Daily market report

Beginning with the UK, traders will be waiting for the latest claimant count and employment change figures which are both expected to have declined. In addition, the UK CPI (Mom) is likely to remain unchanged at 0.4%. In the US, retail sales are due for a drop from -0.6% to -0.8% in December, while the existing home sales are seen at 3.95M only down from 4.09M initially. Moreover, initial jobless claims are expected to rise from 205K up to 213K. In Canada, the forecasts are pointing to a drop in inflation as the CPI is likely to drop from 0.1% down to -0.5%. Now, let’s have a look at the latest price action developments in the major currency pairs alongside gold.
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The Euro remains firm above the 1.0800 psychological and the downside potential is likely to stay limited in the coming hours. From a technical standpoint, the pair remains in an uptrend and if prices manage to break above this week’s high, a continuation of the current advance toward the 1.0935 level cannot be ruled out. In the near term, the pair is likely to trade sideways until we see either a break above 1.0875 resistance or below 1.0780 support, however, it is important to note that the bullish momentum is still strong. On the other side, if the Euro fails to overtake the 1.0875 high, we might see a downside correction in the direction of 1.0780 support followed by the 1.0730 level in extension.


The British pound has reached a strong resistance zone located around the 1.2300 psychological barrier.
The pair extended its advance briefly above the 1.2240 hourly resistance before retreating lower, which might signal a potential downside correction in the coming hours.
For the time being, prices will likely trade sideways to lower between the 1.2225 and 1.2150 support levels as traders await job data from the UK.
A break below 1.2150 is needed to confirm a potential reversal in the short term, while if buyers manage to keep prices above that support, another move higher in the direction of 1.2240 will be possible.


USDJPY managed to bounce earlier this week after reaching an important support level located at 127.60 level. As of now, the daily trend remains in a clear downtrend, however, if the pair succeed to break above the 128.80 resistance, a larger recovery can be expected which can reach the next resistance at the 129.50 level before the downtrend resume. An aggressive bearish scenario will be a failure to overtake the 128.80 resistance in the coming hours which can lead to a new decline in the direction of the 128.00 level. To summarize, the trend is still bearish in this pair and the current advance is likely to be temporary. On the flip side, only a daily close above 130.00 psychological resistance can weaken the current negative outlook.


The currency pair is still facing downside pressure after breaking below the 1.3500 support zone in the short term, however, the downtrend is lacking momentum as the biggest trend remains flat. From a wider angle, prices are trading sideways, despite the recent drop we have seen in the previous days. If the current retracement extends to the upside, we can see a move back in the direction of the 1.3420-1.3440 resistance zone before seeing new sellers again. On the flip side, if we see a failure in the coming hours, a move back in the direction of 1.3320 support will be likely. Finally, all eyes will be on the upcoming inflation data from Canada as mentioned earlier, and technically, the nearest resistance is seen at the 1.3420 level while the closest support stands at the 1.3355 level.


Gold prices rose to a 7-month high last week as buyers succeeded to overtake the 1900 mark. Technically, gold is following a bullish trend formed with a series of higher highs and higher lows, in addition, prices managed to break above the rising channel as per the chart below, which keeps the positive trend intact. In the near term, the yellow metal is likely to stabilize in the coming hours as the technical indicators have reached overbought conditions. Meanwhile, another move up toward the 1922 hourly resistance remains possible. On the other side, a downside correction can extend to the 1909 support level initially, followed by the 1893 level in extension. Finally, the trend remains bullish in gold and any drop is likely to be short-lived if prices keep trading above the 1893-1890 support zone during this week.

Economic analyst
Amine Hiani

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