Dec 22 2020 0
USD recovered strongly at the opening session of the week but then quickly weakened again and dropped to the lowest bottom in recent years. This dramatic upheaval caused but significant change.
Latest updates
- US Congressional leaders reached agreement on Sunday on a $900 billion stimulus package for the growing economy and individuals affected by the coronavirus epidemic.
- The voting process for the new US fiscal stimulus bill is taking place in the House of Representatives.
- The dollar rose and the pound slumped on Monday as Britain was on the verge of a complete blockade of the country. According to the government's top scientific advisers, they warn that a new variant of the Covid-19 coronavirus has been discovered capable of transmitting "out of control".
- The reason for the strengthening of the dollar is believed to come from the argument that Janet Yellen, who is about to be the next US Treasury Secretary, could return to defend the traditional US policy of a strong dollar, after 4 years of the Trump administration weakening it.
USD/JPY chart
Another bull trap was created around 104. Anyone who entered the order early may have caught it. The emergence and strong rejection of the bull trap, forming a bearish pinbar pattern on the daily chart, has underpinned the previous decline. Hence, we can use these new signals to trade. You might consider short orders, and the initial target will be the low of December, further 102.4.
EUR/USD chart
The price fell as expected after the bearish signals we listed yesterday. The target at 1.215 has also been approached and the price has created a bear trap around this price range and moved up to fill the gap. This move makes the possibility of price return to uptrend is very high. Consider buy orders when the price breaks above 1.227, then the target will be around 1.23 and then 1.24. However, in the coming days, liquidity may be thin, so it is not excluded that the price will move sideways around the current peak.
GBP/USD chart
The price fell sharply to the 1.32 zone and filled the gap as expected. I hope you closed your suggested positions yesterday. At present, the price has returned to the gap at the beginning of the week but has not completely filled, accompanied by a very long lower shadow on the daily chart, showing a very strong buying force. Hence, in the short term, it is likely that the price will continue to go up.
USD/CAD chart
After completing the double bottom pattern, the price quickly broke the 1.28 barrier and moved up to the 1.295 zone as expected. This strong rejection around 1.295 created a bearish pattern on the daily chart. Therefore, it is likely that the price will re-test the 1.280 transition zone. Subsequent price action around this zone will give us clues as to whether to continue buying or not.
AUD/USD chart
After the down-gap, the price broke the 0.758 switch and fell sharply to the bottom of the rising channel and quickly bounced up. This movement created the dragonfly doji pattern on the daily chart. However, we can hardly take advantage of this signal at the moment. Only when the price breaks above the peak of 0.765 should we consider new buy orders.
