The Analytical Overview of the Main Currency Pairs on 2025.01.21

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0283
• Prev. Close: 1.0415
• % chg. over the last day: +1.28 %

After Donald Trump’s inauguration as US President and his acceptance speech, the Dollar Index continued its daily decline and fell almost 1% to below 108.5 on Monday. During the speech, the president issued a number of executive orders, but refrained from making specific changes to US trade policy. The dollar fell sharply earlier in the session as reports emerged that tariffs would not be imposed on Trump’s first day in office, contrary to initial promises. The dollar’s fall led to a sharp rise in the euro.

Trading recommendations

• Support levels: 1.0354, 1.0299, 1.0265, 1.0238, 1.0223
• Resistance levels: 1.0434, 1.0458

The EUR/USD currency pair’s hourly trend has changed to an upward trend. The price has confidently consolidated above the priority level change. The price reached the resistance level of 1.0434, where sellers started to act. In the Asian session today, the US dollar recovered some of its positions, which led the euro down to 1.0354. The intraday bias remains for buyers, so it is recommended to focus on longs. Buying trades are best sought after a test of liquidity below 1.0354, with targets to renew the high of the week. There are no optimal entry points for selling right now.

Alternative scenario:

if the price breaks the support level of 1.0265 and consolidates below, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2172
• Prev. Close: 1.2328
• % chg. over the last day: +1.28 %

Today, the UK will release a number of labor market data. The unemployment rate is expected to remain at 4.3%, while the quarterly wage rate is expected to rise from 5.2% to 5.6%. A rise in wages could decrease the probability that the Bank of England will make a rate cut early next month, which could provide a short-term boost to the British currency. However, if the data on the labor market is worse than expected, the GBP may be under additional pressure.

Trading recommendations

• Support levels: 1.2255, 1.2158
• Resistance levels: 1.2322, 1.2376, 1.2507

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish, but close to change. Technically, the British pound has not been able to break the trend like the euro. This indicates a correlation divergence, which is a sign of a reversal, not a continuation of the trend. Price tested liquidity above 1.2322, after which there was a sharp bearish initiative. Captured liquidity was distributed below 1.2255 where buyers are trying to retake the initiative. The MACD indicator is positive but momentum is behind the sellers. Under these market conditions, we can look for buying from 1.2255, after a new test. A breakdown of 1.2255 will open the price to 1.2158.

Alternative scenario:

if the price breaks through the resistance level at 1.2376 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 156.22
• Prev. Close: 155.31
• % chg. over the last day: -0.39 %

The Japanese yen strengthened to 155 per dollar on Tuesday, hitting a one-month high amid bets that the Bank of Japan will raise interest rates this week after hawkish comments from Central Bank officials. That would push Japan’s short-term borrowing costs to 0.5%, the highest since the 2008 global financial crisis. The Bank of Japan is also likely to revise its inflation prognosis upward as optimism grows that wage growth will help Japan sustainably meet its 2% inflation target.

Trading recommendations

• Support levels: 154.93, 154.34
• Resistance levels: 156.74, 157.18, 158.19

From a technical point of view, the medium-term trend of the USD/JPY currency pair is bearish. The price reached the support level of 154.93, where after the liquidity test, there was a buyers’ reaction. The MACD indicates divergence. In this intraday scenario, we should look for buying with the aim of updating the high of the day. For buyers, it is important that the price does not update the low of the day today. There are no optimal entry points for selling right now.

Alternative scenario:

if the price breaks above the resistance at 158.19, the uptrend is will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2701
• Prev. Close: 2711
• % chg. over the last day: +0.37 %

Gold prices held above the $2,700 per ounce mark on Monday, helped by inflation expectations, Federal Reserve policy changes and fiscal uncertainty. President Trump’s declaration of an energy emergency, emphasizing the expansion of oil and gas production, could lower energy costs and ease inflationary pressures, potentially reducing gold’s appeal as an inflation hedge. However, fiscal and trade policy uncertainty, combined with the backtracking on renewable energy and the Paris Agreement, supports safe-haven gold demand.

Trading recommendations

• Support levels: 2717, 2703, 2690, 2666, 2655, 2636, 2622, 2603, 2570
• Resistance levels: 2733, 2762

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Gold continues to rise in price. Currently, the price is trying to test the resistance level of 2733, where there may be counter-selling. The MACD divergence is hinting at it. The breakout of this level will open the price dearly to 2762. However, if the sellers take the initiative here, it may trigger a strong sell-off, as there is a large liquidity accumulation above 2733.

Alternative scenario:

if the price breaks below the support level of 2656, the downtrend will likely resume.