Daily market report
The UK retail sales for the month of December came out below expectations at -1.0% compared to 0.5% previously.
In the US, existing home sales (MoM) are expected to have declined from 4.09M to 3.96M while Canada retail sales are likely to drop from 1.4% to -0.5%.
Finally, the focus will be on ECB president Lagarde’s speech later today.
Now, let’s have a look at the latest price action developments in the major currency pairs alongside gold.
EURUSD
The Euro continued to trade sideways after buyers managed to preserve the hourly support located at the 1.0780 level.
In the near term, the trend is neutral, however, the daily trend is still bullish, and the Euro is likely to remain steady if prices continue to hold above the support level mentioned above.
In extension, a break above 1.0870 is needed to confirm an increase in the positive momentum, which can open the way for another advance toward the next resistance level at 1.0935 in the coming days.
On the other side, if the pair closes below 1.0780 support, a larger downside correction should be expected that can reach 1.0730 initially followed by the 1.0710 level.
GBPUSD
The British pound remains strong in the near term after breaking above the 1.2300 psychological barrier earlier this week.
As of now, prices are likely to stabilize in the coming hours and if we do see a retracement toward the 1.2350 level which is seen as the nearest support, new buyers should provide demand to prices for another attempt to target the 1.2435 peak again.
The positive trend is here to stay unless we see a break below the 1.2315 level in the coming hours which represents yesterday’s low.
To conclude, if prices continue trading above the 1.2300 zone, the upside trend is likely to stay unchanged, and buyers can look for 1.2400, followed by the 1.2435 level as the next station.
USDJPY
USDJPY managed to find support near the 127.60-127.80 zone mentioned in our previous report.
For the time being, the short-term trend has switched to neutral while the daily trend remains bearish. The pair is likely to continue to face resistance if the current advance reaches the 129.50 level in the coming hours.
From a wider angle, the daily trend remains bearish and if prices continue to trade below the 131.60 peak, the bearish sentiment should stay intact.
In the near term, a move back toward the next resistance zone located between 129.50 and 130.00 levels remain possible, however, the upside move should be considered temporary and might fade very soon after reaching resistance.
USDCAD
After breaking above the 1.3500 psychological barrier, the move was brief, and the pair fell again inside its daily range.
Overall, we can say that the main trend is neutral in this pair, therefore, we can continue to witness sideways trading in the coming days.
Technically, prices are likely to fall in the near term to reach the 1.3435 support before seeing new buyers again. The current range is wide and extended between 1.3520 and 1.3350 levels, and traders should wait for a clear break outside of those levels before confirming the next direction in this pair.
The nearest support stands at 1.3435 followed by 1.3355 levels, while the closest resistance is located at 1.3495 followed by 1.3520 levels.
GOLD
Gold confirmed its positive momentum after we saw a strong bounce from the 1900 support yesterday.
The bullish trend remains unchanged, and traders should look at declines as short-term corrections only which can offer entries at lower prices. As mentioned in our previous reports, gold is following a bullish trend formed with a series of higher highs and higher lows, reinforcing the bullish outlook.
This positive outlook is likely to remain in place for the coming days if prices continue to trade above the 1900-1895 support zone.
The next price targets are found at $1936 followed by $1945 per ounce, in the opposite, the nearest support stands at the 1917 level.
Economic analyst
Amine Hiani