Daily F.X. Analysis, January 07 – Top Trade Setups In Forex - Safe Haven Dominates the Market! 

The dollar has weakened over U.S. Iran tensions, which is underpinning the EUR/USD prices today. The U.S. airstrike killed top Iranian commander, the tensions between Iran & the United States escalated and caused a sudden drop in the Government bond yields across Euro bloc. On Tuesday, the market is trading with the risk-off sentiment, driving bullish bias for the safe-haven assets like gold and Japanese yen. 

Economic Calendar - Risk-off Sentiment In-Play

BTC/USD - Ascending Triangle Breakout

During the late U.S. trading session, the BTC/USD price extended its bullish trend from $7,358 to push as high as $8,000. For the prior week, traders have been firmly following to see if BTC could reverse $7,450 from a resistance to support, and several proposed that continued move over $7,600 would open the opportunity to go for the $8,000 to $8,200 range. 

The 4-hour concluded over $7,600, driving the price over the 50-day EMA, which presented bulls with full confidence to push the Bitcoin to set a daily peak. Furthermore, Bitcoin examined $8,000 resistance ahead to running to the current $7,916.

BTC/USD - Daily Technical Levels

Support     Resistance 

7,864.21       7,879.7

7,855.33       7,886.31

7,839.84       7,901.8

Pivot Point 7,870.82

BTC/USD – Daily Forecast

The BTC/USD is focusing on breaking the key resistance level of $8,000. The leading cryptocurrency employed most of December trading sideways between $7,000 and $7,500 levels. The fresh break above $7,800 appears to have recovered the buyers' attention in the digital asset. 

The U.S. Iran tensions continue to dominate the market as the Bitcoin surged to test the psychological resistance level of $8,000. The pair may drop towards 7800 and 7690 support levels before adding more bullish bias today.

EUR/USD – 50% Fibonacci Retracement & Upward Trendline

The EUR/USD closed at 1.11968 after placing a high of 1.12054 and a low of 1.11571. Overall the movement of the EUR/USD pair remained bullish throughout the day.

On the data front, the German Retail Sales for November exceeded the expectations and supported Euro at 12:00 GMT. The figures showed that consumer spending in November increased to 2.1% from the forecasted 1.1%.

At 1:15 GMT, the Spanish Services PMI was released for December, which also supported the Euro. The service sector was expanded in Spain to 54.9 from expected 53.9. At 1:45 GMT, the Italian Services PMI also expanded to 51.1 against the expectations of 50.9 in December.

At 1:50 GMT, the French Final Service PMI also showed a growth in the service sector for December when it came in as expected 52.4. AT 1:55GMT, the German Final Services PMI was also above 52.0 of expectations to 52.9 in December. It showed the expansion of the services sector in Germany. 

The Final Service PMI for the whole bloc also expanded to 52.8 from expected 52.4 in December and supported Euro on Monday. At 2:30 GMT, the Sentix Investor Confidence from the Eurozone also increased to7.6 from forecasted 3.0 and supported Euro currency.

At 3:00 GMT, the Producer Price Index for November from the Eurozone also increased to 0.2% against the expectations of 0.1% and gave strength to single currency Euro.

The stronger than expected macroeconomic data from Europe on Monday gave support to Euro. The expansion in the Services Sector in the whole Eurozone, the increased confidence of investors, and the growth in the Producer price index gave much support to the single currency.

The recession fears for Eurozone dropped after such positive data released on Monday, and the stronger Euro gave a boost to the EUR/USD pair prices to reach above 1.1200 level. However, the recent events surrounding Iran & U.S. were not settled and continue to weigh riskier assets in the market. This held the upward movement of EUR/USD on Monday.

EUR/USD - Daily Technical Levels

Support Resistance 

1.1178      1.1187

1.1175      1.1193

1.1166      1.1202

Pivot Point 1.1184

EUR/USD – Daily Forecast

The EUR/USD is facing stiff resistance around 1.1200 level, and below this, the pair can exhibit selling bias until 1.1175 level. In case the pair breaks below 1.1175, the next support is likely to be found around 1.1155 today.

The pair may find support around 1.1150 level, and I must say it's a crucial level to stay bearish below and bullish above this level today. A bearish breakout of 1.1150 can open further room for selling until 1.1125. Whereas, the bullish breakout of 1.1175 can drive more buying until 1.1195.

GBP/USD - Weaker Dollar Eyed

GBP/USD closed at 1.31682 after placing a high of 1.31741 and a low of 1.30625. Overall the movement of GBP/USD remained bullish throughout the day.

At 2:30 GMT, the Final Services PMI for December from the United Kingdom showed an expansion in the services sector to 50.0 from the expected 49.1 and supported Pound.

The stronger than expected Purchasing Manager's Index in December revealed that the service sector was expanded in the United Kingdom and supported British Pound. Strong Sterling gave rise to the prices of GBP/USD pair on Monday towards the level of 1.31741.

On the other hand, the UK PM Boris Johnson and the Foreign Secretary Dominic Raab have shown their indirect support to the U.S. killing of Iranian General Qassem Soleimani. However, the United Kingdom has said that they remain in favor of Germany and France to try to reduce the risks of war.

Elsewhere, the United Kingdom's opposition party Labor will decide the timetable for the election of its new leader. The contender for the opposition party leader named Keir Starmer has shown support to Brexit while the other contender Jess Philips suggested that she might seek to rejoin E.U. if Brexit fails.

Furthermore, the U.K. Prime Minister Boris Johnson is set to meet the new European Commission President Ursula von der Leyen on Wednesday. The meeting will include the discussion on Brexit proceedings. However, the senior Tory leaders urge Boris Johnson to kick off post-Brexit trade talks with the U.S. to put pressure in E.U. Which will push Brussels to strike a deal by the end of 2020.

On the American front, according to the December meeting minutes released by the Fed, the policymakers were in support of an easy monetary policy that weighed on the U.S. dollar on Monday. Weak U.S. dollar and strong British Pound helped GBP/USD to rise above 1.31700 level at the starting day of the week. 

GBP/USD - Daily Technical Levels

Support Resistance 

1.3148      1.3163

1.314        1.3171

1.3125      1.3186

Pivot Point 1.3156

GBP/USD – Daily Forecast

Sterling has formed a bearish engulfing candle on the 4-hour timeframe, which is likely to drive bearish pressure on the GBP/USD pair. On the lower side, the crucial support level is likely to be 1.3130; as above this, the Cable can trade until 1.3205 and 1.3245. Alternatively, the bearish breakout of the 1.3135 level can lead to GBP/USD towards 1.3080 and 1.2985 support levels.

All the best for today.