- December 14, 2020
- Posted by: Analysis Team
- Category: FOREX, Technical Analysis
The British pound rose in early trading as the market reflected on the decision by the European Union and the United Kingdom to continue deliberations on Brexit even as both sides warned that a no-deal was likely. By continuing the negotiations, the two sides removed the initial likelihood of having a no-deal. Sunday became the deadline last week after Boris Johnson and Ursula von der Leyen concluded an unproductive meeting in Brussels.
The Japanese yen was little changed even after strong economic data from Japan. According to the Bank of Japan (BOJ), the Tankan large manufacturers Index improved from –27 to –10 in the third quarter. That was better than the expected increase to –15. Further data showed that the non-manufacturers index increased from -12 to -5 as companies restarted their operations. These numbers came a few days after the government announced a new stimulus package that will provide more support to companies.
The price of crude oil rose slightly during the Asian session as the US started distribution of the Covid vaccine. The first truck full of the vaccine departed during the weekend as the country starts the vaccinations. The process will now go on for the next few months. The price rose even as the number of active oil rigs continued to rise in the US. According to the latest data by Baker Hughes, the active rigs increased by 15 to 338. Oil rigs alone increased by 12 to 238, which is the highest number in months.
The USD/JPY pair is trading at 103.98, which is where it ended last week. On the four-hour chart, the pair’s price is slightly below the 25-day and 15-day exponential moving averages (EMAs) while the Average True Range (ATR) has started to rise. Also, the pair is between the important support and resistance levels at 103.66 and 104.75. Therefore, for today, the pair will possibly remain in the current range.
The EUR/USD pair rose slightly to the current level of 1.2131. On the four-hour chart, the pair is also in the same range as last week. It is between the important support of 1.2057 and the resistance level at 1.2177. Also, the price has moved above the short and medium-term moving averages. Like the USD/JPY pair, the EUR/USD will likely remain inside the current range today.
The GBP/USD bounced back after the two sides decided to extend talks. On the 30-minute chart, the pair formed an upward gap as the price rose to an intraday high of 1.3365. The pair also moved above the 25-day and 15-day exponential moving averages while the signal and main line of the MACD moved above the neutral line. For today, the outlook for the pair is neutral. It may continue rising above the intraday high of 1.3365 or attempt to fill the gap.