Daily Forex Analysis - 21 January 2021

USD Overview (21 January 2021)

Yesterday, USD weakened against most major currencies except EUR and CHF.

The Unemployment Claims data (Forecast: 930K, Previous: 965K) will be released later at 2130 (SGT).

Also, at that time, housing data will be released.

- Building Permits (Forecast: 1.60M, Previous: 1.64M)

- Housing Starts (Forecast: 1.56M, Previous: 1.55M)

NZD/USD Outlook (21 January 2021)

Overall, NZD/USD is ranging across.

The New Zealand CPI q/q data (Forecast: 0.2%, Previous: 0.7%) will be released tomorrow at 0545 (SGT).

Currently, NZD/USD is testing to break above the key level of 0.72. Its next support zone is at 0.70100 and the next resistance zone is at 0.72850.

Look for buying opportunities of NZD/USD.

AUD/USD Outlook (21 January 2021)

Overall, AUD/USD is trending upwards.

The Australian employment data released earlier today indicated continued increase in the number of jobs being added although lower than previous month while unemployment rate declined.

- Employment Change (Actual: 50.0K, Forecast: 50.0K, Previous: 90.0K)

- Unemployment Rate (Actual: 6.6%, Forecast: 6.7%, Previous: 6.8%)

The Australian flash PMI data will be released tomorrow at 0600 (SGT).

- Flash Manufacturing PMI (Forecast: NA, Previous: 55.7 revised from 56.0)

- Flash Services PMI (Forecast: NA, Previous: 57.0 revised from 57.4)

Also, the Australian Retail Sales m/m data (Forecast: -1.5%, Previous: 7.1%) will be released tomorrow at 0830 (SGT).

Currently, AUD/USD is moving towards the resistance zone of 0.77900 and the next support zone is at 0.75000.

Look for buying opportunities of AUD/USD if it breaks the resistance zone of 0.77900.

USD/JPY Outlook (21 January 2021)

Overall, USD/JPY is ranging across.

Earlier today, the Bank of Japan held monetary policy unchanged. The central bank has revised its forecast for Japans GDP for 2021 upwards, from the previous range of 3.0%-3.8% to 3.3%-4.0%. Inflation forecast for 2021 has also been revised upwards from the previous range of 0.2%-0.6% to 0.3%-0.5%.

USD/JPYs next support zone is at 102.800 and the next resistance zone of 104.600.

Look for selling opportunities of USD/JPY.

EUR/USD Outlook (21 January 2021)

Overall, EUR/USD is trending downwards. Recently, EUR/USD bounced up from the support zone of 1.20750.

The final CPI y/y data released yesterday indicated no revision in the inflation figures from the preliminary release.

- Final CPI y/y (Actual: -0.3%, Forecast: -0.3%, Previous: -0.3%)

- Final Core CPI y/y (Actual: 0.2%, Forecast: 0.2%, Previous: 0.2%)

The European Central Bank (ECB) will be announcing their monetary policy decision later at 2045 (SGT). It is expected that the central bank will be holding interest rate unchanged at 0.00%. With the worsening condition of COVID-19 in the eurozone leading to the return of lockdown measures and restrictions in several European countries, pay attention to whether the ECB is considering to carry out any new monetary policy stimulus.

The ECB will also be holding a press conference at 2130 (SGT). During this time, volatility is expected of EUR.

The eurozone Consumer Confidence data (Forecast: -15, Previous: -14) will be released later at 2300 (SGT).

EUR/USDs next support zone is at 1.20750 and the next resistance zone is at 1.23170.

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

GBP/USD Outlook (21 January 2021)

Overall, GBP/USD is trending upwards. Recently, GBP/USD tested but failed to break above the key level of 1.37.

The UK CPI y/y data released yesterday indicated a slight increase in annual inflation.

- CPI y/y (Actual: 0.6%, Forecast: 0.5%, Previous: 0.3%)

- Core CPI y/y (Actual: 1.4%, Forecast: 1.3%, Previous: 1.1%)

Yesterday, during an open forum, Bank of England Governor Bailey mentioned that the central bank has not made any discussion on the adoption of negative interest rates.

Currently, GBP/USD is moving towards the key level of 1.37. Its next support zone is at 1.34800 and the next resistance zone of 1.37800.

Look for buying opportunities of GBP/USD if it breaks above the key level of 1.37.

USD/CAD Outlook (21 January 2021)

Overall, USD/CAD is ranging across. Recently, USD/CAD broke below the key level of 1.27.

The Canadian CPI m/m data (Actual: -0.2%, Forecast: 0.1%, Previous: 0.1%) released yesterday indicated a decline in overall inflation in December.

During the monetary policy meeting yesterday, the Bank of Canada (BoC) held its monetary policy unchanged. The central bank expressed optimism in Canadians economy, expecting a rebound after the current lockdown measures are lifted.

Currently, USD/CAD is moving towards the key level of 1.26. Its next support zone is at 1.25720 and the next resistance zone is at 1.27900.

With the hawkish tone struck by the BoC, look for selling opportunities of USD/CAD if it breaks below the key level of 1.26.

GBP/JPY Outlook (21 January 2021)

Overall, GBP/JPY is trending upwards. Recently, GBP/JPY bounced off from the resistance zone of 142.200.

The UK CPI y/y data released yesterday indicated a slight increase in annual inflation.

- CPI y/y (Actual: 0.6%, Forecast: 0.5%, Previous: 0.3%)

- Core CPI y/y (Actual: 1.4%, Forecast: 1.3%, Previous: 1.1%)

Yesterday, during an open forum, Bank of England Governor Bailey mentioned that the central bank has not made any discussion on the adoption of negative interest rates.

Earlier today, the Bank of Japan held monetary policy unchanged. The central bank has revised its forecast for Japans GDP for 2021 upwards, from the previous range of 3.0%-3.8% to 3.3%-4.0%. Inflation forecast for 2021 has also been revised upwards from the previous range of 0.2%-0.6% to 0.3%-0.5%.

Currently, GBP/JPY is moving towards the resistance zone of 142.200 and the next support zone is at 140.000.

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

EUR/JPY Outlook (21 January 2021)

Overall, EUR/JPY is trending downwards. Recently, EUR/JPY broke below the key level of 126.

The final CPI y/y data released yesterday indicated no revision in the inflation figures from the preliminary release.

- Final CPI y/y (Actual: -0.3%, Forecast: -0.3%, Previous: -0.3%)

- Final Core CPI y/y (Actual: 0.2%, Forecast: 0.2%, Previous: 0.2%)

Earlier today, the Bank of Japan held monetary policy unchanged. The central bank has revised its forecast for Japans GDP for 2021 upwards, from the previous range of 3.0%-3.8% to 3.3%-4.0%. Inflation forecast for 2021 has also been revised upwards from the previous range of 0.2%-0.6% to 0.3%-0.5%.

The European Central Bank (ECB) will be announcing their monetary policy decision later at 2045 (SGT). It is expected that the central bank will be holding interest rate unchanged at 0.00%. With the worsening condition of COVID-19 in the eurozone leading to the return of lockdown measures and restrictions in several European countries, pay attention to whether the ECB is considering to carry out any new monetary policy stimulus.

The ECB will also be holding a press conference at 2130 (SGT). During this time, volatility is expected of EUR.

The eurozone Consumer Confidence data (Forecast: -15, Previous: -14) will be released later at 2300 (SGT).

EUR/JPYs next support zone is at 125.000 and the next resistance zone is at 127.150.

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