Market Analysis: Dollar Corrects in Thin Market


The American currency is strengthening slightly after Christmas. Thus, the pound/US dollar currency pair retreated from the recent high just above 1.2700 and the US dollar/yen pair found support at 142.00. The euro/US dollar pair is trying to retest Friday’s high at 1.1040. Both the Australian and Canadian currencies continue to rise against the dollar.


A block of data from Japan published this morning contributed to a slight strengthening of the USD/JPY pair, as the incoming fundamentals turned out to be quite weak. Thus, the core consumer price index (CPI) from the Bank of Japan decreased to 2.7% against the forecast of 3.00%. The price index for corporate services also fell: 2.3% versus 2.4%. Also in the red zone was the ratio of vacancies to applicants: 1.28 to 1.30. Today at 21:00 GMT+3, it is worth paying attention to the publication of data on the auction for the placement of 2-year US Treasury notes.

On the daily and weekly USD/JPY chart, the pair is below the alligator lines, the priority is to sell on the breakdown of the lower fractal at 140.90. We can consider cancelling the downward scenario if the price confidently consolidates above 145.00.


On the USD/CAD chart, the pair continues its medium-term downward trend. Sellers of the pair managed to break the support at 1.3300, and at the moment the price can test the important range of 1.3200-1.3100. It is worth considering that the mentioned range is quite strong, since the price at these levels consolidated in June-July, after which it increased sharply. So the probability is high to see a slowdown in the downward movement at 1.3200-1.3100.


On the GBP/USD chart, the British currency continues to test support at the alligator lines on the daily timeframe. At the moment, the price is clamped in a rather narrow range of 1.2670-1.2740. A breakout of the upper boundary may contribute to a sharp rise to 1.3000. A break of the lower boundary could send the pair to retest 1.2500-1.2400. No significant fundamental data from the UK is expected until the end of the week, but on New Year's Eve, both multidirectional spikes and false breakouts in both directions are possible in the thin market.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Market Analysis: GBP/USD Struggles While USD/CAD Aims Higher USD/JPY Technical Analysis: Yen Strengthens after Comments from Japanese Officials The American Currency Resumes Its Growth Australian Dollar Weakens amid Inflation News Exchange Rates Consolidate at the Beginning of the Week

Latest articles

Financial Market News

Weekly Market Wrap With Gary Thomson: CAC 40, AUD, OIL, AMAZON

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of  FXOpen UK, as he breaks down the most significant news reports and shares his expert insights. European Stock Markets on


Price of Gold Briefly Exceeded $2,050 per Ounce

In addition to new records in the stock markets, the reaction to yesterday's news about inflation in the US was also a decrease in government bond yields and a rapid rise in the price of gold — the cost of XAU/


Nasdaq-100 Price Hits All-time High after 4 Straight Months of Gains

The Nasdaq-100 index is holding above 18,000 today following yesterday's bullish momentum, fueled by inflation news. The PCE consumer spending index amounted to 0.4% on a monthly basis, which was in line with analysts' expectations. A year ago,

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.