The Analytical Overview of the Main Currency Pairs on 2022.11.24

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0302
• Prev. Close: 1.0394
• % chg. over the last day: +0.89%

According to the November Fed meeting minutes released on Wednesday, Federal Reserve officials expect to move to a smaller interest rate hike soon. The main reason is concern that a rapid rate hike could seriously affect financial stability and the economy. Markets had largely expected the Fed to reduce the intensity of its policy tightening, and the FOMC minutes confirmed this. This situation has returned investors’ interest in risky assets.

Trading recommendations

• Support levels: 1.0340,1.0193,1.0092,1.0043,0.9968
• Resistance levels: 1.0430,1.0504

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is trading above the moving averages, and the MACD indicator is positive again. On the background of the dollar index decline, buying pressure has resumed. It is best to consider the buy deals from the support level of 1.0340, but with additional confirmation. Sell deals can be considered from the resistance level of 1.0430, but it is also better with confirmation, as the level has already been tested, and the price can easily reach 1.0504.

Alternative scenario:

if the price breaks down through the support level of 1.0092 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1884
• Prev. Close: 1.2052
• % chg. over the last day: +1.41%

Preliminary data on British economic activity beat expectations. The index of business activity (PMI) in the manufacturing sector, as well as in the services sector, remained unchanged compared to the previous month. Despite the figures being below the 50 mark, indicating a recessionary scenario, there are signs that business activity may recover slightly. The pound sterling is showing good momentum, and out of the main basket of currencies, along with the Canadian dollar, is showing resilience to the rise of the dollar index. This indicates that investor confidence in the British pound is recovering.

Trading recommendations

• Support levels: 1.1945,1.1684,1.1476,1.1418,1.1172,1.1093,1.0915,1.0817
• Resistance levels: 1.2147,1.2167

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price is trading above the level of the moving averages. The MACD indicator has become positive, and there is buying pressure. Under such market conditions, it is better to look for buy deals from the support level of 1.1945, but with confirmation. Sell deals are best sought on intraday time frames from resistance levels of 1.2147 or 1.2167, but also better with confirmation.

Alternative scenario:

if the price breaks down from the 1.1684 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 141.23
• Prev. Close: 139.58
• % chg. over the last day: -1.18%

There was a bank holiday in Japan yesterday, so the dynamics of the USD/JPY quotes depended only on the dollar index. In general, the fundamental situation has mostly stayed the same. The Bank of Japan will keep ultra-low rates at least till the spring of 2023 and will continue to stimulate the economy, while the US Federal Reserve will raise the interest rates till the spring of 2023. The widening gap between rates will be negative for the Japanese currency.

Trading recommendations

• Support levels: 138.51,137.65,136.80
• Resistance levels: 140.75,143.17,145.16,146.06,147.34,148.82,150.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The MACD indicator has become negative, and there is slight sellers’ pressure. Under such market conditions, buy trades can be searched for on the intraday time frames from the support level of 138.51, but only with confirmation. Sell deals can be searched from the resistance level of 140.75, provided there is a reversal or a false breakout.

Alternative scenario:

If the price fixes above 145.84, the uptrend will likely resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3371
• Prev. Close: 1.3353
• % chg. over the last day: -0.13%

According to analysts, the decline in consumer spending could be the result of a concerted effort by the Bank of Canada to fight inflation with a sharp interest rate hike cycle that raised the interest rate to 3.75%. Falling retail sales lowered expectations for a 50 basis point increase at the December meeting. Experts are predicting that the Bank of Canada is likely to show a 25 basis point increase at its next meeting.

Trading recommendations

• Support levels: 1.3281,1.3212
• Resistance levels: 1.3386,1.3458,1.3508,1.3608,1.3682,1.3776,1.3855

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bearish. The price has corrected to the support levels. The MACD indicator became negative, and there is a slight sellers’ pressure inside the day. The best way to sell is to consider the resistance level of 1.3386, but with confirmation. Buy trades should be considered on the lower time frames from the support level of 1.3281, but with additional confirmation in the form of a reverse initiative.

Alternative scenario:

if the price breaks out and consolidates above the resistance level of 1.3508, the uptrend will likely resume.