The Analytical Overview of the Main Currency Pairs on 2023.11.06

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0619
• Prev. Close: 1.0727
• % chg. over the last day: +1.02%

The US unemployment report released on Friday showed weaker-than-expected labor market dynamics. Nonfarm payroll data for October showed that the economy added fewer jobs than expected (150k vs. 180k). In addition, the unemployment rate rose slightly to 3.9%, and average hourly earnings declined month-on-month. Against this backdrop, the US dollar fell sharply on Friday as the weak US unemployment report supported speculation following Wednesday’s FOMC meeting that the Fed’s rate hike regime is over. The probability of a rate hike at the Fed’s December meeting is just 4.3%.

Trading recommendations

• Support levels: 1.0674,1.0609,1.0557,1.0522,1.0495,1.0483
• Resistance levels: 1.0736,1.0768,1.0826

The trend on the EUR/USD currency pair on the hourly time frame has changed upward. The price confidently broke through the priority change level and consolidated above. The MACD indicator is in the positive zone, buying pressure prevails inside the day, and there are no signs of reversal, but there are signs of overbought. At the moment, the price has reached the resistance level, but there is a high probability of testing the liquidity above the resistance level of 1.0746. Buy deals can be looked for after a small correction, as the price has deviated strongly from the average values. The nearest support level is 1.0674. Selling should be considered after a liquidity test above 1.0746 or 1.0768, but with confirmation in the form of the sellers’ reaction.

Alternative scenario:

if the price breaks the support level of 1.0522 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2201
• Prev. Close: 1.27471.2378
• % chg. over the last day: +1.45%

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame changed from bearish to bullish. The price has consolidated above the priority change level and is trading above the moving averages, while the MACD indicator is in the positive zone, and the falling histogram shows price growth, which indicates the strength of buyers. Buying should be sought after a small correction as the price has deviated strongly. The most suitable support level is 1.2288 or 1.2231. Sell trades can be sought after the sellers’ reaction to 1.2381, but there is a high probability of a test of 1.2420 resistance level.

Trading recommendations

• Support levels: 1.2289,1.2231,1.2156,1.2133
• Resistance levels: 1.2381,1.2420,1.2504

Alternative scenario: if the price breaks the support level of 1.2123 and consolidates below, with a high probability the downtrend will likely resume.

Alternative scenario:

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 150.44
• Prev. Close: 149.38
• % chg. over the last day: -0.71%

The Japanese yen is strengthening for the third day in a row. There are two main reasons for the fall of USD/JPY quotes. The first one is the decline of the US dollar, which started to lose ground after the FOMC meeting last week and accelerated its fall after the weak labor market data on Friday. The second reason is that the Japanese Central Bank changed its yield curve control (YCC) policy last week, which was another small but still a step towards policy normalization. But it is too early to talk about a full trend reversal on USD/JPY, as the interest rate differential is still going nowhere and will limit the strengthening of the Japanese currency.

Trading recommendations

• Support levels: 149.24,148.96,147.32,147.02,146.76
• Resistance levels: 149.83,150.14,150.78,151.71

From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bullish. The price corrected to the support area, where buyers showed a reaction to the level of 149.24. The MACD indicator is in the negative zone, with intraday buying pressure. With these market conditions, buy trades are best considered intraday but with confirmation. For selling, the resistance level of 149.83 or 150.143 can be considered, but only with confirmation in the form of a seller’s reaction.

Alternative scenario:

if the price consolidates below the support level at 148.96, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1985.97
• Prev. Close: 1992.66
• % chg. over the last day: +0.34%

On Friday, precious metals prices got a boost from the weak US unemployment report, which was dovish for the Fed’s policy. Gold jumped back above the $2,000 per ounce mark. Economists believe that the risk of expanding conflict in the Middle East will support gold prices, but the end of the Fed’s rate hike cycle will curb the rally in precious metals.

Trading recommendations

• Support levels: 1979,1979,1970,1963,1953
• Resistance levels: 1986,1995.54,2004,2009

From the point of view of technical analysis, the trend on the XAU/USD has changed to an upward trend. At the moment, the price has dived under the moving average lines, and the MACD indicator has turned negative. There is selling pressure inside the day. Under such market conditions, buying can be considered after testing liquidity below 1979, provided buyers react to the level. For sell deals, a resistance level of 1986 can be considered but with intraday confirmation.

Alternative scenario:

if the price breaks and consolidates below the support level of 1974.51, the downtrend will likely resume.