GBP/USD Correcting Gains, EUR/GBP is Facing Key Resistance

GBP/USD is facing resistance near 1.4000 and it is correcting gains. EUR/GBP is consolidating above 0.8550 and it could start a decent increase if it clears 0.8600.

Important Takeaways for GBP/USD and EUR/GBP

• The British Pound is struggling to settle above the 1.4000 resistance zone.

• There was a break below a key bullish trend line with support at 1.3925 on the hourly chart of GBP/USD.

• EUR/GBP is forming a strong support base above 0.8550 level.

• There was a break above a connecting bearish trend line at 0.8575 on the hourly chart.

GBP/USD Technical Analysis

After a sharp rally, the British Pound failed to stay above 1.4100 against the US Dollar. The GBP/USD pair declined and it even settled below the 1.4000 support zone.

It even dived towards the 1.3800 level and broke the 50 hourly simple moving average. Recently, there was a strong upward move above the 1.3900 level, but the pair struggled to clear the 1.4000 resistance zone.

A high is formed near 1.4004 on FXOpen before the pair dipped again. There was a break below a key bullish trend line with support at 1.3925 on the hourly chart of GBP/USD.

It traded as low as 1.3862 before recovering higher. There was a break above the 50% Fib retracement level of the downward move from the 1.4004 high to 1.3862 low.

However, the pair is facing resistance near the 1.3950 level and the 50 hourly simple moving average. The 61.8% Fib retracement level of the downward move from the 1.4004 high to 1.3862 low is also acting as a resistance.

The main resistance is still near 1.4000, above which the pair could rally again. On the downside, the 1.3900 level is a decent support. The next major support sits near the 1.3850 level, below which the pair could slide towards the 1.3800 level. Any more losses might call for a test of the 1.3720 support zone.

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February 2021 TOP 10 PAMM Accounts Overview

Although the winter is over, the early spring has not made things much brighter around the world. However, PAMM account managers continue to trade actively, adapting their strategies to the changing market. Investors’ goals are still the same — they want to invest their money in the most promising PAMM accounts with minimum risk and maximum profit.

On March 1, 2021, FXOpen launched a new round of “Money Managers” competition, where participants can not only show their skills in PAMM account management but also win up to 5,000 USD in prizes. Registration is open until May 1.

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EUR/USD and EUR/JPY: Euro is Facing Hurdles

EUR/USD started a fresh decline after it failed to surpass 1.2000. EUR/JPY is correcting gains and it is likely to struggle near the 130.00 zone.

Important Takeaways for EUR/USD and EUR/JPY

• The Euro topped near the 1.2000 level and started a fresh decline.

• There is a key declining channel forming with resistance near 1.1930 on the hourly chart of EUR/USD.

• EUR/JPY tested the 130.50 and recently declined to test the 129.50 support.

• There is a major bullish trend line forming with support near 129.65 on the hourly chart.

EUR/USD Technical Analysis

Recently, the Euro made an attempt to climb above the 1.2000 resistance against the US Dollar, but it failed. The EUR/USD pair started a fresh decline and broke the 1.1960 support zone.

The pair even broke the 1.1945 support level and the 50 hourly simple moving average. It traded as low as 1.1882 on FXOpen before the pair started consolidating losses. It climbed above 1.1900, but there was no bullish momentum.

An initial resistance is near the 1.1915 level. It is close to the 50% Fib retracement level of the recent decline from the 1.1951 high to 1.1882 low. The next major resistance is near the 1.1925 level and the 50 hourly simple moving average.

There is also a key declining channel forming with resistance near 1.1930 on the hourly chart of EUR/USD. The channel resistance is near the 61.8% Fib retracement level of the recent decline from the 1.1951 high to 1.1882 low.

Therefore, the pair is likely to face a strong resistance near the 1.1925 and 1.1930 levels. A clear break above 1.1930 might start a fresh increase towards the 1.2000 resistance.

If not, there are chances of more losses in EUR/USD below the 1.1880 support zone. The next major support is near the 1.1850 level, below which the pair could dive towards the 1.1800 support level.

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AUD/USD and NZD/USD Showing Signs of a Breakdown

AUD/USD started a fresh decline from well above 0.7800 and declined below 0.7750. NZD/USD is also declining and it seems like it could break the 0.7150 support zone.

Important Takeaways for AUD/USD and NZD/USD

• The Aussie Dollar started a fresh decline below the 0.7820 and 0.7800 support levels against the US Dollar.

• There was a break below a couple of bearish continuation patterns near 0.7800 and 0.7755 on the hourly chart of AUD/USD.

• NZD/USD declined sharply after it failed to surpass the 0.7270 resistance area.

• There is a crucial bullish trend line forming with support near 0.7160 on the hourly chart of NZD/USD.

AUD/USD Technical Analysis

After a decent upward move above 0.7800, the Aussie Dollar faced sellers near 0.7850 against the US Dollar. The AUD/USD pair traded as high as 0.7848 on FXOpen and recently started a fresh decline.

There was a break below a few important supports near 0.7800. There was also a break below a couple of bearish continuation patterns near 0.7800 and 0.7755 on the hourly chart of AUD/USD.

The pair even broke the 0.7780 support level and the 50 hourly simple moving average. A low is formed near 0.7724 on FXOpen and the pair is currently struggling to recover. An initial resistance on the upside is near the 0.7753 level.

It is close to the 23.6% Fib retracement level of the downward move from the 0.7848 high to 0.7724 low. The next major resistance is near the 0.7770 level or the 50 hourly simple moving average.

The main resistance is forming near the 0.7785 level. The 50% Fib retracement level of the downward move from the 0.7848 high to 0.7724 low is also near 0.7785. If there is no recovery above 0.7770 or 0.7785, there is a risk of more losses.

An initial support is near the 0.7725 level. If there is a downside break below 0.7725 and 0.7710, the pair could accelerate lower. In the stated case, it could even decline below 0.7700 and test 0.7650.

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Crude Oil Price Drops from the Highs, But Bullish Pressure Remains

One of the most spectacular market rallies this year formed on the oil market. After the dip below the zero level in April 2020, the price of oil rallied to $68 in March 2021.

The move higher comes in line with rising global demand as the global trade volume reaches pre-pandemic levels. However, the price of oil is higher now than the pre-pandemic levels and triggers expectations of higher inflation ahead.

Oil and Inflation – Why Should Traders Care?

The problem with higher oil prices is that they trigger higher inflation expectations. As such, central banks are forced to intervene because they all use inflation as part of their mandate. More precisely, higher inflation above a central bank’s target leads to the central bank rising the interest rates. Hence, the currency market is the first one to be impacted by a move in the price of oil. Because traders try to anticipate the moves well ahead, the volatility in the currency market increases with the volatility in the oil market.

Last week’s drop of over 7% on a single trading day spooked some investors, but the price of oil found strong support at the $60 level. Moving forward, the focus shifts to the OPEC+ meeting scheduled at the start of April.

While the global oil demand increased in the last months as more economies reopen after lockdowns generated by the pandemic, there is still room to go. At current levels, demand is still less than pre-pandemic levels, so the price of oil may make new highs if the supply does not meet demand.

Speaking of supply, if OPEC does not increase production in the second quarter of the year, the risk is that the price of oil will make new highs. The vaccination pace in advanced economies is strong enough to trigger rapid economic recovery, creating a positive environment for further advances in the price of oil.

FXOpen Blog

EUR/USD Turns Red, USD/JPY Is Correcting Gains

EUR/USD started a fresh decline and traded below the key 1.1880 support zone. USD/JPY is correcting gains and it is now trading below the 108.80 support.

Important Takeaways for EUR/USD and USD/JPY

• The Euro failed to continue higher above 1.1950 and started a fresh decline.

• There is a key bearish trend line forming with resistance near 1.1915 on the hourly chart of EUR/USD.

• USD/JPY started a downside correction from well above the 109.00 level.

• There is a major bearish trend line forming with resistance near 108.65 on the hourly chart.

EUR/USD Technical Analysis

In the past few days, the Euro struggled to gain bullish momentum above 1.1950 against the US Dollar. The EUR/USD pair formed a swing high near 1.1946 on FXOpen and recently started a fresh decline.

There was a break below a few important supports near the 1.1890 and 1.1880 levels. The pair even settled below the 1.1880 support zone and the 50 hourly simple moving average. A low is formed near 1.1836 and the pair is currently consolidating losses.

An initial resistance is near the 1.1860 level. It is close to the 23.6% Fib retracement level of the recent decline from the 1.1946 swing high to 1.1836 low.

The first major resistance is now forming near the 1.1890 and 1.1880 levels. The 50% Fib retracement level of the recent decline from the 1.1946 swing high to 1.1836 low is also near 1.1891. Moreover, there is a key bearish trend line forming with resistance near 1.1915 on the hourly chart of EUR/USD.

Therefore, the pair must clear 1.1880 and 1.1920 to start a strong increase in the coming sessions. Conversely, the pair could continue to move down below the 1.1836 low. The first major support is near the 1.1820 level.

If there is a downside break below the 1.1820 support, the pair could dive towards the 1.1750 support in the near term. Any more losses might call for a test of the 1.1715 support level.

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Gold Price Stuck Below $1,750, Oil Price Facing Hurdles

Gold price started consolidating in a range above the $1,720 support. Crude oil price is now trading below $60.00 and $60.50 resistance levels.

Important Takeaways for Gold and Oil

• Gold price is trading in a range above the $1,720 support against the US Dollar.

• There are two connecting bearish trend lines forming with resistance near $1,738 on the hourly chart of gold.

• Crude oil price is holding the key $57.50 and $57.40 support levels.

• There is a major bearish trend line forming with resistance near $59.80 on the hourly chart of XTI/USD.

Gold Price Technical Analysis

Gold price made an attempt to surpass the $1,750 resistance against the US Dollar, but it failed. As a result, there was a fresh decline, but the bulls were active above the $1,720 support.

It seems like the price is forming a strong support base above the $1,720 zone. The recent low was formed near $1,722 on FXOpen before the price started an upward move. It broke the 23.6% Fib retracement level of the recent decline from the $1,745 swing high to $1,722 low.

An immediate resistance is near the $1,730 level and the 50 hourly simple moving average. The next key resistance is near the $1,733 level. It is close to the 50% Fib retracement level of the recent decline from the $1,745 swing high to $1,722 low.

There are also two connecting bearish trend lines forming with resistance near $1,738 on the hourly chart of gold. To start a strong increase, the price must clear trend lines and $1,740.

The main resistance is still near $1,750, above which the price could start a strong rally. Conversely, the price could fail to continue higher and it might decline below the $1,725 level.

The main support is near the $1,720 zone. A clear break below the $1,720 support may possibly start a strong decline towards $1,700 or even $1,680 in the near term.

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Strong Dollar Breaks the Reflation Theme – All Eyes on the U.S. Yields

2020 proved to be a challenging year for currency traders looking to forecast how the U.S. dollar will react to the pandemic. The Federal Reserve of the United States (Fed) immediately lowered the fed funds rate to the lower boundary (i.e., close to zero) and vouched to leave it there for as long as necessary.

On top of that, the Fed restarted the quantitative easing program, buying bonds to lower the yields on the short and long end of the curve. Furthermore, it opened USD swap lines with other central banks in the advanced world to provide liquidity and advert the strong dollar theme.

It worked.

The dollar initially appreciated as the world looked for safety in the face of the pandemic, but then the Fed’s plan entered into effect. Slowly at first, more aggressively after, the dollar started to lose ground across the dashboard.

Everything appreciated in dollar terms – the euro, the Australian dollar, the British pound, equities, and commodities alike. The bearish trend on the dollar was so strong that all investment houses forecasted an even lower dollar in 2021.

They were right.

The so-called reflation trade, where U.S. equities advance, the dollar declines, and risk-on dominates, was the theme for most of the first quarter of the year. However, the dollar started to show some strength recently on the back of a faster economic recovery, impressive vaccination campaign, and a U.S. administration that delivers.

What’s Next for the U.S. Dollar?

As we head into the second quarter of the year, the dollar trades with a mixed tone. On the one hand, it gained against the euro since the year started.

At the start of January, the EURUSD pair traded above 1.23, and last Friday closed below 1.18. Because the euro has the biggest weight in the dollar index, the move lower in the EURUSD exchange rate led to a reversal in the DXY.

Gold made a new all-time high in 2020 – it traded above $2,000 last summer but is in retreat ever since. It is barely holding above $1,700 at the moment, and fears of higher inflation in the United States and the developed world are not enough to fuel a rally in the yellow metal.

The problem for the reflation trade and gold comes from the fixed-income market. The U.S. yields are rising, and whenever this happened in the past, gold weakened.

Put it simply, rising yields mean that investors flee the safety of bonds in search of higher returns in riskier assets. Effectively, it means that confidence is back and, thus, gold suffers as investors do not look for protection anymore.

Higher yields also bode well for the dollar. Hence, before betting on a lower dollar, investors should first monitor the fixed-income market and interpret where the yields will go.

All in all, the second quarter will be extremely interesting. If the yields continue to rise, the dollar will have a hard time weakening.

FXOpen Blog

EUR/USD Dives, USD/CHF Likely To Continue Higher

EUR/USD started a fresh decline below the 1.1800 and 1.1780 support levels. USD/CHF is rising and it is likely to continue higher above 0.9450.

Important Takeaways for EUR/USD and USD/CHF

• The Euro started a fresh drop below the 1.1850 and 1.1800 support levels against the US Dollar.

• There is a major bearish trend line forming with resistance near 1.1755 on the hourly chart of EUR/USD.

• USD/CHF is trading in a bullish zone above the 0.9350 resistance zone.

• There is a key ascending channel forming with support near 0.9405 on the hourly chart.

EUR/USD Technical Analysis

The Euro failed to stay above the 1.1900 zone and started a fresh decline against the US Dollar. The EUR/USD pair broke the key 1.1850 pivot zone to move into a bearish zone.

The pair even broke the 1.1820 support level and settled below the 50 hourly simple moving average. The bears were able to push the pair below 1.1800 and a low is formed near 1.1709 on FXOpen.

It is currently showing a lot of bearish signs and it seems like there are high chances of more losses below the 1.1700 support zone. The next major support could be near the 1.1660 level, below which the pair may possibly test the 1.1620 support.

On the upside, an initial resistance is near the 1.1730 level. It is close to the 23.6% Fib retracement level of the recent decline from the 1.1804 high to 1.1709 low.

There is also a major bearish trend line forming with resistance near 1.1755 on the hourly chart of EUR/USD. The trend line is close to the 50% Fib retracement level of the recent decline from the 1.1804 high to 1.1709 low.

The 50 hourly simple moving average is also near 1.1760. If there is a break above the trend line resistance, the pair could correct higher towards the 1.1800 zone. The next major resistance is near the 1.1850 level.

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Gold Price and Oil Price Eye Additional Gains

Gold price started a fresh increase after testing the $1,680 support zone. Crude oil price is trading nicely above $60.00 and it might continue to rise steadily.

Important Takeaways for Gold and Oil

• Gold price remained well bid near the $1,680 and $1,675 levels against the US Dollar.

• There was a break above a major bearish trend line with resistance near $1,708 on the hourly chart of gold.

• Crude oil price is holding the key $59.50 and $60.00 support levels.

• There was a break above a key bearish trend line with resistance near $60.55 on the hourly chart of XTI/USD.

Gold Price Technical Analysis

Earlier this week, gold price extended its decline below the $1,710 and $1,700 support levels against the US Dollar. However, the bulls were active near the $1,680 and $1,675 levels.

A low was formed near $1,677 on FXOpen before the price started a fresh increase. There was a break above the $1,695 and $1,700 resistance levels. The price climbed nicely above the 50% Fib retracement level of the downward move from the $1,745 swing high to $1,677

There was also a break above a major bearish trend line with resistance near $1,708 on the hourly chart of gold. The price is now trading well above $1,710 and the 50 hourly simple moving average.

It is now testing the 76.4% Fib retracement level of the downward move from the $1,745 swing high to $1,677 low. A successful break above the $1,730 resistance could open the doors for a larger increase in the coming sessions.

The next key resistance is near the $1,745 level. The main resistance is still near $1,750, above which the price could test $1,780. Conversely, the price could fail to continue higher and it might decline below the $1,720 level.

The main support is near the $1,705 level. A clear break below the $1,705 support may possibly start a strong decline towards $1,675 in the near term.

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Global Economic Activity Picks Up On Increased Vaccination Campaigns

As most of the world celebrates Easter, strong signs of economic recovery emerge. Last Friday, with most banks closed, the United States revealed the Non-Farm Payrolls (NFP) numbers for March 2021.

The release exceeded all expectations, showing that the United States economy added close to a million new jobs in only one month. Moreover, the unemployment rate edged down to 6%, a further encouraging sign that the world’s largest economy is recovering from the pandemic.

Furthermore, important revisions to previous data showed that an additional 156k jobs were created in January and February. In total, 1.7 million jobs were added by the United States economy in the first quarter of the year. Because this is the largest economy in the world, the chances are that the positive economic effects will spill over to its main trading partners, fueling a strong economic recovery around the world.
Vaccines Rollout Spurring Economic Growth

Last November, the world found out that science delivered on its efforts to find a vaccine against the COVID-19 virus. For three consecutive weeks, companies like Pfizer/BioNTech, Moderna, or AstraZeneca, released promising data on their vaccine trials.

Fast forward four months to present times, and the vaccines are rolled out around the world. While differences exist in the vaccination pace, the main idea is that the quicker the governments manage to inoculate the population, the faster the economy recovers, and life will get back to normal.

Supply and distribution disparities exist. The United Kingdom and the United States are leading the developed world, while the Euro area is lagging behind.

It all came down to how fast the nations moved to secure the vaccines and what risks they took in the early days of the pandemic. Europe lost momentum in the first quarter, but things look promising starting with April – in the first day of April, over three million people received a vaccine in Europe, a pace that will likely increase moving forward.

If we add the fiscal stimulus in the United States (i.e., $1.9 trillion) already distributed and the upcoming $3 trillion for long-term infrastructure projects, the chances are that the economic data will beat expectations in the months ahead too.

The currency market acted accordingly and rewarded investors closely watching the vaccination race – the U.S. dollar and the British pound rallied in the last months, while the euro lagged. Moving forward, 2021 might be a year dominated by a risk-on environment as the global economy recovers from the pandemic. The key stays with the vaccination campaigns – the quicker the world’s nations inoculate the population, the better for the economic growth.

FXOpen Blog

EUR/USD and EUR/JPY: Euro is Eyeing More Gains

EUR/USD started a fresh increase above the 1.1820 and 1.1850 resistance levels. EUR/JPY is correcting gains, but it is likely to restart its rise above 130.50.

Important Takeaways for EUR/USD and EUR/JPY

• The Euro formed a base above 1.1720 and started a fresh increase above 1.1800.

• EUR/JPY is also trading in a positive zone above the 130.00 support.

• There is a major bullish trend line forming with support near 129.95 on the hourly chart.

EUR/USD Technical Analysis

After trading close to the 1.1700 level, the Euro started a fresh increase against the US Dollar. The EUR/USD pair broke the 1.1780 and 1.1800 resistance levels to move into a positive zone.

There was also a break above a couple of bullish continuation patterns near 1.1765 and 1.1820 on the hourly chart of EUR/USD. It opened the doors for more gains above the 1.1850 level and the 50 hourly simple moving average.

It traded as high as 1.1877 on FXOpen and it is now consolidating gains. An initial support is near the 1.1855 level. It is near the 23.6% Fib retracement level of the recent increase from the 1.1795 low to 1.1877 high.

Any more losses might call for a test of the 1.1840 support or the 50% Fib retracement level of the recent increase from the 1.1795 low to 1.1877 high. The next major support is near the 1.1800 level or the 50 hourly simple moving average.

On the upside, the pair is facing resistance near the 1.1880 level. The next major resistance is near the 1.1920 level. A clear break above 1.1920 might start a steady increase towards the 1.2000 resistance. The next major resistance above the 1.2000 level sits near the 1.2050 level.

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