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GBPUSD – technical overview

The recent breakout through the 2019 high at 1.3515 is significant and now sets the stage for the next major upside extension back towards 1.4000. Technical studies are running a little stretched on the daily chart and as such, there is room for some setbacks before the market starts to make its way higher. But look for setbacks to now be very well supported ahead of 1.3000.

• R2 1.3712 – 1 March low (2018) – Strong
• R1 1.3712 – 15 January/Multi-month high – Medium
• S1 1.3451 – 11 January low – Medium
• S2 1.3430 – 28 December low – Medium

GBPUSD – fundamental overview

The Pound has been a standout outperformer of late, with the UK currency holding well as many believe the UK to be further along on the pandemic timeline. And all of this comes with the Brexit deal also out of the way. Key standouts on today’s calendar include UK GDP, trade, industrial production and manufacturing production, and US retail sales, industrial production, empire manufacturing, business inventories, producer prices and Michigan sentiment.

USDJPY – technical overview

The latest breakdown below 104.00 opens the door for a deeper round of setbacks. Initial support comes in just ahead of 101.00, in the form of the 2020 low, which guards against the major psychological barrier at 100.00 and the 2016 low around 99.00. At this point, it would take a clear break back above 106.00 to take the immediate pressure off the downside.

• R2 104.77 – 24 November high – Strong
• R1 104.41 – 11 January high – Medium
• S1 103.00 – Figure – Medium
• S2 102.60 – 6 January low  – Strong

USDJPY – fundamental overview

Japan's MOF announced that the cabinet has approved the use of Yen 741.8 billion of reserve funds to help businesses asked to close early under the state of emergency. Meanwhile, ex-BOJ executive director Maeda said that the BOJ's upcoming policy assessment in March is likely to signal a pause in ETF purchases so long as stocks stay buoyant. Maeda is also of the view that the BOJ won't bolster it's monetary stimulus despite the re-imposition of a state of emergency in 11 prefectures. Key standouts on today’s calendar include US retail sales, industrial production, empire manufacturing, business inventories, producer prices and Michigan sentiment.

EURCHF – technical overview

Lots of sideways price action here, with no clear directional insight. For the most part, price action has been confined between 1.0600 and 1.0900, and it will take a clear break above or below for an indication of the next big move.

• R2 1.0916 – 5 June/2020 high – Strong
• R1 1.0900 – Figure – Medium
• S1 1.0736 – 10 December low – Medium
• S2 1.0660 – 4 November low – Strong

EURCHF – fundamental overview

The SNB remains uncomfortable with Franc appreciation and continues to remind the market it will need to be careful about any attempts at trying to force an appreciation in the currency. But the SNB will also need to be careful right now, as its strategy to weaken the Franc is facing headwinds from a less certain global outlook. Any signs of renewed risk liquidation will likely invite a very large wave of demand for the Franc that will put the SNB in the more challenging position of needing to back up its talk with action, that ultimately, may not prove to be as effective as it once was, given where we're at in the monetary policy cycle.

AUDUSD – technical overview

Technical studies have turned up in recent months, after the market traded down to its lowest levels since 2003 in 2020. There is evidence of a longer-term bottom following the latest push back through 0.7000, though at this stage, there is risk for a pullback to allow for shorter term studies to unwind. Next big resistance comes in at 0.8000. Setbacks should now be well supported ahead of 0.6800.

• R2 0.7900 – Figure – Strong
• R1 0.7821 – 6 January/Multi-month high – Medium
• S1 0.7643 – 4 January low – Medium
• S2 0.7558 – 28 December low – Medium

AUDUSD – fundamental overview

Some profit taking on Aussie longs into the end of the week, presumably on the back of the latest wave of risk off in markets. Key standouts on today’s calendar include US retail sales, industrial production, empire manufacturing, business inventories, producer prices and Michigan sentiment.

USDCAD – technical overview

Has been in the process of correcting since topping out earlier this year above 1.4600. At this stage, with the correction well extended, the market is likely to find solid support into the 1.2500 area ahead of a resumption of gains. Ultimately, only a weekly close below 1.2500 would suggest otherwise.

• R2 1.3000 – Psychological – Strong
• R1 1.2957 – 21 December high – Medium
• S1 1.2625– 15 January/Multi-month low – Medium
• S2 1.2600 – Figure – Strong

USDCAD – fundamental overview

Oil's ability to hold up and solid economic data out of Canada earlier in the week have been responsible for the Canadian Dollar's fresh run of multi-month highs. Key standouts on today’s calendar include US retail sales, industrial production, empire manufacturing, business inventories, producer prices and Michigan sentiment.

NZDUSD – technical overview

There's a case to be made for a meaningful bottom, after the market bottomed out in 2020. The recent break back above 0.7000 further strengthens this outlook, with the market back in uptrend mode as per the weekly Ichimoku cloud and focused on pushing back towards longer-term resistance in the 0.7500 area. Any setbacks are expected to be well supported ahead of 0.6500.

• R2 0.7400 – Figure – Strong
• R1 0.7316 –  6 January/Multi-month high – Medium
• S1 0.7146 – 11 January low – Strong
• S2 0.7003 – 21 December low – Medium

NZDUSD – fundamental overview

The RBNZ will restart it's QE program next week with a tapering of bond purchases. Key standouts on today’s calendar include US retail sales, industrial production, empire manufacturing, business inventories, producer prices and Michigan sentiment.

US SPX 500 – technical overview

Longer-term technical studies are looking quite exhausted and the market is showing signs of wanting to roll over after racing to another record high. Look for rallies to be well capped ahead of 3900, with a break back below 3600 to strengthen the outlook.

• R2 3900 –  Psychological – Strong
• R1 3833 – 8 January/Record high – Medium
• S1 3751 – 7 January low – Medium
• S2 3663 – 4 January low – Strong

US SPX 500 – fundamental overview

We're trading just off fresh record highs, and yet, with so little room for additional central bank accommodation, given an already depressed interest rate environment, the prospect for sustainable runs to the topside on easy money policy incentives and government stimulus, should no longer be as enticing to investors. Meanwhile, ongoing worry associated with coronavirus fallout should weigh more heavily on investor sentiment in 2021.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs and an acceleration beyond the next major psychological barrier at 2000. Setbacks should now be well supported above 1700. Longer-term technical studies are however in the process of consolidating, with the market in search of a higher low ahead of a bullish continuation.

• R2 1966 – 9 November high – Strong
• R1 1960 – 6 January high – Medium
• S1 1817 – 11 January low – Medium
• S2 1765 – Previous resistance – Strong

GOLD (SPOT) – fundamental overview

The yellow metal continues to be well supported on dips with solid demand from medium and longer-term accounts. These players are more concerned about exhausted monetary policy, extended global equities, and coronavirus fallout. All of this should keep the commodity well supported, with many market participants also fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an unnerving climax.

BTCUSD – technical overview

The short-term outlook should be less constructive in the aftermath of this latest wave of parabolic price action through $40,000. Key indicators are unwinding from extreme overbought territory across multiple timeframes, warning of a period of deeper correction and consolidation before any meaningful bullish continuation can be expected. At the same time, look for setbacks to now be well supported into the $20,000 area.

• R2 45,000 – Psychological – Strong
• R1 41,987 – 8 January/Record high – Medium
• S1 27,680 – 4 January low – Strong
• S2 21,913 – 21 December low – Strong

BTCUSD – fundamental overview

The break of 30k has turned heads and talk of the asset still being grossly undervalued has inspired another surge in demand through 40,000. Overall, ongoing adoption, continued innovation in the space, a warmer regulatory environment and healthy institutional investor appetite have all contributed to this latest wave of strong demand leading to fresh record highs into 2021. Market participants are also drawn to the asset as it proves to be an attractive store of value at a time when governments and central banks continue to print money at unprecedented rates.

BTCUSD - Technical charts in detail

ETHUSD – technical overview

The market has raced up to its highest levels since January 2018, with the break opening this next major upside extension towards the record high at 1420. At the same time, with daily studies showing overextension, there could be a period of consolidation and deeper correction that sets in before a meaningful bullish continuation. Setbacks should now be well supported into the 600-800 area.

• R2 1420 – Record high, January 2018 –  Very Strong
• R1 1351 – 10 January high – Medium
• S1 905 – 11 January low – Medium
• S2 830 – Previous resistance  – Strong

ETHUSD – fundamental overview

Bitcoin is getting all of the attention, though it's Ether that outperformed its older cousin in 2020. All of the healthy investor risk appetite in global markets has helped to fuel demand for innovation and the Ethereum blockchain is very much at the centre of this when it comes to cryptocurrencies. At the same time, we would be concerned about a bubble in the defi space, with valuations for these projects soaring to alarming heights. We've also warned that any downturn in global sentiment is likely to have a more significant negative impact on the more risk correlated Ether.