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The euro currency remains well supported against the US dollar, with the pair once again looking past weaker than expected German economic data. Buyers now need a bullish daily price close above the EURUSD pairs one-hundred day moving average. A sustained break of the 1.1430 to 1.1480 trading range will likely provide the catalyst for the next directional move.

The EURUSD pair is intraday bullish while trading above the 1.1480 level, key technical resistance remains at the 1.1500 and 1.1550 levels.

If the EURUSD pair trades below the 1.1430 level, sellers will likely to test the 1.1410 and 1.1360 support levels.

The US dollar is consolidating just below the key 109.00 level against the Japanese yen currency as traders await the outcome of the latest Sino-US trade talks. Bullish trade talk news may push the USDJPY pair towards the 110.00 level, while bearish news may lead to losses towards the 108.10 level. The MACD indicator on the four-hour time frame has reached neutral levels.

The USDJPY pair is bullish while trading above the 109.10 level, key technical resistance is found at the 109.40 and 110.00 levels.

If the USDJPY pair trades below the 108.80 level, sellers may test towards the 108.40 and 108.10 support levels.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.14738
Open: 1.14401
% chg. over the last day: -0.17
Day's range: 1.14364 – 1.14783
52 wk range: 1.1214 – 1.2557

EUR keeps moving sideways. The technical picture is ambiguous. The local support and resistance levels are at 1.14500 and 1.14850 respectively, you should open positions from these levels. The investors are waiting for the relevant info regarding the US/China negotiations as well as the FOMC Minutes. The negotiations were prolonged by an addtional year.

At 21:00 (GMT+2:00) we expect the publication of FOMC Minutes. The financial market participants will be evaluating the comments and rhetorics of the Central Bank representatives regarding the further key interest rate growth. Earlier the Head of Federal Reserve Jerome Powell mentioned that they correct the monetary policy according to the economic reports.

The price fixed above 50 MA and 200 MA which points toward the power of the buyers.

The MACD histogram started to rise, which indicates a bullish mood.

The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line which gives a signal to buy EUR/USD.

Trading recommendations

Support levels: 1.14500, 1.14250, 1.14000
Resistance levels: 1.14850, 1.15000

If the price fixes above the resistance level of 1.14850 expect further growth of the currency pair. The movement will tend toward 1.15250-1.15500.

Alternatively the quotes can descend toward 1.14250-1.14000.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.27767
Open: 1.27115
% chg. over the last day: -0.33
Day's range: 1.27065 – 1.27487
52 wk range: 1.2438 – 1.4378

The GBP/USD currency pair is consolidating. There is no defined trend. The local support and resistance levels are 1.27100 and 1.27550, you should open positions from them. The Brexit conundrum remains in the spotlight, the vote on the UK leaving the EU is scheduled for January, 15.

You should keep an eye on the statements by the Head of the Bank of England - 17:30 (GMT+2:00).

The indicators do not provide precise signals, the price fixed between 50 МА and 200 МА.

The MACD histogram is close to 0.

The Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which gives a signal to sell GBP/USD.

Trading recommendations

Support levels: 1.27100, 1.26500, 1.26000
Resistance levels: 1.27550, 1.28000

If the price fixes above the 1.27550 mark, expect further growth toward the round 1.28000.

Alternatively the quotes can descend toward 1.26750-1.26500.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.32962
Open: 1.32739
% chg. over the last day: -0.40
Day's range: 1.32233 – 1.32779
52 wk range: 1.2248 – 1.3664

The USD keeps losing positions against the CAD. The demand for the raw resource currencies grew due to the lack of progress regarding the US/China trading conflict. The quotes are consolidating in the 1.32250-1.32700 range, you should open positions from these levels. Investors are waiting for the Bank of Canada decision regarding the key interest rate at 17:00 (GMT+2). Experts are thinking that the regulator will leave the positions the same.

The Economic News Feed for 09.01.2019 is calm.

The price fixed below 50 MA and 200 MA which points to the power of the sellers.

The MACD histogram is in the negative zone and below the signal line, which gives a signal to sell USD/CAD.

The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which points toward the correction of the USD/CAD pair.

Trading recommendations

Support levels: 1.32250, 1.32000
Resistance levels: 1.32700, 1.33100, 1.33650

If the price fixes below 1.32250, expect further growth of toward 1.31750-1.31500.

Alternatively the quotes can correct toward 1.33000-1.33400.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 108.700
Open: 108.727
% chg. over the last day: +0.03
Day's range: 108.700 – 109.000
52 wk range: 104.56 – 114.56

The USD/JPY has stabilized. The USD/JPY quotes are consolidating. The investors are waiting for additional drivers. The key support and interest rates are 108.300 and 109.000, positions should be opened from the key levels. The FOMC Minutes are in the spotlight. You should keep an eye on the US/China trading conflict.

The Economic News Feed for 09.01.2019 is calm.

Indicators do not provide precise signals, the price fixed between 50 MA and 200 MA.

The MACD histogram is in the positive zone but below the signal line, which gives a weak signal to buy USD/JPY.

The Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which points toward a bearish sentiment.

Trading recommendations

Support levels: 108.300, 107.400, 106.500
Resistance levels: 109.000, 109.500

If the price fixes above the round 109.000 expect further growth toward 109.500-109.750.

Alternatively the quotes can descend toward the round 108.000.

The US dollar recovered some losses against a basket of major currencies after it became known that the US and China decided to extend the talks for another day. It improved investors' sentiment and gave a signal that countries could resolve their disagreements soon. The dollar index (#DX) closed yesterday in the positive zone (+0.26%). Also, financial market participants expect the statement by Donald Trump regarding the future work of the US government.

It became known that the British government had planned a vote of the House of Commons concerning the Brexit bill on January 15. If the bill is not supported, the UK may remain without an agreement at all and the process of a soft Brexit will be undecided. Today, the attention of financial market participants is focused on the Bank of Canada meeting, as well as the publication of the FOMC minutes. It is expected that the Central Bank of Canada will keep the key marks of monetary policy at the same level.

The "black gold" prices are growing in the hope of a breakthrough in trade relations between the US and China. At the moment, futures for the WTI crude oil are testing the mark of $50.25 per barrel. At 17:30 (GMT+2:00), a report on crude oil inventories will be published in the US.

Market Indicators

Yesterday, the bullish sentiment was observed in the US stock market: #SPY (+0.94%), #DIA (+1.09%), #QQQ (+0.90%).

The 10-year US government bonds yield is recovering. Currently, the indicator is at the level of 2.71-2.72%.

The news feed on 09.01.2019:

Bank of Canada interest rate decision at 17:00 (GMT+2:00);

FOMC meeting minutes at 21:00 (GMT+2:00).

We also recommend paying attention to the speech by the Bank of England Governor Carney.

EURJPY has been edging higher since the price found strong support at the 21-month trough, registered on January 3 and surpassed the 38.2% Fibonacci retracement level of the downleg from 133.10 to 118.57, around 124.10. It is worth mentioning that the 20-simple moving average (SMA) is ready to post a bullish cross with the 40-SMA in the 4-hour chart, suggesting further gains. According to the RSI, the short-term bias seems to be positive as it holds in the bullish area, while the stochastic oscillator is approaching the overbought territory.

If the market continues to push the pair even higher, prices could challenge the 125.55 resistance level, taken from the August on August 17. More advances could likely open the way for the immediate resistance of the 50.0% Fibonacci of 125.85, while traders’ attention could turn on the 127.10 hurdle, identified by the peak on December 27.

On the flipside, if the market manages to turn to the downside again and slips back below the 38.2% Fibonacci and the moving averages in the near term, this could send prices until the 122.80 support level before touching the 23.6% Fibonacci of 122.00.

Overall, EURJPY has been in a bullish correction mode, however, in the longer timeframe the price remains in a strong bearish structure following the pullback on 133.10.

Equities are rallying on optimism that the US-China trade dispute might be resolved. A scheduled two days of negotiation was extended by a third day, suggesting things are going well. The arrival of US officials from energy, agriculture and treasury departments is a good sign that discussions are becoming more explicit on topics such as intellectual property and trade deficit. The next step will come at the 2019 World Economic Forum in Davos (22 January), where US President Donald Trump and China Vice-President Wang Qishan will meet.

On the other hand, recent economic releases have pointed to a drop in growth, including a slowdown in manufacturing, with the US ISM manufacturing index at its lowest in 25 months. China faces similar trends, with its manufacturing PMI at its lowest in 19 months. The FX market remained stable, aside from the Japanese yen, which retreated.

EUR/USD

Current level - 1.1466

The lack of trend dynamics here leaves the situation unchanged and the bias is neutral within the 1.1410 - 1.1500 range.

USD/JPY

Current level - 108.82

The bias remains positive, for a rise towards 110.20 area. Initial support lies at 108.50, followed by the crucial low at 108.00.

GBP/USD

Current level - 1.2766

Due to the corrective structure of the rebound above 1.2710, I favor an intraday slide , through the mentioned support, towards 1.2615 area. Crucial on the upside is 1.2810.

The mood across financial markets remained positive this morning as investors shrugged off Donald Trump's Oval Office speech on border security to remain focused on ongoing trade developments.

A sense of optimism over trade talks between the United States and China ending on a positive note is clearly supporting global risk sentiment and this continues to be reflected on global equities. Although a breakthrough deal between both sides seems premature, any encouraging signs of cooperation and prospects of talks leading to more higher-level negotiations will be a welcome development for financial markets.

While global stocks are likely to benefit from the risk-on sentiment in the near term, rising geopolitical risks are poised to create headwinds down the road. With little progress seen in resolving the partial US government shutdown and Donald Trump's speech on immigration compounding uncertainty, the many ingredients for a selloff across markets seem to be in place. An unfavourable situation where trade talks defy expectations by concluding on a sour note is poised to trigger risk aversion – ultimately placing riskier assets including equities in the firing line.

In the United Kingdom, the Pound remains at the mercy of Brexit noise and the ongoing parliamentary debate over the Brexit deal ahead of the meaningful vote on January 15. Uncertainty over the nature of Brexit continues to cloud the Pound's outlook with investors waiting on the parliamentary vote for direction. Whatever the outcome of the vote, it will certainly have a lasting impact on Sterling. On the macroeconomic front, Bank of England Governor Mark Carney will be in the spotlight later today discussing the future of money at the Bank of England Future Forum. Carney is likely to choose his words wisely during the Q&A session on the back of Brexit uncertainty and drama in Westminster.

The story defining the Dollar's weakness in recent days continues to revolve around dovish comments from Fed Chair Jerome Powell and speculation over the Fed taking a pause on rate hikes this year. With Powell stating that the Fed “will be patient” and flexible towards raising rates, investors simply interpreted this as the Fed taking a pause on monetary tightening this year. Although December's impressive jobs report eased fears over the health of the US economy, the Dollar remains at risk of weakening further if future data disappoints. The Dollar is seen having a muted reaction to this evening's FOMC meeting based on the fact that it could be slightly dated when compared to recently dovish comments from Powell. In regards to the technical, the Dollar Index is under pressure on the daily charts. Sustained weakness below 96.00 is poised to open a path back towards 95.50 and 95.25, respectively.

The pair maintains positive tone on Wednesday after Tuesday’s Doji on fresh risk-on mode, but gains were limited by headwinds from strong barriers at 109.15/20 (50% retracement of 113.70/104.59 / daily Kijun-sen) with resistance being reinforced by falling 10SMA (109.36).

North-heading momentum is supportive, with rising hourly cloud continuing to underpin, but overall bearish daily techs and slow stochastic entering overbought zone and warns of stall.

Near-term price action holds between daily Tenkan-sen (107.97) and Kijun-sen (109.20) with break of either side to generate firmer direction signal.

Sustained break above 109.15/36 zone would unmask psychological 110.00 barrier at 110.22 (Fibo 61.8% of 113.70/104.59).

Bearish scenario on break below Tenkan-sen line would risk dip towards 107.00 zone.

Res: 109.20, 109.36, 110.00, 110.22
Sup: 108.68, 108.07, 107.97, 107.51

Cable is bid in early Wednesday's trading and sidelined the downside risk after Tuesday's close in red which formed bearish outside day pattern.

Advance on fresh risk appetite re-tested falling 55SMA (1.2779) which capped the action in past two days but was so far unable to break higher.

Modest bullish bias on rising momentum and bullish setup of daily 10/20/30 SMA's could be diminished by overbought slow stochastic, with repeated close below 55SMA to keep the downside vulnerable.

Brexit plan vote next week remains the key event and fears that the plan would not pass the parliament, could keep the upside attempts limited.

Rising 10SMA offers initial support at 1.2791, while extension and close below 20SMA (1.2654) would generate stronger bearish signal.

Res: 1.2779, 1.2796, 1.2814, 1.2850
Sup: 1.2709, 1.2691, 1.2654, 1.2615