The Analytical Overview of the Main Currency Pairs on 2022.11.02

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 0.9882
• Prev. Close: 0.9873
• % chg. over the last day: -0.09%

The US Fed is likely to raise the rate by 0.75% today. This scenario is already in the price movement, so the speech of the US Federal Reserve Chairman Jerome Powell will be of most interest. If Mr. Powell hints that the Central Bank needs to take a slower rate hike, it could lead to a sharp drop in the dollar Index and a rise in the European currency. Conversely, hawkish statements that the US Fed will stay on its current course could further strengthen the dollar Index.

Trading recommendations

• Support levels: 0.9873,0.9835,0.9755,0.9601.
• Resistance levels: 0.9928,1.0055,1.0111,1.0162,1.0230

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is trading at the level of the moving averages. The MACD indicator is in the negative zone, but sellers’ pressure is weak due to the presence of divergence. Under such market conditions, buy trades should be considered from the support level of 0.9873, but with additional confirmation, since the level has already been tested. Sell deals can be considered from the resistance level of 0.9928, but also with confirmation.

Alternative scenario:

if the price breaks down through the support level of 0.9834 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1465
• Prev. Close: 1.1482
• % chg. over the last day: +0.15%

The UK manufacturing sector started the last quarter of the year weakly. Production declined for the fourth consecutive month due to a sharp drop in new orders, weak export demand, and supply chain disruptions. The seasonally adjusted purchasing managers’ Index (PMI) fell to a 29-month low of 46.2 in October, down from 48.4 in September. Weakening global economic conditions, lower demand in China, the war in Ukraine, and ongoing Brexit-related problems that are holding back export performance were cited as reasons.

Trading recommendations

• Support levels: 1.1466,1.1337,1.1172,1.1093,1.0915,1.0817
• Resistance levels: 1.1578,1.1698,1.1816,1.1901

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame is bullish. The price is trading at the level of the moving averages. The MACD indicator is negative, there is a divergence, and buyers’ pressure is still present. Under such market conditions, buy trades can be considered from the support level of 1.1466 or 1.1337, but better after confirmation. Sell trades are best to look for on intraday time frames, the nearest resistance level is 1.1578, but also better with confirmation in the form of a reverse initiative.

Alternative scenario:

if the price breaks down of the 1.1172 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 148.74
• Prev. Close: 148.23
• % chg. over the last day: +0.34%

Japanese Finance Minister Shun’ichi Suzuki said Tuesday that the country’s currency interventions were a covert operation to maximize the impact. But analysts think Mr. Suzuki is being disingenuous, as there had been talking of intervention long before the intervention itself. In any case, the aim was achieved – the Japanese yen has strengthened against the dollar and now is resisting falling. Experts think that a lot will depend on the US Federal Reserve policy, and if there are hints for a slower rate of increase today, the dollar Index might lose its strength, which would lead to a wide sideways movement or a slow strengthening of the yen. But let’s not forget that the interest rate differential still points to the USD/JPY rising.

Trading recommendations

• Support levels: 146.64,145.50,144.91,144.19,143.00
• Resistance levels: 148.09,148.82,147.75,148.64,148.64,150.00,151.05

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The price is traded on the moving averages. The MACD indicator has become negative again, but the buyers’ pressure remains. Under such market conditions, buy trades can be sought on the intraday time frames from the support level of 146.64, but only after the confirmation. Sell deals can be searched from the resistance level of 148.09 or 148.82, but only with additional confirmation, as the level has already been tested.

Alternative scenario:

If the price fixes above 150.00, the uptrend will likely resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3619
• Prev. Close: 1.3629
• % chg. over the last day: +0.07%

Bank of Canada (BoC) Governor Tiff Macklem indicated that the Central Bank expects further rate hikes, but the further pace of increase has not yet been determined. According to Macklem, how much further rates rise will depend on how monetary policy works, how supply-side problems are handled and how inflation responds to this tightening cycle. But it was also said that the tightening phase is coming to an end.

Trading recommendations

• Support levels: 1.3569,1.3515,1.3454
• Resistance levels: 1.3721,1.3855,1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bearish. The price is trading at the level of moving averages, wide-volatility balance is formed. The MACD indicator has become inactive, there is a slight buying pressure. The best way to sell is to consider the resistance level of 1.3721, but only after the additional confirmation. Buy trades should be considered on the lower time frames from the support level of 1.3569 or 1.3542, but also better after confirmation.

Alternative scenario:

if the price breaks out and consolidates above the resistance level of 1.3721, the uptrend will likely resume.