The Analytical Overview of the Main Currency Pairs on 2022.11.29

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0371
• Prev. Close: 1.0339
• % chg. over the last day: -0.31%

European Central Bank President Christine Lagarde showed her hawkish side on Monday, pointing out that inflation is not yet at its peak, thus adding more uncertainty to what further action the ECB will take. Isabel Schnabel warned last week against further monetary tightening. At the same time, the ECB’s chief economist Philip Lane posted a dovish blog post on Friday, speaking out against aggressive rate hikes and higher wage growth this year as a sign of higher structural inflation.

Trading recommendations

• Support levels: 1.0361,1.0284,1.0193,1.0092,1.0043,0.9968
• Resistance levels: 1.0420,1.0504

The trend on the EUR/USD currency pair on the hourly time frame is bullish. But the price is trading at the level of moving averages, and the MACD indicator is in the negative zone, indicating some weakness of the buyers. The price is adjusting. Buy trades are best considered from the support level of 1.0361, but with additional confirmation. Sell deals can be considered from the resistance level of 1.0421, but it is better with confirmation in the form of a reverse initiative.

Alternative scenario:

if the price breaks down through the support level of 1.0194 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2054
• Prev. Close: 1.1954
• % chg. over the last day: -0.83%

Britain won’t meet its energy goals without tens of billions of pounds in additional funding for a new government program to make homes more energy efficient. Business, Energy, and Industrial Strategy Minister Grant Shapps said Monday that the government would spend an additional 1 billion pounds ($1.2 billion) on a new plan to insulate homes in A to D council tax bands that people with lower to middle incomes typically own. Additional spending outside the announced budget will create negative investor sentiment.

Trading recommendations

• Support levels: 1.1945,1.1684,1.1476,1.1418,1.1172,1.1093,1.0915,1.0817
• Resistance levels: 1.2043,1.2147,1.2167

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 higher at the level of the moving averages. The MACD indicator has become negative, and there is a slight sellers’ pressure inside the day. Under such market conditions, it is better to look for buy deals from the support level of 1.1945, but with confirmation. Sell trades are best sought on intraday time frames from resistance levels of 1.2043, but they are also better with confirmation.

Alternative scenario:

if the price breaks down of the 1.1800 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 139.25
• Prev. Close: 138.90
• % chg. over the last day: -0.25%

Japan’s unemployment rate remained at 2.6%. The number of people with jobs is up about half a million from a year ago, mainly due to growth in the hotel and medical sectors. While the numbers show that good working conditions will put upward pressure on wages, they still show that labor market tightness remains well below pre-pandemic levels. The numbers have not led to the wage growth sought by Bank of Japan Governor Haruhiko Kuroda, who has repeatedly said that Japan needs wages to grow at about 3% to meet the central bank’s 2% sustainable inflation target.

Trading recommendations

• Support levels: 137.65,136.80
• Resistance levels: 139.23,140.75,143.17,145.16,146.06,147.34,148.82,150.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The MACD indicator has become inactive. The price is traded at the level of moving averages, and a narrow price range is formed. Under such market conditions, buy trades can be sought on the intraday time frames from the support level of 137.65, but only with confirmation, since the level has already been tested. Sell deals can be sought from the resistance level of 139.23, provided that 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: 1.3390
• Prev. Close: 1.3494
• % chg. over the last day: +0.77%

Canada’s current account balance (seasonally adjusted) recorded an $11.1 billion deficit in the third quarter after a surplus in the first two quarters of 2022. This deficit mainly reflects a much lower surplus in goods and a higher deficit in investment income. Meanwhile, direct investment abroad exceeded direct investment in Canada, resulting in a net outflow of $12.9 billion. This is a negative sign for the Canadian dollar, which is now strengthening only due to rising oil prices.

Trading recommendations

• Support levels: 1.3386,1.3281,1.3212
• Resistance levels: 1.3479,1.3508,1.3608,1.3682,1.3776,1.3855

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bearish. But the MACD indicator is in the positive zone, and there is buying pressure on the lower time frames inside the day. Sharp fluctuations in oil prices create big uncertainty in the price. The oil market is extremely tense right now due to the introduction of the price ceiling and the turmoil in China, the largest importer. For sell deals, it is best to consider the resistance level of 1.3479, but with confirmation. Buy trades are worth considering on the lower time frames from the support level of 1.3386, but also with additional confirmation.

Alternative scenario:

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