Daily Forex Analysis - 16 December 2020

USD Overview (16 December 2020)

Yesterday, USD weakened against all major currencies.

The retail sales m/m data will be released later at 2130 (SGT).

- Core Retail Sales m/m (Forecast: 0.1%, Previous: 0.2%)

- Retail Sales m/m (Forecast: -0.3%, Previous: 0.3%)

The flash PMI data will be released later at 2245 (SGT).

- Flash Manufacturing PMI (Forecast: 55.9, Previous: 56.7)

- Flash Services PMI (Forecast: 55.7, Previous: 58.4 revised from 57.7)

The Federal Reserve will be announcing their monetary policy decision tomorrow at 0300 (SGT). The central bank is expected to hold interest rate unchanged and provide information on their bond-buying programme. The Fed will also be releasing their economic projections for the U.S. economy. A press conference will also be held at 0330 (SGT). During this time, volatility is expected in USD.

NZD/USD Outlook (16 December 2020)

Overall, NZD/USD is trending upwards.

The New Zealand GDP q/q data (Forecast: 12.9%, Previous: -12.2%) will be released tomorrow at 0545 (SGT).

Currently, NZD/USD is moving towards the key level of 0.71. Its next support zone is at 0.70000 and the next resistance zone is at 0.72000.

Look for buying opportunities of NZD/USD if it breaks above the key level of 0.71.

AUD/USD Outlook (16 December 2020)

Overall, AUD/USD is trending upwards.

The Australian flash PMI data released yesterdayindicated an increase in the rate of expansion of business activities.

- Flash Manufacturing PMI (Actual: 56.0, Forecast: NA, Previous: 55.8 revised from 56.1)

- Flash Services PMI (Actual: 57.4, Forecast: NA, Previous: 55.1 revised from 54.9)

The Australian employment data will be released tomorrow at 0830 (SGT).

- Employment Change (Forecast: 40.9K, Previous: 178.8K)

- Unemployment Rate (Forecast: 7.0%, Previous: 7.0%)

AUD/USDs next support zone is at 0.73900 and the next resistance zone is at 0.76800.

Look for short-term selling opportunities of AUD/USD.

USD/JPY Outlook (16 December 2020)

Overall, USD/JPY is trending downwards. Recently, USD/JPY broke below the key level of 104.

The Japanese Flash Manufacturing PMI (Actual: 49.7, Forecast: 48.9, Previous: 49.0 revised from 48.3) released earlier today indicated a slowdown in the rate of contraction in the manufacturing sector as the PMI reading inched closer towards the neutral level of 50.0.

Currently, USD/JPY is moving towards the support zone of 103.400 and the next resistance zone is at 105.600.

Look for selling opportunities of USD/JPY if it breaks the support zone of 103.400.

EUR/USD Outlook (16 December 2020)

Overall, EUR/USD is trending upwards.

The French flash PMI data will be released later at 1615 (SGT).

- French Flash Service PMI (Forecast: 39.9, Previous: 38.8 revised from 38.0)

- French Flash Manufacturing PMI (Forecast: 50.0, Previous: 49.6 revised from 49.1)

The German Flash PMI data will be released later at 1630 (SGT).

- German Flash Services PMI (Forecast: 44.1, Previous: 46.0 revised from 46.2)

- German Flash Manufacturing PMI (Forecast: 56.4, Previous: 57.8 revised from 57.9)

The eurozone flash PMI data will be released later at 1700 (SGT).

- Flash Manufacturing PMI (Forecast: 53.0, Previous: 53.8 revised from 53.6)

- Flash Services PMI (Forecast: 41.9, Previous: 41.7 revised from 41.3)

Currently, EUR/USD is moving towards the resistance zone of 1.21800 and the next support zone is at 1.19800.

With the ongoing negotiation of the post-Brexit trade deal, look for short-term buying opportunities of EUR/USD if it breaks the resistance zone of 1.21800.

GBP/USD Outlook (16 December 2020)

Overall, GBP/USD is ranging across. Recently, GBP/USD trended up into the resistance zone of 1.34600.

The UK employment data released yesterday indicated an increase in the number of people claiming for unemployment benefits in November as the country returns to lockdown. Nonetheless, average earnings rose while unemployment rate release was better than forecasted.

- Average Earnings Index 3m/y (Actual: 2.7%, Forecast: 2.2%, Previous: 1.4% revised from 1.3%)

- Claimant Count Change (Actual: 64.3K, Forecast: 10.5K, Previous: -64.1K revised from -29.8K)

- Unemployment Rate (Actual: 4.9%, Forecast: 5.2%, Previous: 4.8%)

The UK CPI y/y data will be released later at 1500 (SGT).

- CPI y/y (Forecast: 0.6%, Previous: 0.7%)

- Core CPI y/y (Forecast: 1.4%, Previous: 1.5%)

Also, the UK flash PMI data will be released later at 1730 (SGT).

- Flash Manufacturing PMI (Forecast: 55.9, Previous: 55.6 revised from 55.2)

- Flash Services PMI (Forecast: 50.5, Previous: 47.6 revised from 45.8)

Currently, GBP/USD is testing the resistance zone of 1.34600 next the next support zone is at 1.32200.

With the ongoing negotiation of the post-Brexit trade deal, look for short-term selling opportunities of GBP/USD if it rejects the resistance zone of 1.34600.

USD/CAD Outlook (16 December 2020)

Overall, USD/CAD is trending downwards. Recently, USD/CAD bounced off the resistance zone of 1.27900.

The Canadian Housing Starts data (Actual: 246K, Forecast: 220K, Previous: 215K) released yesterday indicated a strong increase in the number of houses that began construction in November.

The Canadian CPI m/m data (Forecast: 0.0%, Previous: 0.4%) will be released later at 2130 (SGT).

USD/CADs next support zone is at 1.25720 and the next resistance zone is at 1.27900.

Look for selling opportunities of USD/CAD.

GBP/JPY Outlook (16 December 2020)

Overall, GBP/JPY is ranging across. Recently, GBP/JPY broke above the key level of 139.

The UK employment data released yesterday indicated an increase in the number of people claiming for unemployment benefits in November as the country returns to lockdown. Nonetheless, average earnings rose while unemployment rate release was better than forecasted.

- Average Earnings Index 3m/y (Actual: 2.7%, Forecast: 2.2%, Previous: 1.4% revised from 1.3%)

- Claimant Count Change (Actual: 64.3K, Forecast: 10.5K, Previous: -64.1K revised from -29.8K)

- Unemployment Rate (Actual: 4.9%, Forecast: 5.2%, Previous: 4.8%)

The Japanese Flash Manufacturing PMI (Actual: 49.7, Forecast: 48.9, Previous: 49.0 revised from 48.3) released earlier today indicated a slowdown in the rate of contraction in the manufacturing sector as the PMI reading inched closer towards the neutral level of 50.0.

The UK CPI y/y data will be released later at 1500 (SGT).

- CPI y/y (Forecast: 0.6%, Previous: 0.7%)

- Core CPI y/y (Forecast: 1.4%, Previous: 1.5%)

Also, the UK flash PMI data will be released later at 1730 (SGT).

- Flash Manufacturing PMI (Forecast: 55.9, Previous: 55.6 revised from 55.2)

- Flash Services PMI (Forecast: 50.5, Previous: 47.6 revised from 45.8)

GBP/JPYs next support zone is at 137.500 and the next resistance zone is at 140.000.

With the ongoing negotiation of the post-Brexit trade deal, look for short-term selling opportunities of GBP/JPY.

EUR/JPY Outlook (16 December 2020)

Overall, EUR/JPY is trending upwards. Recently, EUR/JPY has bounced off the resistance zone of 126.700.

The Japanese Flash Manufacturing PMI (Actual: 49.7, Forecast: 48.9, Previous: 49.0 revised from 48.3) released earlier today indicated a slowdown in the rate of contraction in the manufacturing sector as the PMI reading inched closer towards the neutral level of 50.0.

The French flash PMI data will be released later at 1615 (SGT).

- French Flash Service PMI (Forecast: 39.9, Previous: 38.8 revised from 38.0)

- French Flash Manufacturing PMI (Forecast: 50.0, Previous: 49.6 revised from 49.1)

The German Flash PMI data will be released later at 1630 (SGT).

- German Flash Services PMI (Forecast: 44.1, Previous: 46.0 revised from 46.2)

- German Flash Manufacturing PMI (Forecast: 56.4, Previous: 57.8 revised from 57.9)

The eurozone flash PMI data will be released later at 1700 (SGT).

- Flash Manufacturing PMI (Forecast: 53.0, Previous: 53.8 revised from 53.6)

- Flash Services PMI (Forecast: 41.9, Previous: 41.7 revised from 41.3)

Currently, EUR/JPY is testing to break below the key level of 126. Its next support zone is at 124.750 and the next resistance zone of 126.700.

With the ongoing negotiation of the post-Brexit trade deal, look for short-term selling opportunities of EUR/JPY if it breaks below the key level of 126.