By Furqan Fakar 

Sell EUR/USD – MT is Bear Normal

Daily chart.

Technical Overview: Price was rejected after fulfilling our target price and is now testing resistance at 1.1950. While the pair trades below this level, I will look for a sell setup aiming for 1.1712.. 

Fundamental Overview: The rebound of the single currency was capped by worries around the pandemic situation and the rebound in US bond Yields. With a lockdown in Germany, these concerns may continue to weigh on the EUR. 

With the increase in the US bond Yields and a reopening economy, I expect demand for the greenback to continue. We are expecting key data out of both the US and the Euro zone. Better than expected data in the US will push the EURO lower. 

Buy USD/JPY – MT is Bull Normal

Daily chart.

Technical Overview: The pair remains in a bull market type with support at 109.20. I will continue to buy if the price remains above that level, aiming for 111.00.

Fundamental Overview: The correction was fuelled by short-term weakness in the dollar, but was capped by the rebound of the US bond yields. As Covid-19 cases continue to rise in Japan, it will hinder the economic recovery meaning the dollar will remain the safe haven of choice for now. 

With the market continuing to focus on the pandemic situation, I expect the dollar will continue to appreciate against the YEN in the long run. 

Sell GBP/USD – MT is Bear Normal

Daily chart.

Technical Overview: Price failed to stay above the support level at 1.38. I will wait for the price to break below 1.3674 before targeting 1.34.

Fundamental Overview: Despite the reopening of the UK economy as they exit the lockdown, fears of a possible spike continue to weigh on the pound. Additionally, concerns about the AstraZeneca vaccine may slow down a full recovery of the UK economy. Despite a drop in the US bond yields in the early days of the week, the pound failed to make gains and continued to trade lower, which is a bearish sign for the GBP. 

In the week ahead, we are expecting UK GDP data. If it comes out better than expected, this may only cap the recent loss and not create any demand in the pound. 

Wait AUD/USD – MT is Sideways Normal

Daily chart.

Technical Overview: The pair is in a consolidation phase. I will wait for a breakout below the minor support at 0.757 to continue selling the pair toward 0.74. 

Fundamental Overview: Australia is one of the countries that has come out of the pandemic the strongest, but demand for the USD due to the rise of the US bond yields, this has led to a consolidation phase of the pair. However, the halt of the widely used AstraZeneca vaccine may lead to fresh selling in the pair. 

Otherwise, this week’s key data from the US and Australia may help to establish a clear direction. Strong data coming out from the US with an expected lower than previous employment change in Australia will be bearish AUD.