Daily F.X. Analysis, January 21 – U.K. Labor Market Figures In Highlights! 

On the forex front, the U.S. Dollar Index was little changed on the day at 97.61 amid thin holiday trading. The EUR/USD was broadly flat at 1.1095. Later today, the German ZEW Current Situation Index for January will be released (-13.5 expected).

The ZEW survey results in January will be released for Germany (current situation at -13.5, expectations at 15.0 expected) and the Eurozone.

Economic Calendar - U.K. Labor Market Figures In Highlights

BTC/USD - Daily Analysis 

The price is resting on significant daily support; failure to continue would suggest a strong stream of selling pressure. It should be noted at $8600-500 range. Price action is driving within a possible bearish flag structure, directed to a violation on the south side. It is also worth seeing that this $8600-500 is a fair demand zone; there may be an opportunity for the bulls to jump.

Overall, the Bitcoin price is holding in the bearish zone, down some -0.90% in the other half of the session. The BTC/USD is consolidating within a significant daily support area, $8600-500 range. 

The BTC/USD hasn't changed much so far as it continues to trade with sideways, following the same technical levels. A day before, the BTC/USD plunged lower to hit a low of 50% Fibonacci retracement level at 8,450. 

BTC/USD - Daily Technical Levels

Support Resistance 

8,735.08     8,974.19

8,632.13      9,110.35

8,393.02     9,349.46

Pivot Point 8,871.24

BTC/USD – Daily Forecast

The BTC/USD managed to close higher above 8,654. At the moment, the leading crypto pair trading at 8,640 with immediate support around 8,600 and resistance at 8,730. On the higher side, 8,845 is a key below which the BTC/USD is likely to maintain the bearish momentum today.

EUR/USD – Resistance Becomes Support

The EUR/USD prices were closed at 1.10944 after placing a high of 1.11024 and a low of 1.10766. Overall the movement of the EUR/USD pair remained bullish throughout the day.

The EUR/USD pair on Monday dropped to its multi-week lowest level below 1.1077 but reversed its movement in late session to end its trading day with a bullish candle.

Due to a lack of economic data from the American side amid the U.S. holiday on Martin Luther King Jr. Day, the greenback followed its previous day movement and remained stable across the board. The U.S. Dollar Index measures the value of the U.S. dollar against the basket of six currencies gained on Monday and moved to 97.70, its highest level of the month.

Last week's strong economic data and the expectations of monetary policy from the Federal Reserve have been giving support to the U.S. dollar and made it stronger across the board. The strength of the U.S. dollar against its rival currency Euro dragged down the pair EUR/USD on Monday in earlier sessions.

The pair EUR/USD dropped to its lowest level since December 25 amid strong U.S. dollar. However, the downward trend did not continue for long and reversed after the release of data from the European side.

At 12:00 GMT, the German Producer Price Index (PPI) showed an unexpected increase in December to 0.1% against the expectations of 0.0% and supported the single currency Euro.

However, the U.S. traders after a holiday will re-enter in the market and take their positions; meanwhile, they will also focus on the release of U.S. housing figures on Wednesday, which will indicate the position of U.S. economy.

EUR/USD - Daily Technical Levels

Support Resistance

1.1081       1.1107

1.1066      1.1118

1.1055      1.1134

Pivot Point: 1.1092

EUR/USD – Daily Forecast

On the 4 hour timeframe, the EUR/USD is trading at 1.1096, having formed a bullish engulfing pattern. The bullish engulfing pattern is suggesting the odds of a bullish trend in the EUR/USD. The EUR/USD can show bullish correction until 1.1106 and 1.1112 before showing further selling.

GBP/USD - Descending Triangle 

The GBP/USD pair was closed at1.30076 after placing a high of 1.30137 and a low of 1.29618. Overall the movement of GBP/USD pair remained bullish throughout the day.

During the trading session on Monday, GBP/USD initially fell and then recovered a bit in later sessions. The pair has remained under pressure in the past few weeks, mainly due to the strength of the U.S. dollar and the dovish expectations from Bank of England.

The pair has been continuously dropping over these two significant factors for the past three weeks. So, it has raised the question of how much of the possible rate cut by BoE is already priced in the market.

After the officials from the bank of England shifted towards rate cut due to back-to-back weak data releases from the British side, the drop in U.K.'s Retail Sales on last Friday added in the broad-based selling of Sterling.

In an early trading session on Monday, the pair was following its previous day's movement, which was dragged by the improving outlook of the U.S. economy and the dovish stance of the U.K.'s Central Bank. However, the GBP/USD pair started to move in an upward direction in late sessions on Monday after the Brexit plans of Boris Johnson hit a hurdle.

The upper chamber of the U.K.'s Parliament told the government to provide physical proof to European Union citizens who live in the U.K. The proof will be of their right to remain in the U.K. after the country leaves the whole bloc.

The government after the elections has lost three votes in the Parliament on Monday for the first time to amend the government bill that covers the way for Britain's departure from E.U. on January 31.

The proof of residence was demanded to restrain E.U. citizens from severe disadvantage in dealing with the landlords and other officials after the departure of the U.K. from the bloc. Both houses of Parliament must pass the withdrawal agreement bill before January 31, the House of Commons has already voted in favor of this Bill, but the House of Lords has demanded two amendments in the Bill. 

However, on the other hand, the PM Boris Johnson on Monday told African leaders that the United Kingdom would be more open to migrants from the African continent after Brexit. He told the Presidents of Egypt & Kenya that he wanted to make Britain their investment partner of choice.

As for the economic data, at 5:01 GMT, the Rightmove House Price Index from the United Kingdom for January was released, which came in as2.3% in comparison of December's -0.9%. There was a Holiday in the United States which limited the trade volume on Monday and hence gave a light movement to GBP/USD pair.

GBP/USD - Daily Technical Levels

Support Resistance 

1.2975      1.3023

1.2945      1.3043

1.2926      1.3072

Pivot Point: 1.2994

GBP/USD – Daily Forecast

The GBP/USD extends its bearish trend after as it continues to hold below 1.3044 resistance mark. Right now, the Cable is getting support near 1.2960, and it needs to be violated in order to have a more bearish trend in the GBP/USD. The next support will be around 1.2904.

Currently, the GBP/USD is holding at 1.2999, below 50 periods EMA which is suggesting odds of a bearish trend in the GBP/USD pair. Let's look for selling trades below 1.2994.  

All the best for today.