Daily Forex Analysis - 18 December 2020

USD Overview (18 December 2020)

Yesterday, USD weakened against all major currencies.

The housing data released yesterday indicated an increase in the number of houses being approved for building and the number of houses that began construction.

- Building Permits (Actual: 1.64M, Forecast: 1.55M, Previous: 1.54M revised from 1.55M)

- Housing Starts (Actual: 1.55M, Forecast: 1.53M, Previous: 1.53M)

Yesterday, it was announced that the U.S. Food and Drug Administration advisory panel overwhelmingly approved Modernas COVID-19 vaccine, making it the second vaccine in the U.S. to be approved.

The bank stress test results will be released tomorrow at 0530 (SGT).

NZD/USD Outlook (18 December 2020)

Overall, NZD/USD is trending upwards.

The New Zealand ANZ Business Confidence data (Actual: 9.4, Forecast: NA, Previous: -6.9) released earlier today indicated a strong rebound from pessimism to optimism in the level of confidence of respondents on the 12-month economic outlook of New Zealand.

NZD/USDs next support zone is at 0.70000 and the next resistance zone is at 0.72000.

Look for buying opportunities of NZD/USD.

AUD/USD Outlook (18 December 2020)

Overall, AUD/USD is trending upwards.

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

Look for buying opportunities of AUD/USD.

USD/JPY Outlook (18 December 2020)

Overall, USD/JPY is trending downwards. Recently, USD/JPY broke the support zone of 103.400.

Earlier today, the Bank of Japan (BoJ) held interest rate unchanged at -0.10%. The central bank will be extending the Special Program to Support Financing in Response to the Novel Coronavirus (COVID-19) by 6 months. The BoJ also highlighted that the Japanese economy is picking up. A press conference will take place shortly. During this time, there may be volatility in JPY.

Currently, USD/JPY is testing the resistance zone of 103.400 and the next support zone is at 102.300.

Look for selling opportunities of USD/JPY if it rejects the resistance zone of 103.400.

EUR/USD Outlook (18 December 2020)

Overall, EUR/USD is trending upwards. Recently, EUR/USD broke the resistance zone of 1.21800 due to optimism arising from progress in post-Brexit trade deal and COVID-19 vaccine.

Yesterday, it was reported that President Emmanuel Macron was tested positive for COVID-19. A track-and-trace effort for more potential COVID-19 cases has begun across Europe as President Macron was involved in meetings with EU officials recently.

The German ifo Business Climate data (Forecast: 90.2, Previous: 90.7) will be released later at 1700 (SGT).

EUR/USDs next support zone is at 1.21800 and the next resistance zone is at 1.24800.

Look for short-term buying opportunities of EUR/USD.

GBP/USD Outlook (18 December 2020)

Overall, GBP/USD is trending upwards. Recently, GBP/USD bounced down from the key level of 1.36.

Yesterday, the Bank of England held its monetary policy unchanged.

The UK Retail Sales m/m data (Forecast: -4.0%, Previous: 1.2%) will be released later at 1500 (SGT).

GBP/USDs next support zone is at 1.34600 and the next resistance zone is at 1.38160.

Look for short-term buying opportunities of GBP/USD.

USD/CAD Outlook (18 December 2020)

Overall, USD/CAD is trending downwards. Recently, USD/CAD bounced up from the key level of 1.27.

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

- Core Retail Sales m/m (Forecast: 0.1%, Previous: 1.0%)

- Retail Sales m/m (Forecast: 0.1%, Previous: 1.1%)

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 (18 December 2020)

Overall, GBP/JPY is ranging across.

Yesterday, the Bank of England held its monetary policy unchanged.

Earlier today, the Bank of Japan (BoJ) held interest rate unchanged at -0.10%. The central bank will be extending the Special Program to Support Financing in Response to the Novel Coronavirus (COVID-19) by 6 months. The BoJ also highlighted that the Japanese economy is picking up. A press conference will take place shortly. During this time, there may be volatility in JPY.

Currently, GBP/JPY is testing the resistance zone of 140.000 and the next support zone is at 137.500.

Look for short-term buying opportunities of GBP/JPY if it breaks the resistance zone of 140.000.

EUR/JPY Outlook (18 December 2020)

Overall, EUR/JPY is trending upwards. Recently, EUR/JPY trended into the resistance zone of 126.700.

Yesterday, it was reported that President Emmanuel Macron was tested positive for COVID-19. A track-and-trace effort for more potential COVID-19 cases has begun across Europe as President Macron was involved in meetings with EU officials recently.

Earlier today, the Bank of Japan (BoJ) held interest rate unchanged at -0.10%. The central bank will be extending the Special Program to Support Financing in Response to the Novel Coronavirus (COVID-19) by 6 months. The BoJ also highlighted that the Japanese economy is picking up. A press conference will take place shortly. During this time, there may be volatility in JPY.

The German ifo Business Climate data (Forecast: 90.2, Previous: 90.7) will be released later at 1700 (SGT).

Currently, EUR/JPY is testing the resistance zone of 126.700 and the next support zone is at 124.750.

Look for short-term buying opportunities of EUR/JPY if it breaks the resistance zone of 126.700.