The Analytical Overview of the Main Currency Pairs on 2023.11.24

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0886
• Prev. Close: 1.0901
• % chg. over the last day: +0.14%

The preliminary data on the German Manufacturing PMI exceeded the consensus forecast of 41.2 and amounted to 42.3, indicating a partial recovery in the face of the persistent recession. The Business Activity Index in the services sector also exceeded expectations and reached 48.7 against the expected 48.5. The slight improvement does not change the economic forecasts for Germany but may indicate a less strong contraction of GDP expected in the IV quarter.

Trading recommendations

• Support levels: 1.0887,1.0851,1.0822,1.0756,1.0729,1.0700,1.0664,1.0634
• Resistance levels: 1.0913,1.0945,1.0983,1.1004

The trend on the EUR/USD currency pair on the hourly time frame is bullish. As predicted yesterday, the price traded in a narrow corridor. The MACD indicator became inactive, and moving averages also do not show a pronounced trend. Under such market conditions, it is better to consider buying after testing the support level of 1.0887, but with confirmation. If there is a breakdown of 1.0887, the price will likely try to test liquidity below 1.0851. Selling could be considered from the 1.0922 or 1.0945 resistance level, but also with confirmation on the lower time frames in the form of sellers’ initiative.

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: 1.2482
• Prev. Close: 1.27471.2532
• % chg. over the last day: +0.41%

The latest UK business activity data from S&P Global outperformed both last month’s results and forecasts. The manufacturing PMI rose from 44.8 to 46.7 (forecast 45), while the services PMI rose from 49.5 to 50.5 (forecast 49.5). The services sector halted a three-month decline, and manufacturers began to report less severe cuts to production schedules. The data suggests a moderate improvement in the UK economy, albeit with concerns over growth and inflation in the coming months. GBP/USD quotes hit a new ten-week high after the publication.

Trading recommendations

• Support levels: 1.2522,1.2478,1.2438,1.2373,1.2347,1.2309,1.2186
• Resistance levels: 1.2559,1.2587,1.2641

From the point of view of technical analysis, the trend on the GBP/USD currency pair in the hour time frame is bullish. Yesterday, the price tested the resistance level of 1.2559, the sellers’ reaction to the level was restrained, so there is a high probability of further growth up to 1.2587. The MACD indicator is in the positive zone, and divergence remains. Buying is best to look for from moving averages with confirmation on intraday time frames. The support level of 1.2522 should support the price. If this level is broken, then buying should be sought from 1.2478. Selling can be sought intraday after breaking the support level 1.2522 but with short targets.

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: 149.54
• Prev. Close: 149.56
• % chg. over the last day: +0.01%

In Japan, Consumer Price Inflation accelerated from 3.0% to 3.3% y/y in October (forecast 3.4% y/y), the first time in four months. On a month-on-month basis, inflation rose by 0.7%, the fastest increase on record. Both goods prices (1.3% MoM) and services prices increased (0.2% MoM). The main reason for the sharp rise in prices was the reduction of state subsidies for utility bills. Rising inflation increases the probability that the Bank of Japan will give up control of the YCC yield curve as early as in the first quarter of 2024 and then conduct the first rate hike in 2Q24 if wage growth continues to accelerate.

Trading recommendations

• Support levels: 148.86,148.32,147.82,147.32,147.02,146.76
• Resistance levels: 149.75,150.15,150.93,151.43,151.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bearish, but it is close to changing. Buyers showed initiative from the support level of 148.86, and now the price is forming a balance in the range of 148.86-149.75. The MACD indicator has turned positive, but intraday sellers are dominating again. Buying can be looked for intraday from the 148.86 support level or from 148.32 if there is a stronger decline. Sell deals are best considered after testing liquidity above 149.75.

Alternative scenario:

if the price consolidates above the resistance level of 150.14, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1990
• Prev. Close: 1993
• % chg. over the last day: +0.15%

Gold prices rose in early trading yesterday, but then activity declined sharply in the US due to Thanksgiving. Short-term factors for gold’s strength began to fade — a steady US labor market supported the dollar on Wednesday. At the same time, a temporary truce between Hamas and Israel reduced geopolitical risks in the Middle East. But in the medium and long term, gold still has room to grow on the back of future interest rate cuts by leading central banks.

Trading recommendations

• Support levels: 1990,1979,1955,1933,1918
• Resistance levels: 1998,2004,2009,2021

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The price is forming a flat accumulation in the range of 1990-1998. The MACD indicator is inactive, with the moving averages also showing no dynamics. Under such market conditions, it is best to wait for the price to exit this accumulation. Selling can be considered after the breakdown and consolidation of the price below 1990, but with short targets. Buying is best considered from the liquidity void near the 1979 support level. Or after a breakout and holding of the price above 1998.

Alternative scenario:

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