Daily analysis of major pairs for December 21, 2015

Last week, the USD/JPY tested the demand level at 120.50 and later rallied to test the supply level at 123.50. Afterwards, the price dropped by 230 pips to close below the supply level at 121.50. In face of these wild swings, the bias on the market is bearish, which means that the support level at 121.00 would be easily tested.

EUR/USD: Last week, the EUR/USD reached the resistance line at 1.1050 (and almost the support line at 1.0800). This is a real threat to the current bullish outlook, and a further bearish movement of 150 pips would mean the bullish outlook is completely illogical. Until then, this remains a bear market.

USD/CHF: After testing the support level at 0.9800, the USD/CHF has been making some vivid bullish attempts, all in the context of a downtrend. At this juncture, it is not easy to predict the movement of the market, but the bearish bias would not be rendered invalid as long as the resistance level at 1.0050 is not overcome.

GBP/USD: Based on our expectation, the Cable fell by 300 pips last week, reaching the accumulation territory at 1.4900. There is a strong Bearish Confirmation Pattern in the market and there is a possibility that the Cable would continue dropping further and further. Therefore, any rallies seen in the market should be taken as short-selling opportunities.

USD/JPY: Last week, the USD/JPY tested the demand level at 120.50 and later rallied to test the supply level at 123.50. Afterwards, the price dropped by 230 pips to close below the supply level at 121.50. In face of these wild swings, the bias on the market is bearish, which means that the support level at 121.00 would be easily tested.

EUR/JPY: Last week, this market moved sideways from Monday to Thursday, and broke downwards on Friday. The southward break was significant enough to result in a bearish outlook, which means that the market would continue its weakness as long as the EUR is weak.

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