Created on January 06, 2025

My previous GBP/USD signal last Tuesday was not triggered as there was no bullish price action when my support level at $1.2500 was first reached that day.

Today’s GBP/USD signals

Risk 0.75%.

Trades must be submitted before 5pm in London today.

Long trade ideas

• Long entry after a bullish reversal of action on the H1 time frame immediately after the next touch of $1.2435 or $1.2384.
• Place a stop loss 1 pip below the local swing low.
• Move the stop loss to even when the trade is 25 pips in profit.
• Remove 50% of the position as profit when the price reaches 25 pips in profit and leave the rest of the position to be used.

Short Trade Ideas

• Short entry after reversal of bearish price action on H1 time frame immediately after next touch of $1.2496 or $1.2502 or $1.2563.
• Place the stop loss 1 pip above the local high.
• Move the stop loss to even when the trade is 25 pips in profit.
• Remove 50% of the position as profit when the price reaches 25 pips in profit and leave the rest of the position to be used.

The best method to identify a classic “price reversal” is the close of an hourly candle, such as a pin bar, doji, outside, or even just a engulfing candle with a higher close. You can take advantage of these levels or zones by watching the price action that occurs at the given levels.

GBP/USD analysis

I wrote in my previous GBP/USD forecast last week that the price is likely to remain between $1.2609 and $1.2500. This was not a good call, as the price fell.

The price then fell further, because Great Britain may be starting to fall into recession, and the Bank of England really needs to cut rates, but it will be difficult to do so. The US dollar also remains very strong.

However, the last few days have seen quite a strong price rally from the recent multi-month low, as the pound bids again while the dollar trades mostly sideways.

It’s hard to say how far this price increase will go – it’s certainly a counter-trend, so it’s doubtful.

If I have to make a prediction for today, it looks like the price will rise as long as it stays above the new support level at $1.2435, which is likely to be today’s key point.

The target for the bulls will logically be the big round number and confluent resistance at $1.2500, but as today is Monday, it could be a very quiet day in the market with very little volatility, so it will not be surprising if this level is not reached.

There is nothing of great importance today about either GBP or USD.

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Australian Dollar Futures (6A) March 2025 Contract: Key Levels, Analysis and Price Prediction for the Australian Dollar Futures Market

Current price: 0.6245

Market overview and key dynamics of Australian dollar futures

The Australian dollar futures market, particularly the AUDUSD pair, is showing signs of a continued upside reversal. This strength in the Australian dollar is driven by bullish momentum, with the potential for a return to critical support levels, offering strategic long positions. Traders analyzing Australian dollar futures should pay close attention to the following areas in this price prediction:

Key support levels in Australian dollar futures

1. 0.62395 – Today’s high value developing area (VAH).

2. 0.62330 – Today’s development VWAP and VAH of the previous three days.

   • A very significant level due to confluence of support and intraday and historical data. This level is ideal for potential long entries, especially for traders looking to take advantage of the upside momentum in Australian dollar futures.

3. Options for stopping a placement:

   • Harder Stop: Near 0.62250, just below the December 30 closing VWAP. Suitable for short-term traders looking for less risk in their AUDUSD trades.

   • Wider stops: At 0.62195 or 0.62210 (current and yesterday’s VAH), providing more room for price fluctuation and adjusting the longer-term view.

Magnet Resistance Levels and Price for Australian Dollar Futures

1. 0.62600 – A strong price magnet for bulls in Australian dollar futures, attracting liquidity and likely triggering shorting above this level.

2. 0.62860 – Extended target, likely achievable with continued bullish momentum in the AUDUSD market.

3. 0.63160 – December 18th POC, a long-term bullish target that may not be reached today, but remains in play for the week.

Bearish scenario in Australian dollar futures

Australian dollar futures trading recommendations

1. Bullish setup:

   • Consider long positions nearby 0.62330 or 0.62395 with tight or moderate stops, depending on your risk appetite.

   • Aim for strong resistance to 0.62600with extensions for 0.62860 and 0.63160. These levels offer great potential in Australian dollar futures trading.

2. Bearish setup:

Final Thoughts on Australian Dollar Futures

The Australian dollar futures market presents clear levels of interest for both bulls and bears. While the bullish bias is currently dominant, a return to key support levels may offer attractive entry points into the AUDUSD. Use the listed price levels as guides and connectors to predict strong price reactions. This Australian dollar futures analysis highlights the importance of managing risk and conducting thorough research in your price prediction strategies. Whether trading AUDUSD short term or long term, these levels provide valuable insights for market participants. Visit ForexLive.com for additional reviews.

Created on January 06, 2025

Bullish View

• Buy the AUD/USD pair and set a profit take at 0.6250.
• Add a stop-loss at 0.6150.
• Time frame: 1-2 days.

Bearish View

• Sell ​​the AUD/USD pair and set a profit take at 0.6150.
• Add a stop-loss at 0.6250.

The AUD/USD pair continued its strong sell-off as investors embraced the risk-off sentiment by moving to the safety of the US dollar. It fell to a low of 0.6180, its lowest point since 2022 and a few pips above the 2020 low.

The decline in the AUD/USD exchange rate coincided with an uptrend in the US dollar index, which jumped to $109 as the greenback rose against most currencies. This increase is largely due to investors anticipating that the Fed will become increasingly hawkish as Donald Trump’s policies begin to take shape.

Trump has made several promises, including immigration, tariffs and tax cuts. He wants to keep his 2017 tax cuts and roll out newer ones. Such a move, if the law is adopted, will lead to higher inflation in the long run.

The most significant move to trigger inflation will be the upcoming tariffs, which Trump hopes will help reduce the trade deficit. The reality is that US importers will raise prices because it will become incredibly expensive to manufacture in the US.

Furthermore, the AUD/USD pair retreated on growing prospects that the Reserve Bank of Australia (RBA) will adopt a more dovish tone this year. In contrast to other central banks, the RBA maintained a very hawkish tone as it left interest rates unchanged in 2024. With economic growth slowing down, there are chances that RBA will start reducing interest rates this year.

The Federal Reserve, on the other hand, has indicated that it will be more hawkish this year because the US economy is doing well. He indicated that this year he will achieve only two reductions, less than the previously expected 4.

This week’s US jobs numbers will provide more information on the labor market. Economists expect the data to show that the unemployment rate remained at 4.2% in December.

AUD/USD technical analysis

The daily chart shows that the AUD/USD pair has been in a strong bearish trend for the past few months. It recently fell and moved below the important support at 0.6363, which is the low level of April and August last year.

The pair remained below the 50-day and 20-day exponential moving averages (EMA), a sign that the bears are in control. It also formed a falling wedge chart, a popular reversal sign.

Therefore, the pair can bounce back when the bulls target the next point at 0.6250. A break below support at 0.6180 will invalidate the bullish view.

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Created on January 06, 2025

Bearish View

• Sell ​​BTC/USD pair and set profit taking at 91,000.
• Add stop-loss to 101,000.
• Time frame: 1-2 days.

Bullish Pattern

• Buy the BTC/USD pair and set your take profit at 101,000.
• Add stop-loss at 91,000.

The BTC/USD pair moved sideways on Monday morning, as the path to the psychological point of 100,000 remained elusive. Bitcoin was trading at $98,000, about 7.4% higher than the December 30 low.

The BTC/USD pair gradually rose even as the US Dollar Index (DXY) continued its strong uptrend to hit a multi-year high of $109.51. In most periods, US dollar-denominated assets underperform when they are in strong growth.

Bitcoin’s volatility also occurred as spot Bitcoin ETFs continued to see increased demand. These funds had a net inflow of $908 million on Friday, the largest increase in months. They now own over $111 billion in assets, a number that will continue to grow over the next few months.

Bitcoin had other positive catalysts. For example, the popular Coinbase Premium Index bounced back after falling to a 12-month low last week. This is an important index that compares the price of Bitcoin traded on Coinbase and other exchanges.

A higher figure is usually a sign that US investors are buying Bitcoin as most of them use Coinbase, the country’s largest exchange.

Meanwhile, the volume of Bitcoin on the exchange continued to decline, a sign that investors are holding onto the coin.

Looking ahead, the next key catalyst to watch will be the upcoming economic data from the United States. The most important data to watch will be the upcoming US economic payrolls (NFP) data.

BTC/USD Technical Analysis

The daily chart shows that the price of Bitcoin peaked at $108,300 in December and then retreated to around $91,400. It has remained consistently above the 50-day moving average, a sign that the bulls are in control for now.

However, there are signs that the coin formed a head and shoulders pattern. This is one of the most bearish patterns in the market. The cut of this sample is around $91,400.

Also, the relative strength index (RSI) and MACD indicators have formed a bearish divergence diagram.

Therefore, the pair is likely to have a bearish breakout in the next few days as long as it remains below the $100,000 resistance. If that happens, the next point to watch will be $91,000.

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Created on January 06, 2025

The Bank of Japan governor has made it clear that any rate hike will be data dependent, leaving the Japanese yen lower during today’s session in Tokyo.

1. The USD/JPY currency pair rose from the week’s open, with the yen weakened by comments from Bank of Japan Governor Ueda that the Bank will want to see wages rise before it feels it can raise interest rates again. This is seen as a slightly dovish bias. USD/JPY is in a clear long-term bullish trend.
2. Asian currencies are generally very weak against the US dollar, as evidenced by the Bloomberg Asia Dollar Index trading at a new 20-year low.
3. President-elect Trump’s plans for additional tariffs on Chinese imports are thought to push the AUD/USD currency pair lower, with bears looking to target the big round number at $0.6000.
4. On the Forex market, since the opening of Tokyo today, the strongest currency was the Canadian dollar, while the weakest currency was the Swiss franc. The US dollar is in a strong bullish trend and traded at a new two-year high last week. The EUR/USD currency pair and the USD/JPY currency pair remain within the valid long-term trends, and the USD/JPY currency pair is advancing today. Trend traders will be interested in going short and long of these currency pairs, respectively.
5. The US 10-year Treasury yield is near a multi-month high and will attract the interest of trend traders to the long side. Some CFD brokers offer this to traders and micro futures are available on CME.
6. German preliminary CPI (inflation) will be released today. It is expected to show a growth of 0.3% on a monthly basis.
7. Today is a public holiday in Italy.

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• Final Services PMI 51.1 vs. 51.4 expected and 50.8 earlier.
• Final composite PMI 50.4 vs. 50.5 expected and 50.5 prior.

Key Findings:

• Employment fell for the third month in a row.
• Marginal increase in business activity.
• Input cost inflation accelerates to an eight-month high.

Comment:

Tim Moore, chief economist at S&P Global Market Intelligence, said:

“The service sector ended last year with only a slight increase in business activity and almost a standstill in the arrival of new business. Respondents indicated that a decline in business and consumer confidence, mainly due to concerns about the domestic economic outlook in 2025, led to a significant loss growth momentum While most service sectors in the UK have seen weak demand and shrinking client budgets, there have been pockets of strong growth in areas such as technology services.

After the budget drop, business optimism continued in December, and production growth expectations for the following year remained unchanged compared to November’s lowest level in 23 months. Concerns about the impact of rising wage costs, along with general uneasiness about the climate for business investment, are reported to be the main factors affecting growth prospects in 2025.

Rising input price inflation contributed to a bleak near-term outlook for service providers, with overall cost pressures hitting an eight-month high in December. Meanwhile, inflation-adjusted prices intensified at the end of last year and remained well above pre-pandemic trends.

Faced with subdued demand conditions and rising employment costs, many service providers decided to reduce staffing and delay filling positions in December. Almost one in four respondents saw an overall decline in the number of their payrolls. Excluding the pandemic, this represented the fastest pace of job cuts in more than 15 years.”

Created on January 06, 2025

Bearish View

• Sell ​​the EUR/USD pair and set a take profit at 1.0200.
• Add a stop-loss at 1.0400.
• Time frame: 1-2 days.

Bullish View

• Place a buy-stop at 1.0330 and a take-profit at 1.0410.
• Add a stop-loss at 1.0200.

The EUR/USD pair continued its strong downtrend, falling for five consecutive weeks and hitting its lowest level since November 2022. It is down nearly 10% from its August 2024 high.

The rise in the US dollar index

The EUR/USD pair fell as the US dollar index continued its strong rise. After falling to $100 in 2024, it surged to over $109 last week as investors flocked to the safe-haven currency.

The main reason for this collapse is that there is a difference between the United States and the European Union. Recent economic data shows that the European Union grew by 0.4% in the third quarter and by 1% compared to Q3’23. Key countries like Germany and France are no longer growing.

The United States, on the other hand, is doing well. Analysts expect the economy to grow by 2.7% in 2024. The stock market is booming, with eight companies having market capitalizations over $1 trillion.

Therefore, analysts expect the Federal Reserve and the European Central Bank (ECB) to diverge. The Fed has indicated that it will make two interest rate cuts this year, while the ECB will make more cuts this year.

The EUR/USD pair also fell as the market awaits the upcoming inauguration of Donald Trump. Trump has threatened to impose massive tariffs on European goods until the bloc buys more American oil and gas.

The next key catalyst to watch on Monday will be services and composite PMI data from Europe and the United States. Economists see data showing that Germany’s composite PMI fell to 47.8, while Europe’s PMI rose slightly to 49.5. A PMI number below 50 is usually a sign that the sector is contracting. In the US, the PMI is expected to be 56.

Technical analysis of EUR/USD

The EUR/USD pair has been in a strong downtrend over the past few months as the US dollar index has rallied. It moved below the key support at 1.0450, the psychological level and October 2023 low.

The pair also fell below the key support at 1.0333, the low of November 2022. It moved below the Ichimoku cloud indicator and to the ultimate support of the Murrey Math Lines.

Therefore, the EUR/USD exchange rate is likely to continue to fall as traders target the parity level at 1,000, which coincides with the extreme oversold point of the Murray Mathematical Lines.

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• Final Services PMI 51.2 vs. 51.0 expected and 49.3 previously.
• Final composite PMI 48.0 vs. 47.8 expected and 47.2 prior.

Key findings:

• Business Activity Index HCOB Germany Services PMI at 51.2 (November: 49.3). 2-month maximum.
• HCOB Germany composite PMI output index at 48.0 (November: 47.2). 2-month maximum.
• Rates of input cost inflation and output price inflation are accelerating.

Comment:

Commenting on the PMI data, dr. Cyrus de la Rubia, Chief Economist of the Hamburg Commercial Bank, said:

“The main conclusion from the December PMI in services is weak growth combined with strong inflation – stagflation in almost its strongest form. The rise in costs has been staggering, with the PMI input price index jumping nearly four points, the fastest rise since February last year. The primary culprit is likely wages, which rose nearly 9% year over year in the third quarter.

High inflation within the services PMI is quite unusual for an economy flirting with recession. From 2021/2022, we have seen a stark contrast between high levels of inflation and slow growth, or even stagnant activity. This mismatch began with the economic shocks of the pandemic and then the war in Ukraine, but it also hints at a structural shift, likely linked to demographics and ongoing labor market shortages.

The services sector has returned to, if only moderate, growth mode after falling below 50 in November, and respondents’ increased optimism about future business activity is good news. However, the continued decline in new jobs and open jobs dampens the positive activity figures.

It is quite significant that service activity has remained resilient despite the prolonged manufacturing recession. Historically, service activity has closely mirrored manufacturing output, except in a few cases during the Great Recession of 2008/2009. and 2019/2020. This suggests that an increasing share of services is becoming more independent of industrial activity, highlighting the increasing role of services in stabilizing the economy.”

EUR/USD is trading back up to 1.0365, up 0.5% on the day, and starting to move back above its 100-hour moving average at 1.0349. The pair is looking for a second straight day of gains, capturing a bounce after last week’s dip to a low of 1.0222. Similarly, GBP/USD is also up 0.5% at 1.2485 as it also challenges a move above its own 100-hour moving average of 1.2482 currently.

But what exactly do these moves mean?

That suggests dollar sellers are trying to regain some short-term momentum to start the new week. A move above the respective 100-hour moving averages but below the 200-hour moving averages (1.0380 for EUR/USD and 1.2512 for GBP/USD, respectively) means that the short-term bias will return to a more neutral one.

Additionally, the dollar is also down against commodity currencies with AUD/USD up 0.6% to 0.6250 and USD/CAD down 0.5% to 1.4370 currently. The latter is particularly interesting to start the week with the crazy side of the equation also in focus as seen here.

For now, the dollar is only rising against the yen, with USD/JPY holding up more than 0.3% at 157.70. This comes with bond yields remaining on the higher side, with US 10-year yields currently seen at 4.623%.

Maybe later in the day/week we’ll see the big currency offset the bonds?