FX.co ★ Technical recommendations for EUR/USD and GBP/USD on January 6

EUR/USD

The bulls returned again to last year's high and updated it, despite the preconditions for a correction. In this case, the upward movement continues. The nearest upward target in the higher time frame is the historic high of 1.2555 (2018 high). On the other hand, the current support, which helped the last correctional decline to be completed, remains the daily short-term trend. It is located at 1.2249 today. The next supports will most likely be the levels of 1.2170-84 (historical level + daily Fibo Kijun).

In addition, the bulls managed to retain the key supports of the smaller time frames, completing the correction in their area. After that, they further rise. The resistance of the classic pivot levels 1.2343 (R2) is currently being tested, while R3 is waiting for the pair at the level of 1.2381. Meanwhile, the key support levels are located today at 1.2282 (central pivot level) and 1.2274 (weekly long-term trend). The daily Tenkan (1.2249) is located slightly below it. A consolidation below these three levels will change the balance of power until the afternoon, which may be the beginning of a larger downward correction.

GBP/USD

It was not possible to confirm and develop a corrective decline among the bulls, however, the pair continues to remain in the correction zone. It is necessary to exit the correction zone and secure consolidation above the maximum extreme (1.3703) in order for the bullish potential to emerge and be implemented. Today, the main support zones remain at 1.3538-1.3481 (historical levels + daily Tenkan + daily Fibo Kijun) and 1.3404-1.3350 (weekly Tenkan + daily Kijun + daily Fibo Kijun + monthly Senkou Span A).

The bulls are keeping the key support levels (central pivot level + weekly long-term trend), which are now combining their forces around the 1.36 mark. Due to which, they have an initial advantage on the hourly time frame. The upward pivot points within the day are the resistances of the classic pivot levels 1.3659 - 1.3694 - 1.3747.

Meanwhile, losing the key supports in the smaller time frames and updating the low (1.3540) will return the pair to significant support and attraction zones in the higher time frames. We consider the zone of 1.3538 - 1.3481 as the first one here.

Ichimoku Kinko Hyo (9.26.52), Pivot Points (classical), Moving Average (120)