Moving Average (120) on the H1 chart, are used in the technical analysis of the trading instruments.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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Review on the US market as of January 4

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