EURUSD and GBPUSD continue to fight against the strong dollar

Looking at the EURUSD chart on the daily time frame, we see that the pair is still under a lot of pressure. It is still in lateral consolidation between 1.12000-1.13500. We can draw a trend line on both sides, and now we are waiting to see if we will see a break upper or down. Since the bearish option is stronger, we give it an advantage and based on it our target is 1,10000 support zones.

Bullish scenario:

• We need a new positive consolidation and a break above 1.14000 to say that the EURUSD recovery has begun.
• Then we will have the support of the MA20 moving average, while at 1.14000, we will have the MA50 moving average as a potential obstacle to the bullish trend.
• The next resistance zone is at 1.15000 and above it the next at 1.17000 with additional resistance in the MA200 moving average.

Bearish scenario:

• We need a continuation of this negative consolidation and a break below the bottom line of support.
• A break below 1,11860 will form a new low this year.
• Greater support on the chart awaits us in the zone around 1.10000, the minimum from May last year.

GBPUSD chart analysis

Looking at the pair on the daily time frame, we see that GBPUSD is still under a lot of pressure. Consolidation is still in the zone of this year’s minimum 1.31500-1.32000. we can easily see the break and continuation of the withdrawal of GBPUSD towards the 1.30000 psychological support zone.

Bullish scenario:

• We need a new positive consolidation and a break above 1.33000 in order to get the support of the MA20 running average.
• Our first hurdle is last week’s high at 1.33740, and then the next in the zone around 1.35000.
• Additional resistance at this level can amplify the MA50 moving average.
• We are also approaching the upper trend line at 1.36000, which can be a big obstacle to a longer-term bullish trend.

Bearish scenario:

• We need continued negative consolidation and a break below current support.
• Falling below brings us to new this year minimums; we expect more support in the zone around 1.30000.

Market overview

The British cabinet will meet later on Monday, as pressure is growing on Prime Minister Boris Johnson to restrict the spread of the Omicron virus variant by tightening social restrictions before Christmas.

Britain has reported record levels of COVID-19 cases, and officials and ministers warn that the full effects of the latest wave have yet to be seen.

Omicron, first discovered last month in South Africa and Hong Kong, has raced around the world and reported in at least 89 countries. It is known to be very transmissible, but the severity of the disease it causes remains unclear.

Officials warned last week that hospitalizations could reach new highs as the effects of the latest raid seep through the population.

Any decision to limit the way people can celebrate Christmas would have a high political cost to Johnson. His authority has been undermined by questions about whether he and his staff violated closure rules last year.

Johnson also suffered a huge uprising in parliament last week after lawmakers from his own Conservative Party strongly opposed the tightening of COVID-19 rules.

On Monday, the Japanese parliament approved the first additional budget for 2021, with a record spending of 317 billion dollars, to help the economy withstand the consequences of COVID-19, burdening the largest debt of the industrial world.

The Japanese government issued three additional budgets in the last fiscal year. The 36 trillion yen ($ 317 billion) budget allocates funds to fight COVID-19, including the provision of vaccines and drugs. It is the largest supplementary budget the government has ever implemented. The budget also focuses on promoting tourism, securing corporate financing, fostering green and digital transformation growth, and strengthening semiconductor factories and supply chains.