FX.co ★ Technical recommendations for EUR/USD and GBP/USD on January 5

EUR/USD

The strong daily decline and the long upper shadow of the weekly candle prevented us from closing the previous year as optimistic as possible. The bullish traders tried to correct the situation with the help of an upward gap at the opening of trading in 2021, but they need to sharply consolidate above last year's high (1.2310) in order for a reliable result and prospects to appear. Overcoming this level will open up the possibility for the bulls to rise to such nearest pivot points such as 1.2555 (historical level) and 1.2703 - 1.2897 (monthly target for the breakdown of the Chinkou price chart). In the current situation, the daily short-term trend which is located today at 1.2231, and the historical level of 1.2170 retain their significance among the main support levels.

The pair is currently testing the key support of 1.2263-59 (central pivot level + weekly long-term trend) in the smaller time frame. A consolidation below which will give preference to the bears. Here, we consider the supports of the classic pivot levels at 1.2216 - 1.2184 - 1.2137 today. The key levels (1.2263-59) being maintained on the bulls' side will provide them slight advantage in the hourly time frame. The main task is to break through the level of 1.2310. Today, the resistance of the classic pivot levels are located at 1.2342 and 1.2374. They will serve as further pivots for an intraday rise.

GBP/USD

The bulls managed to close 2020 as positively as possible, recording a new annual high. They updated last year's high during the first working day of the New Year, but then took a pause at the end of the day, which resulted in a pair's correctional decline.

Today's accumulation of supports can be noted in the areas of 1.3538 - 1.3481 (historical levels + daily Tenkan + daily Fibo Kijun) and 1.3404 - 1.3350 (weekly Tenkan + daily Kijun + daily Fibo Kijun + monthly Senkou Span A). A consolidation below these support levels will indicate a full-fledged downward correction in the higher time frames, from which new prospects will unfold.

The pair is in the attraction zone for key levels of 1.3603 - 1.3571 (central pivot level + weekly long-term trend) in the smaller time frame. If the decline continues, the pivot points within the day will be the support levels of 1.3503 - 1.3440 - 1.3340. In turn, the resistance levels are located at 1.3666 - 1.3766 - 1.3829 today.

Ichimoku Kinko Hyo (9.26.52), Pivot Points (classical), Moving Average (120)