Given the inability of buyers to fix above the technically strong resistance level of 91.30, the risk of development of a more powerful downward wave remains elevated. At the time of writing this review, the USDX quotes were holding above the psychological level of 91.00, a breakthrough of which may become another confirmation of the sellers' readiness to continue the decline to 90.50 and further to 90.00.
The bearish scenario remains a priority until the return of quotations and their subsequent fixation above 91.30. I will pay attention to the release of the report on the changes in the number of initial and repeated applications for unemployment benefits in the USA. At this point there may be more trading activity in the USDX.
According to the basic canons of graphical analysis, we observe an almost ideal situation – the pair's quotes have adjusted to the technical and at the same time psychological level of 1.2000, which passes the upper limit of the descending channel. Therefore, until the breakout and subsequent fixing of the pair's quotes under 1.2000, the bullish scenario remains a priority. At the same time, today traders need to pay attention to the ECB's decision on interest rates. The probability of their change remains extremely low, but comments during the press conference can have a noticeable impact on the EUR and, as a result, on the pair.
There were no significant changes in the overall trading dynamics of this currency pair. At the same time, the appearance of a fairly long lower shadow at the time of a false breakout of the narrow support area of 1.3900/10 indicates the weakness of sellers. Given all this, the emergence of a bullish fundamental factor for the GBP may provide the necessary support for the return of quotes to 1.4000 and further to 1.4090. But at the same time, I would like to draw your attention to the lack of publications of important macroeconomic reports from the UK. Therefore, only unexpected news about the effectiveness of vaccination or information about changes in the conditions of quarantine restrictions in the foggy Albion can have a strong impact on the pair.
The pair continues to push towards the technically important support level of 108.00. Pay attention that each following bounce from this support becomes weaker. Accordingly, the risk of a more powerful downward wave continues to increase. The bearish scenario is still in priority until the return of quotations above 108.50. It takes into account the retreat of quotations to 107.00 and further to 106.45.
The above overview is not a direct guide to action, but only a recommendation.