The Analytical Overview of the Main Currency Pairs on 2021.11.08

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1552
• Prev. Close: 1.1567
• % chg. over the last day: +0.13%

Europe is again in the epicenter of the COVID-19 Pandemic. According to the WHO, hospitalizations of patients with Covid-19 have more than doubled in just one week, with cases approaching record levels due to the more infectious Delta strain. All of this could lead to new quarantine restrictions in European countries, undoubtedly leading to lower economic numbers.

Trading recommendations

• Support levels: 1.1535,1.1502,1.1453
• Resistance levels: 1.1573,1.1618,1.1645,1.1667,1.1717,1.1772

From the technical point of view, the EUR/USD on the hour time frame is bearish. But the price managed to return above the breakdown level, which indicates a possible false break move. The MACD indicator also shows a divergence. Under such market conditions, traders should consider sell positions from the resistance levels near the moving average. It is best to look for buy trades from the false breakdown zone.

Alternative scenario:

if the price breaks out through the 1.1667 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: 1.3496
• Prev. Close: 1.3494
• % chg. over the last day: -0.01%

The British pound is under intense selling pressure after the central bank of England did not tighten its monetary policy. Before the meeting, analysts were sure that it would happen, and the Governor of the Bank of England said that such a possibility existed. The British currency is now looking less confident than the Euro. The British pound may be supported only by the growing Brent oil quotes, as these two instruments are historically correlated.

Trading recommendations

• Support levels: 1.3482,1.3360
• Resistance levels: 1.3562,1.3616,1.3685,1.3748,1.3780,1.3831,1.3886

On the hourly time frame, the trend on GBP/USD is bearish. The MACD indicator is in the negative zone, but there are signs of divergence. After Friday’s false breakdown, traders can look for buy trades on the lower time frames with the expectation of a technical rebound. It is best to look for sell deals from the resistance levels around the moving average, as prices have deviated strongly from the averages.

Alternative scenario:

if the price breaks out through the 1.3685 resistance level and consolidates above, the bullish scenario will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 113.75
• Prev. Close: 113.39
• % chg. over the last day: -0.32%

At the moment, there is no fundamental reason for the JPY to strengthen. Firstly, the Bank of Japan has kept its monetary policy soft until the end of the year. Secondly, the Fed started to tighten its monetary policy, making the dollar index stronger and leading to the growth of USD/JPY quotes. Thirdly, investors often use the Japanese yen for borrowing to buy assets such as stocks, which usually negatively affect the Japanese currency.

Trading recommendations

• Support levels: 113.42,112.30,111.53,110.99,110.65
• Resistance levels: 114.48,115.15

The main trend of the USD/JPY currency pair is bullish. The price attempted to break down the “triangle,” but the movement was weak, and the buyers returned the price to the wide corridor, forming a false breakdown zone below. The MACD indicator has become inactive. Under such market conditions, it’s better to look for buy positions from the buyers’ initiative zone on the lower time frames. Sell positions should be considered from the resistance levels of a higher time frame, given there is sellers’ initiative.

Alternative scenario:

if the price falls below 112.30, the uptrend will likely be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2455
• Prev. Close: 1.2452
• % chg. over the last day: -0.02%

The Canadian dollar is a commodity currency, so the USD/CAD currency pair highly depends on the dollar index dynamics and oil prices. On Friday, the dollar index remained at the same level, while oil prices increased by the end of the day. As a result, USD/CAD quotes slightly decreased due to strengthening the Canadian currency. The unemployment rate in Canada fell from 6.9% to 6.7%.

Trading recommendations

• Support levels: 1.2428,1.2352,1.2306,1.2260
• Resistance levels: 1.2518,1.2565,1.2628,1.2729,1.2774

From the technical point of view, the USD/CAD currency trend has changed to bullish. The price broke through the priority change level and consolidated above. The MACD indicator has become inactive, and there are no signs of reversal. Under such market conditions, it is better to look for buy trades from the support levels, given there is the buyers’ initiative. Sell deals should be considered from the resistance levels of the higher time frame.

Alternative scenario:

if the price breaks down through the 1.2351 support level and fixes below, the downtrend will likely resume.