The Analytical Overview of the Main Currency Pairs on 2023.11.22

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0936
• Prev. Close: 1.0910
• % chg. over the last day: -0.24%

The FOMC meeting minutes of November 1, released on Tuesday, were neutral with hawkish notes and supported the dollar. The minutes stated the following: “All participants agreed that the committee was in a position to proceed carefully and that policy decisions at every meeting would continue to be based on the totality of incoming information.” In addition, virtually all FOMC representatives believe that rates will remain restrictive for some time. The dollar’s recovery on Tuesday put pressure on the euro. But, as the ECB remains more hawkish in its policy, the medium-term picture is in favor of further euro strength.

Trading recommendations

• Support levels: 1.0882,1.0822,1.0756,1.0729,1.0700,1.0664,1.0634,1.0609
• Resistance levels: 1.0945,1.0983,1.1004

The trend on the EUR/USD currency pair on the hourly time frame is bullish. After testing the liquidity above 1.0945, the price showed sellers’ reaction and returned behind the level. The correction wave has started. The MACD indicator has become negative, and sellers are dominating intraday. Under such market conditions, buying is better to consider after testing the void liquidity zones near the support level of 1.0882. Selling can be considered from the 1.0945 resistance level but with confirmation on the lower time frames.

Alternative scenario:

if the price breaks the support level of 1.0824 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2500
• Prev. Close: 1.27471.2536
• % chg. over the last day: +0.29%

Yesterday, the Bank of England’s Mann said that the outlook for more sustainable inflation in the UK suggests the need for further monetary tightening. BoE Governor Bailey’s comments on Monday were also hawkish. This allows the British pound to strengthen not only against the US dollar but also against the euro. At the same time, the economic indicators of the UK continue to deteriorate.

Trading recommendations

• Support levels: 1.2504,1.2444,1.2401,1.2373,1.2347,1.2309,1.2186
• Resistance levels: 1.2547

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. After testing the liquidity above 1.2547, the price formed a flat accumulation. The divergence on MACD persists, which suggests a corrective movement. Buying is best sought from the hollow liquidity zones near the moving averages. For selling, it is worth waiting for the price to consolidate below 1.2504, as this level may keep the quotes from further declines.

Alternative scenario:

if the price breaks the support level of 1.2373 and consolidates below, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 148.34
• Prev. Close: 148.38
• % chg. over the last day: +0.03

The Japanese yen failed to maintain a steady rise yesterday even after the Bank of Japan removed the previous barriers to bond yields, which usually led to a stronger currency. In his speech, BoJ Governor Ueda did not say when exactly the BoJ might unwind its ultra-loose policy, but he did detail the prospects for an exit from negative interest rates if incoming data on inflation and wage growth make a compelling case for it.

Trading recommendations

• Support levels: 148.32,147.32,147.02,146.76
• Resistance levels: 149.19,149.57,150.15,150.93,151.43,151.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. Buyers showed initiative from the support level of 147.32. The MACD indicator became positive, and intraday buying pressure prevailed. At the same time, the price has consolidated above the moving averages, indicating a deeper corrective wave. For selling, it is best to wait for the sellers’ reaction to the resistance level at 149.19 or 149.57. Buying can be sought intraday, but only with confirmation and short targets.

Alternative scenario:

if the price consolidates above the resistance level of 151.43, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1978
• Prev. Close: 1999
• % chg. over the last day: +1.06%

Precious metals prices rose moderately on Tuesday, with gold hitting a two-week-high. A weaker dollar in early trading on Tuesday helped precious metals prices as the dollar index fell to a 2-month low. In addition, precious metals were supported by weaker-than-expected US economic reports, which reinforced speculation that the Fed was done raising interest rates. At the moment, the fundamental picture for gold remains favorable.

Trading recommendations

• Support levels: 1985,1973,1968,1955,1933,1918
• Resistance levels: 2004,2009,2021

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Yesterday, the price reached the support level of 2004, followed by a weak seller’s reaction. The bias remains bullish. Under these market conditions, buys can be considered intraday from the moving average lines or from the 1992 support level. Selling can be considered after a liquidity test above the 2009 resistance level, subject to a pullback.

Alternative scenario:

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