The Analytical Overview of the Main Currency Pairs on 2022.11.04

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 0.9813
• Prev. Close: 0.9748
• % chg. over the last day: -0.67%

The seasonally adjusted unemployment rate in the Eurozone was 6.6% in September 2022, down from 6.7% in August. Europe’s labor market thus remains resilient, allowing the ECB to be more flexible in its interest rate hike cycle. Typically, when the labor market starts to decline and unemployment rises, the ECB immediately changes its monetary policy to a less hawkish one. But as long as the labor market is strong, the ECB has free hands.

Trading recommendations

• Support levels: 0.9755,0.9702,0.9601
• Resistance levels: 0.9823,0.9871,1.0055,1.0111,1.0162,1.0230

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is still bullish. The price is trading below the moving levels but above the priority change level of 0.9755. The MACD indicator is in the negative zone, but sellers’ pressure is weak due to divergence. Under such market conditions, buy trades should be considered from the support level of 0.9755, but with additional confirmation, as the level has already been tested. Sell deals can be considered from the resistance level of 0.9823 or 0.9871, but with confirmation.

Alternative scenario:

if the price breaks down through the support level of 0.9755 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1387
• Prev. Close: 1.1158
• % chg. over the last day: -2.05%

The Bank of England expectedly raised its rate by 75 BPS to 3.00%. This is the seventh rate hike this year and the highest cost of borrowing since November 2008. The Bank of England continues to struggle with critically high inflation (CPI 10.1% YoY). Due to the difference in rates between USD (4.00%) and GBP (3.00%), dollar assets remain more attractive to investors, and therefore we should not expect a global GBP/USD reversal upwards just yet. The British pound fell sharply against the US dollar after the UK Central Bank said it expects the recession to last through 2023 and the first half of 2024.

Trading recommendations

• Support levels: 1.1172,1.1093,1.0915,1.0817
• Resistance levels: 1.1336,1.1450,1.1578,1.1698,1.1816,1.1901

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price is trading below the moving averages but above the priority change level. The MACD indicator is negative, but sellers’ pressure is weak. Under such market conditions, buy trades can be considered from the support level of 1.1172, but it is better after confirmation because the level has already been tested. Sell trades are best to look for on intraday time frames, the nearest resistance level is 1.1336, 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: 147.78
• Prev. Close: 148.18
• % chg. over the last day: +0.27%

Yesterday, Japan’s Finance Minister Suzuki said that in the near future, the government does not plan to intervene in the currency market. Thus, the situation on the USD/JPY currency pair remains the same. The difference between the interest rates of the Bank of Japan and the US Federal Reserve System keeps increasing. This situation will have a negative effect on the Japanese currency.

Trading recommendations

• Support levels: 147.41,146.37,145.50,144.91,144.19,143.00
• Resistance levels: 148.82,150.00,151.05

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The price is trading at the level of the moving averages, the balance is forming. The MACD indicator has become inactive again, but buyer pressure remains. Under such market conditions, buy trades can be looked for on intraday time frames from the support level of 147.41 or 146.37. Sell deals can be looked for from the resistance level of 148.82, but only with additional confirmation since 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: 1.3707
• Prev. Close: 1.3747
• % chg. over the last day: +0.29%

Canada’s total number of construction permits fell by 17.5% in September, the largest recorded monthly decline. For the first time since September 2019, all survey components showed a monthly decline, with both the residential and non-residential sectors. This is a sign that the real estate market is heading for a recession. If today’s unemployment data also points to problems, the Bank of Canada will revise its monetary policy toward a more dovish tone.

Trading recommendations

• Support levels: 1.3657,1.3586,1.3515,1.3454
• Resistance levels: 1.3776,1.3855,1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair has changed to bullish. The price confidently broke through and consolidated above the moving averages and the priority change level. The MACD indicator is negative now, there is seller’s pressure on the lower time frames. Buy trades should be considered on the lower time frames from the support level of 1.3657 or 1.3586. For sell deals, it is best to consider the resistance level of 1.3776, but only after the additional confirmation.

Alternative scenario:

if the price breaks down and consolidates below the support level of 1.3586, the downtrend will likely resume.