07 January 2020

Euro-zone inflation: Tuesday, 10:00. November’s Consumer Price Index figures were quite encouraging. Headline CPI stabilized at 1% yearly while Core CPI accelerated to 1.3%, matching the peak 2019, which was the highest since 2013. The preliminary release for December 2019 is forecast to show that underlying inflation remained at 1.3% while headline prices accelerated to 1.3%. The European Central Bank is watching these figures.

ISM Non-Manufacturing PMI: Tuesday, 15:00. America’s services sector expanded at a satisfactory pace throughout 2019, reaching 53.9 points in November – above the 50-point threshold that separates expansion from contraction. An increase to 54.5 points is on the cards for December. Apart from providing a snapshot on the sector, the publication serves as a hint towards Friday’s jobs report.

EUR

Euro-zone inflation

USD

ISM Non-Manufacturing PMI

  • EURUSD

The EURUSD is in a downtrend in general with a midterm uptrend. At the present, the pair is facing a strong resistance level that could be found at 1.1240. Any move above that level (a breakout with a daily close) will be considered as a positive sign that could push the price of the pair upwards towards the level of 1.1250 and 1.1300 respectively.  I still prefer selling the EURUSD from every resistance level it meets, keeping in mind that bearish evidence is needed to confirm the expected decline. Expected targets of the downside scenario are as follows: 1.1100 – 1.1050.

Resistance levels: Support levels: Recommended:
▪ 1.1350
▪ 1.1300
▪ 1.1250
▪ 1.1050
▪ 1.1000
▪ 1.0950
We are bearish as long as the pair is traded below the level of 1.1250.
  • GBPUSD

Again, the pair could return above the 1.3300 strong resistance level which can open the door for further upward movement during the week. For this move to be confirmed, we need to see at least a daily close above the mentioned above resistance level. If that happens, we can go long targeting the level of 1.3400 followed by the closest resistance level after it that is 1.3500. On the downside, if the pair shows up bearish behavior below the level of 1.3300, then a decline is expected that we might see 1.3100 followed by 1.3000.

Resistance levels: Support levels: Recommended:
▪ 1.3400
▪ 1.3350
▪ 1.3300
▪ 1.2880
▪ 1.3000
▪ 1.2850
Waiting for the pair to confirm its next movement.
  • GOLD

The general trend of the Gold is bullish. Therefore, we anticipate that the pair might continue going upwards to reach the level of 1579 during the week. This scenario is conditioned by the continuation of trading above the level of 1553. Moving below the support level of 1553 gives the Gold an opportunity to reverse the trend which is still bullish. Bears could be in control after a daily close below the 1553 support level which might cause the pair to continue going downwards towards the level of 1545 followed by 1540.

Resistance levels: Support levels: Recommended:
▪ 1579
▪ 1575
▪ 1553
▪ 1545
▪ 1540
We are bullish as long as the pair is traded above the level of 1553.
  • AUDUSD

Bears are in a very clear control as could be seen on the chart above. Before thinking about entering the market, we must find a good station. Therefore, we believe that waiting for the pair to reach the support level of 0.6750 would be the best thing to do. The support area located among the level of 0.6750 and 0.6685 is where we can look for bullish evidence to go long. Better to wait for the opportunity to be fully formed.

Resistance levels: Support levels: Recommended:
▪ 0.7123
▪ 0.6988
▪ 0.6941
▪ 0.6750
▪ 0.6685
▪ 0.6650
Waiting for the pair to reach the support area mentioned in the report.
  • GBPJPY

Lower highs and lower lows, suggesting a strong control of sellers. It is worth waiting for the pair to reach the resistance level of 144.50 which is where we can go short in case bearish evidence shows up below it. Our targets are: 141 followed by 140. A breakout above the resistance level of 144.50, could open the door for further upwards movement during the week that it might reach the level of 146.50.

Resistance levels: Support levels: Recommended:
▪ 146.50
▪ 146.00
▪ 144.50
▪ 141.00
▪ 141.50
▪ 140.00
Waiting for the pair to reach the resistance level of 144.50.

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