USD gets stronger due to new virus strain

USD gets stronger due to new virus strain

Fundamentals

  • The market sentiment deteriorated as the new Covid-19 variant engulfed the UK. Other countries closed their borders to stop the virus spread. As a result, riskier assets such as S&P 500, oil, the AUD, the NZD dropped.
  • As for the US stimulus package, the process has almost ended. The last step is the signature of Donald Trump, and a $900 billion US pandemic relief package will be unveiled. That should underpin stocks and improve the market sentiment, but “will do little to accelerate the arrival of an economic recovery,” said JPMorgan.
  • The pound is weakening amid the Brexit talks and the new lockdown in the UK. Travel bans to contain the new coronavirus variant also deteriorated the market sentiment. However, officials claim that the existing Covid-19 vaccines should provide protection against the new virus strain as well.
  • All eyes on the final US GDP at 15:30 MT time and the US consumer confidence at 17:00 MT time.
Watch our daily trading plan!

Technical tips

EUR/USD

The most traded pair dropped enormously yesterday, but the 50-period moving average stopped it from further falling one more time. If the pair tumbles below the psychological mark of 1.2200, the way down to the 50-MA at 1.2180 will be open. However, the pair shouldn’t cross this strong support as it has failed to do it so far, that’s why we can expect the pullback to the upside. Resistance levels are 1.2240 and 1.2270.

EURUSDH4.png

GBP/USD

GBP/USD is still trading in a descending channel despite all the headwinds. Now it’s trading sideways near the key psychological mark of 1.3400. If it jumps above yesterday’s high of 1.3450, the way up to the next resistance of 1.3500 will be open. In the opposite scenario, if it drops below the 200-hour moving average of 1.3300, it may drop to the next support of 1.3200.

GBPUSDH4.png

Gold

XAU/USD is moving in a descending channel. It touched the intersection of the top of its range and the 100-period MA near $1 915, therefore the way up was closed, and the price went down. If it breaks through yesterday’s low of $1 860, it may fall to the low of December 14 at $1 825. Resistance levels are $1 890 and $1 915.

XAUUSDDaily.png

WTI oil

Oil dropped after the new virus variant had been found in the UK. It has approached the key support of $46.50. It’s unlikely to break this level by the first attempt as it has failed to cross this level several times this month already. Besides, the 100-period MA lays at the same level, which should limit the further falling as well. If it manages to break it, the doors will be open to the low levels of early December at $45.50. To trade WTI oil with FBS, you need WTI-21G, which expires on January 19. 

WTI_OilH4.png

TRADE NOW

Similar

Market Crash Incoming?
Market Crash Incoming?

This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.

What Currency Will Overperform?
What Currency Will Overperform?

S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.

Latest news

Crucial News For The Following Week
Crucial News For The Following Week

Consumer Price Index, Existing Home Sales, US Fed rate decision - all of these things we will discuss in our new review. Don't miss it out!

Focus on Banks' Meeting and NFP
Focus on Banks' Meeting and NFP

The RBA and the Bank of Canada will add volatility to the AUD and the CAD, while USD is expected to be boosted by the Non-farm payrolls.

Deposit with your local payment systems

Feel the Team Spirit

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera