DAILY TECHNICAL ANALYSIS FOR DECEMBER 20, 2022petar skakalov
Current level – 1.0604
The first day of the week for the single European currency was in the range. The lack of data in the macroeconomic calendar did not encourage traders to overcome the formed resistances and supports. As the European session opened, we saw a daily high of 1.0657 – a level that has repeatedly played the role of resistance. After reaching it, the bears took control and drove the pair to the bottom of 1.0575. However, support was found there and the day ended around 1.0604. Today, price action is likely to be driven by the German manufacturing inflation data, which is expected at 7:00 (GMT), and the EU consumer confidence at 15:00 (GMT). Whether the euro will break out of its range and find a clearer direction, depends on the interest in the accumulated data.
Current level – 136.87
On Monday, movements in the yen were in favour of the dollar. The day started with reaching the key 135.73 level and bouncing off it around the opening of the European session. The moves up continued to 137.13 where they met their resistance and the day ended around 136.87. In the early hours of today, the Bank of Japan sparked chaos on the market with its decision to change the yield control policy in order to improve market conditions, while remaining accommodating with an increase of government bond purchase to 9 trillion yen monthly. Despite this, the yen gained more than 2% against the greenback because with a wider yield range on the 10y bonds – 0.5% vs 0.25% previously – the BOJ will have to buy less bonds in order to abide by the bond buying limit. At the time of writing, the market seems to be pricing this as a monetary policy pivot, but the odds are it is a move aiming to strengthen the yen. Volatility is sure to continue through the day and a corrective move towards the levels at 135.00 is likely.
Current level – 1.2151
On the first day of the trading week,the Cable failed to break out of the formed range. The day started and continued with low volatility, but managed to reach a daily high of 1.2236 shortly after the London session opened. The level played the role of resistance and in the next few hours we saw again the reaching of the 1.2115 level. The pair found support there and the day ended around 1.2151. Today, there is no data to push pound traders into a trend, but the expected publication of data on the U.S. real estate sector might give direction to the stock market if the dollar reacts to it.
Midday update for Gold
Gold price resumes its positive trading clearly to reach our first waited target at 1810.00, and we expect the continuation of the bullish bias in the upcoming sessions to test 1824.50 as a next target, to continue suggesting the bullish trend on the intraday basis unless breaking 1776.25 and holding with a daily close below it.
The expected trading range for today is between 1776.00 support and 1810.00 resistance.
The expected trend for today: Bullish
Source: Technicl analysis