The Analytical Overview of the Main Currency Pairs on 2021.12.03

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1321
• Prev. Close: 1.1300
• % chg. over the last day: -0.18%

The EU unemployment rate decreased from 7.4% to 7.3%. An ECB official said yesterday that inflation in the region is temporary. The same thing was being said for a year by Jerome Powell, a head of the US Federal Reserve, but recently he changed his rhetoric and stopped using the word “temporary” for inflation. Analysts are confident that the growth of inflation in the EU will continue until the summer-fall of 2022.

Trading recommendations

• Support levels: 1.1263,1.1230,1.1168
• Resistance levels: 1.1371,1.1436,1.1535,1.1613,1.1667,1.1717

From a technical point of view, the EUR/USD on the hour time frame is still bearish. The price is currently trading in a narrow corridor. The MACD indicator has become inactive. Under such market conditions, traders should consider sell positions from the priority change level of 1.1371. Buy trades should be considered only from the support levels of the higher time frame, given the buyers’ initiative, but only with short targets.

Alternative scenario:

if the price breaks out through the 1.1371 resistance level and fixes above, the mid-term uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3279
• Prev. Close: 1.3299
• % chg. over the last day: +0.15%

From a fundamental point of view, the British pound has a mixed background. On the one hand, the growth of the dollar index provokes a decrease in the GBP/USD quotes. On the other hand, the rise in Brent oil prices, with which historically the pound correlates, leads to the British currency strengthening. As a result, the currency pair is trading in a wide corridor without any single dynamics.

Trading recommendations

• Support levels: 1.3232
• Resistance levels: 1.3360,1.3434,1.3507,1.3575,1.3685,1.3748

On the hourly time frame, the trend on GBP/USD is bearish. The MACD indicator has become inactive, but it is still signaling divergence on several time frames. Under such market conditions, traders should consider sell positions from the resistance levels around the moving average. Buy trades should be considered on the support levels of higher time frames, given the buyers’ initiative.

Alternative scenario:

if the price breaks out through the 1.3385 resistance level and consolidates above, the bullish scenario will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 112.71
• Prev. Close: 113.17
• % chg. over the last day: +0.41%

The Japanese Yen is now under pressure because of the Bank of Japan policy, which introduced a new economic stimulus package. At the same time, the US Fed has already been reducing its QE program, so the USD/JPY currency pair will grow in the mid-term.

Trading recommendations

• Support levels: 112.87,112.30
• Resistance levels: 113.79,114.48,115.15,115.50

The global trend on the USD/JPY currency pair is bearish. At the moment, the price is trading in the corridor with the 112.87-113.79 range. There is also a narrowing of liquidity in the form of a “triangle” pattern. Under such market conditions, it is best for traders to look for sell positions from the resistance levels around the moving average or from the upper border of the corridor, but with additional confirmation. Buy positions should be considered from the false breakdown zone or after an impulsive upward movement out of the “triangle.”

Alternative scenario:

if the price rises above 114.52, the uptrend will likely resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2819
• Prev. Close: 1.2805
• % chg. over the last day: -0.11%

From a fundamental point of view, the dollar index is now inclined to rise as the Fed has started cutting the QE program and may accelerate the process at the next meeting. Following the OPEC+ meeting, the world’s largest oil producers left their production increase quotas for January at 400,000 bpd. Analysts expect oil prices to return above $75 a barrel.

Trading recommendations

• Support levels: 1.2729,1.2646,1.2598,1.2571,1.2483,1.2416,1.2388
• Resistance levels: 1.2828

From a technical point of view, the USD/CAD currency trend is bullish. The price is trading flat in the corridor with a range of 1.2729-1.2828. But there is a pressure of buyers to the upper border. The MACD indicator is in the positive zone, but there are signs of divergence. Under such market conditions, it is better to look for buy trades from the lower border of the flat corridor or after a true breakout. Sell deals should be considered from the resistance levels of the higher time frames.

Alternative scenario:

if the price breaks down through the 1.2646 support level and fixes below, the downtrend will likely resume.