The Analytical Overview of the Main Currency Pairs on 2023.11.01

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0614
• Prev. Close: 1.0575
• % chg. over the last day: -0.37%

Eurozone Consumer Price Index for October declined from 4.3% y/y to 2.9% y/y in September, weaker than expected, 3.1% y/y, and the lowest inflation rate in 2 years. Core CPI (excluding food and energy prices) fell to 4.2% y/y from 4.5% y/y in September, which matched expectations and was the lowest level in 15 months. The US Federal Reserve will hold its monetary policy meeting today. The FOMC committee is expected to leave the rate unchanged, so traders’ focus will be on Jerome Powell’s speech at the press conference after the meeting. If Powell’s rhetoric is more “hawkish,” it will hit risky assets, such as the euro and the British pound.

Trading recommendations

• Support levels: 1.0563,1.0522,1.0495,1.0483
• Resistance levels: 1.0597,1.0620,1.0670,1.0693,1.0736

The trend on the EUR/USD currency pair on the hourly timeframe is a downtrend. Yesterday, the price tested the resistance level of 1.0670 and returned on the impulse movement. The MACD indicator became negative, and intraday selling pressure prevailed. Sell trades can be looked for from the resistance level of 1.0597 or 1.0620, provided sellers react to the level. Buying can be sought from the support level of 1.0563, but it is also subject to buyers’ reactions. There is a high probability of further price decline with the aim to test liquidity below 1.0522.

Alternative scenario:

if the price breaks the resistance level of 1.0670 and consolidates above it, the uptrend is likely to be resumed.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2167
• Prev. Close: 1.27471.2144
• % chg. over the last day: -0.19%

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly timeframe is a downtrend. Pound Sterling yesterday tested liquidity above the resistance level of 1.2175, forming a false breakout zone above. Under these market conditions, sell trades can be looked for after testing the 1.2175 resistance level, but with confirmation in the form of sellers’ reactions. Selling can also be sought from the moving average lines but with confirmation intraday. Buy deals should be looked for from the support level of 1.2104 or after testing the liquidity below 1.2088.

Trading recommendations

• Support levels: 1.2104,1.2088,1.2070
• Resistance levels: 1.2175,1.2233,1.2289,1.2332,1.2384

Alternative scenario: if the price breaks the resistance level at 1.2233 and consolidates above it, the uptrend is likely to be resumed.

Alternative scenario:

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 149.03
• Prev. Close: 151.61
• % chg. over the last day: +1.73%

The Japanese yen suffered significant losses against the US dollar and the euro on Tuesday after the Bank of Japan’s monetary policy statement. The USD/JPY quotes rose by 1.7% to 151.60, which it has not reached since last October. At the same time, EUR/JPY rose about 1.2%, breaking above 160.00 and reaching its highest level in 15 years. The yen’s fall was exacerbated by news that the Ministry of Finance has not intervened in the currency markets recently. Traders believed that the government took measures to support the currency earlier this month, but official data refute this.

Trading recommendations

• Support levels: 150.78,150.31,149.75,149.45,148.80,147.32,147.02,146.76
• Resistance levels: 151.92

From the technical point of view, the medium-term trend on the currency pair USD/JPY is upward. The price is trading above the moving averages. The MACD indicator is in the positive zone, without signs of reversal but with signs of overbought. Buy trades are best considered after a small pullback, as the price has deviated strongly from the averages. Support levels of 150.78 or 150.31 will be suitable, but with confirmation in the form of buyers’ reactions. For selling, the resistance level 151.92 can be considered, but only with confirmation and short targets.

Alternative scenario:

if the price consolidates below the support level at 148.80, the downtrend is likely to be resumed.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1995.92
• Prev. Close: 1983.76
• % chg. over the last day: -0.61%

Precious metals prices posted moderate losses on Tuesday. A stronger dollar on Tuesday depressed gold and silver prices. Meanwhile, silver prices also declined amid weak global economic news that pointed to weaker demand for industrial metals. But precious metals still retain appeal as a “safe haven” due to increased geopolitical risks in the Middle East amid reports that Israel is shelling militant targets in Lebanon, which has the potential to widen the conflict.

Trading recommendations

• Support levels: 1976.45,1971.40,1962.50,1953.40,1928.04,1907.78,1883.47
• Resistance levels: 1991.29,1997.24

From the point of view of technical analysis, the trend on the XAU/USD has changed to an upward trend. Currently, the price is trading below the moving average and has reached the support level of 1976.45. The MACD indicator has turned negative. Under such market conditions, buy deals can be considered from the level of 1976.45, but with confirmation on intraday timeframes in the form of buyers’ reactions. Also, the support level of 1971.21 can be considered for buying if the price goes below. Selling can be considered from the 1991.29 resistance level, but also with confirmation.

Alternative scenario:

if the price breaks and consolidates below the support level of 1953.40, the downtrend is likely to resume.