The Analytical Overview of the Main Currency Pairs on 2023.12.13

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0760
• Prev. Close: 1.0793
• % chg. over the last day: +0.31%

The US Consumer Price Index for November decreased to 3.1% y/y from 3.2% y/y, which was in line with expectations. The November CPI was the lowest in the last five months. The core inflation report (excluding food and energy prices) for November came in at plus 4.0% y/y and matched expectations. The euro received support from signs of confidence in the Eurozone economy after expectations for German economic growth in the December ZEW survey unexpectedly rose to a 9-month high. The US Federal Reserve will hold its monetary policy meeting today. No rate hikes are expected at this meeting, so the focus will be on the inflation outlook, the economic outlook, and the likelihood of a rate cut.

Trading recommendations

• Support levels: 1.0769,1.0754,1.0700,1.0664
• Resistance levels: 1.0828,1.0847,1.0894,1.0961,1.0994,1.1004

The trend on the EUR/USD currency pair on the hourly time frame has changed to a downtrend. But the price is close to changing the trend. Yesterday, on the publication of CPI news, the price reached the priority change level but failed to close above. However, the MACD indicator is still positive, and the support level of 1.0769 keeps the price from going lower. Selling can be looked for from the resistance level of 1.0828, but only with confirmation, as the level has already been tested. Buy deals can be considered from 1.0769 or 1.0754, but also with confirmation in the form of buyers’ reactions.

Alternative scenario:

if the price breaks the resistance level at 1.0828 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2550
• Prev. Close: 1.2561
• % chg. over the last day: +0.09%

The British pound remained relatively unchanged against the Euro and the Dollar after the UK employment report showed signs of weakness. It now seems almost certain that wages, including bonuses, will not rise above 8% in the UK. This is a positive for the Bank of England’s (BoE) fight against inflation. Job vacancies are also falling, with jobless claims rising. Today, the UK will release GDP data for November as well as the industrial production report. Weak data is expected, so the British pound may be under pressure.

Trading recommendations

• Support levels: 1.2506,1.2478,1.2448,1.2347,1.2309
• Resistance levels: 1.2614,1.2651,1.2687,1.2723,1.2745.

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price extended yesterday’s flat range and is now trading between the levels of 1.2506 and 1.2614. It is quite difficult to predict where the movement from the flat range will occur. Only the lower time frames will help with this. Sell deals can be looked for from the resistance level of 1.2614 but on the condition of a reversal reaction. Buying is best to look for from 1.2506, but also with intraday confirmation, as the price may drop to 1.2478.

Alternative scenario:

if the price breaks the resistance level of 1.2614 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 146.11
• Prev. Close: 145.44
• % chg. over the last day: -0.46%

Japan’s Producer Price Index declined to 0.3% y/y in November from 0.9% y/y in October, the lowest in 2 years. The decline in producer inflation is dovish for BoJ policy. Japan’s central bank governor will face a major test at next week’s monetary policy meeting, where he is expected to support the prospects for an end to negative rates while tempering excitement over the imminence of such a move. More than 80% of economists expect the BoJ to end its negative rate policy next year, with half of them citing April as the most likely month.

Trading recommendations

• Support levels: 144.51,142.59
• Resistance levels: 146.03,146.50,147.35,147.83,148.51,149.32,149.75,150.14.

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. Yesterday, the price found the support level at 144.51, where the buyers showed a moderate reaction. The MACD indicator has become inactive, with the price trading at the level of the moving averages. If the US Fed Chairman Powell sets a hawkish tone at the press conference today, the dollar may get temporary support, which will hurt the yen. Sell trades can be sought from the resistance level of 146.03, provided sellers take the initiative on the lower time frames. The level of 146.50 is also suitable for selling. Buying should be sought from the support level of 144.51, but also with confirmation from buyers.

Alternative scenario:

if the price consolidates above the resistance level of 147.40, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1981
• Prev. Close: 1979
• % chg. over the last day: -0.10%

Gold and silver prices changed little after the US inflation report. Investors’ focus has, therefore, shifted to today’s US Federal Reserve meeting, with a focus on the prospect of a rate cut in 2024. Following the decline in inflation, markets are betting that the Fed will cut rates five times in 2024, with a 25 bps cut possible as early as March or April. However, Fed chief Jerome Powell is likely to go against these expectations and set a more hawkish tone at a press conference today. In this case, the dollar may get temporary support, which will put pressure on gold.

Trading recommendations

• Support levels: 1966,1949
• Resistance levels: 1979,1991,2007,2027,2040,2058,2079,2145

From the point of view of technical analysis, the trend on the XAU/USD is bearish. The price broke the support level of 1979 and consolidated below it. There is a high probability of a decline to 1966. The MACD indicator is in the negative territory, while the divergence remains. The support level of 1966 and 1949 can be considered for buying but with confirmation in the form of buyers’ reactions and a short stop loss. Selling can be looked for from the 1979 resistance levels near the moving averages but with confirmation in the form of a sellers’ initiative.

Alternative scenario:

if the price breaks and consolidates above the resistance level of 2040, the uptrend will likely resume.