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EUR/USD Facing Resistance, GBP/USD Remains Elevated

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Aayush Jindal

Key Highlights

  • EUR/USD found support near 1.2060 and corrected higher.
  • It is facing resistance near 1.2160 and 1.2200 on the 4-hours chart.
  • GBP/USD is consolidating below 1.3750, USD/JPY rallied above 104.50.
  • The US ISM Manufacturing PMI (to be released today) could decline from 60.7 to 59.5 in Jan 2021.

EUR/USD Technical Analysis

This past week, the Euro found support near 1.2060 against the US Dollar. EUR/USD started a fresh increase and it climbed above 1.2100, but it is facing hurdles.

Looking at the 4-hours chart, the pair traded as low as 1.2059, and settled below the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours).

It started a decent recovery and cleared the 1.2120 resistance. There was also a break above the 50% Fib retracement level of the downward move from the 1.2189 high to 1.2059 low.

However, the pair seems to be facing a couple of important hurdles, starting with 1.2160 and a connecting bearish trend line on the same chart.

The next major resistance is near the 1.2200 or the 200 simple moving average (green, 4-hours). A close above the trend line resistance and 1.2200 could open the doors for a decent increase in the coming sessions.

Conversely, EUR/USD could fail to continue above 1.2160 or 1.2200. In the stated case, there is a risk of a fresh decline towards the 1.2060 support zone.

Looking at GBP/USD, the pair made another attempt to gain momentum above 1.3750, but it failed. On the other hand, USD/JPY saw a sharp increase above the 104.00 and 104.50 resistance levels.

Economic Releases

  • Germany’s Manufacturing PMI Jan 2021 - Forecast 57.0, versus 57.0 previous.
  • Euro Zone Manufacturing PMI Jan 2021 – Forecast 55.5, versus 54.7 previous.
  • UK Manufacturing PMI Jan 2021 – Forecast 52.9, versus 52.9 previous.
  • US Manufacturing PMI Jan 2021 – Forecast 59.0, versus 59.1 previous.
  • US ISM Manufacturing PMI Jan 2021 – Forecast 59.5, versus 60.7 previous.
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