The Analytical Overview of the Main Currency Pairs on 2023.11.17

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0846
• Prev. Close: 1.0851
• % chg. over the last day: +0.05%

The main bullish factor for the euro on Thursday was the weakening of the dollar. Weak economic news from the US led to lower bond yields and weakened the dollar’s interest rate differential. The dollar was also hurt by dovish comments from Fed officials Cook and Mester, who made it clear that they favor the Fed pausing rate hikes. The EU Commission said that the region will be able to avoid a technical recession, but the latest economic data shows extremely weak statistics – industrial production has been falling since last year, and the GDP forecast was changed downward.

Trading recommendations

• Support levels: 1.0828,1.0756,1.0727,1.0700,1.0664,1.0634,1.0609
• Resistance levels: 1.0891,1.0916

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price has reached the resistance level of 1.0891, and since there are no fundamental factors for strengthening at the moment, the price may consolidate here for some time. The MACD indicator has become inactive. Under such market conditions, it is better to consider buy deals after testing the liquidity below 1.0828. There are no optimal entry points for selling now, as there is no structure breakdown after testing 1.0891.

Alternative scenario:

if the price breaks the support level of 1.0664 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2414
• Prev. Close: 1.27471.2412
• % chg. over the last day: -0.02%

Despite the absence of bullish factors, the British pound continues to build a series of up days, regaining lost ground after the pair’s decline during most of the second half of the year. The Brit’s recent rise has been driven mainly by a sell-off in the US Dollar, triggered by deteriorating fundamental data on the world’s largest economy, and following Tuesday’s sharp fall in US inflation. How long the British pound will ignore the rapidly deteriorating economic situation in the UK is unknown, but sooner or later, all these factors will come down sharply on the pound, which will cause sharp sell-offs.

Trading recommendations

• Support levels: 1.2361,1.2427,1.2361,1.2309,1.2186
• Resistance levels: 1.2403,1.2504

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The situation is very similar to the Eurodollar, only here the price corrected to the nearest support levels, where buyers showed their reaction. The MACD indicator is inactive. Given the reaction of buyers after testing liquidity below 1.2403, traders can consider buying if the price regains its footing above this level. But if the price fails to consolidate above 1.2403, the pound may sell off to 1.2361.

Alternative scenario:

if the price breaks the support level of 1.2186 and consolidates below, with a high probability the downtrend will resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 151.31
• Prev. Close: 150.72
• % chg. over the last day: -0.39%

The yen rose moderately against the Dollar on Thursday. Better-than-expected Japanese trade news released on Thursday provided support for the yen. Japan’s October exports rose by 1.6% y/y, which was stronger than expectations of 1.0% y/y. In addition, October imports fell by 12.5% y/y, weaker than expectations of 12.8% y/y. Japan’s tertiary sector business activity index for September declined by 1.0% m/m, which was weaker than expectations of 0.1% m/m and was the largest decline in the last six months.

Trading recommendations

• Support levels: 149.62,149.83,149.19,148.96,147.32,147.02,146.76
• Resistance levels: 151.15,151.79,151.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish, but against the background of the dollar decline, the yen received temporary support. At the moment, the price has reached the support level of 149.62, and this is the last boundary level before the medium-term trend change, so it will be important for the buyers to hold this level. Under such market conditions, buy trades are best considered after buyers’ reaction to the level of 149.62. There are no optimal entry points for selling right now.

Alternative scenario:

if the price consolidates below the support level at 149.83, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1959
• Prev. Close: 1980
• % chg. over the last day: +1.07%

The decline in global bond yields on Thursday was favorable for precious metals, as gold rose to a weekly high and silver to a 2-month-high. Also, the demand for gold as a safe haven was slightly aided by high-level talks between the US and China, during which Xi Jinping and Joe Biden met in San Francisco. Apparently, the meeting led to some improvement in Sino-US relations, with both sides agreeing to reopen military channels.

Trading recommendations

• Support levels: 1968,1955,1933,1918
• Resistance levels: 1991,2004,2009

From the point of view of technical analysis, the trend on the XAU/USD has changed to an upward one. The price confidently broke through the priority change level and consolidated above. And since there is no sellers’ reaction, there is a high probability of further growth up to the resistance level of 2004. Under such market conditions, buying can be considered intraday from the moving average lines or from the support level of 1968. There are no optimal entry points for selling now, but it is worth watching the sellers’ reaction to the resistance level of 1991.

Alternative scenario:

if the price breaks below the support level of 1955, the downtrend will likely resume.