FX.co ★ Technical analysis recommendations of EUR/USD and GBP/USD on January 18, 2021

EUR/USD

The effectiveness of the downward movement has slightly decelerated over the past day. Today, the pair met the support of daily levels (1.1383), so a slowdown is possible. The most profitable option for the bulls is to complete the downward correction and return to the resistance levels of 1.1439-92 (monthly levels + weekly Fibo Kijun + upper limit of the daily cloud). The breakdown of the encountered support (1.1383) and the continuation of the daily downward correction will strengthen the bearish sentiment and opportunities. The next supports are set at 1.1353 - 1.1335 (daily levels + weekly short-term trend).

The decline led the smaller timeframes to change priorities. The pair's consolidation below the key levels, which are now joining their efforts in the area of 1.1411-16 (central pivot level + weekly long-term trend), caused changes in preferences among the analyzed indicators, setting them up for sales. Currently, the first support (1.1389) of the classic pivot levels is being tested. The next support levels such as S2 (1.1369) and S3 (1.1347) will act as intraday downward pivot points for the decline. On the contrary, the restoration of bullish positions will allow us to return to the key levels (1.1411-16), which may affect the current balance of power and further prospects. The intraday upward pivot points are the resistances of the classic pivot levels (1.1431 - 1.1453 - 1.1473).

GBP/USD

The encountered resistances 1.3669 (weekly Fibo Kijun) - 1.3704 (monthly Tenkan) and the breakdown of the daily Chinkou line from the chart continue to help contain the bullish momentum and strengthen the bearish mood. Today, the bears declined to the support of the daily short-term trend (1.3619). If the support is broken, then they will rush to the weekly medium-term trend (1.3571). However, the formation of a rebound from the met support will allow the bulls to fight for the resistance levels of 1.3669 - 1.3704.

The primary advantage in the smaller timeframes has shifted to the bears, who managed to consolidate below the key levels at 1.3656-73 (central pivot level + weekly long-term trend) and enlist the support of the analyzed technical indicators. Trading below the key levels will maintain the preferences to develop the bearish scenario. The next pivot points here will be 1.3603 - 1.3569 (support for the classic pivot levels).

In turn, growth and consolidation above the key levels (1.3656-73) can serve as the start of the rebound from the encountered support of the daily short-term trend (1.3619). The main task in this direction will be to break through the resistances (1.3669 - 1.3704) of the higher timeframes. Today's upward pivot points in the smaller timeframes are at 1.3709 (R2) and 1.3728 (R3).

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Ichimoku Kinko Hyo (9.26.52) and Kijun-sen levels in the higher time frames, as well as classic Pivot Points and Moving Average (120) on the H1 chart, are used in the technical analysis of the trading instruments.