The Analytical Overview of the Main Currency Pairs on 2023.11.07

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0722
• Prev. Close: 1.0716
• % chg. over the last day: -0.06%

The US Dollar initially opened lower on Monday on ideas that the Fed’s rate hiking regime is over and that the Fed may cut interest rates by mid-2024. But hawkish comments from Fed Vice Chair Brainard helped the dollar recover early losses when she said the US economy was performing exceptionally well and that most forecasters were taking recession off the table. The dollar’s recovery on Monday prompted the liquidation of long positions in the euro.

Trading recommendations

• Support levels: 1.0674,1.0634,1.0609,1.0557,1.0522,1.0495,1.0483
• Resistance levels: 1.0736,1.0768,1.0826

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is trading at the level of moving averages. The MACD indicator has turned negative, and intraday selling prevails. The price is correcting. Buy deals can be sought from the support levels at 1.0674 or, in case of a deeper decline, from 1.0634. Falling below the 1.0634 is undesirable, as it will start to change the sentiment, and then the uptrend will be jeopardized. Selling should be considered after testing the resistance level at 1.0727, 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: 1.2361
• Prev. Close: 1.27471.2342
• % chg. over the last day: -0.15%

The UK is already seeing a steady rise in unemployment, and the prospect of zero economic growth in 2024 is setting the country’s citizens up for a challenging year. UK economic growth is tapered off while inflation continues to heat up, painting a stagflation picture of the UK economy. High inflation and high interest rates are dampening demand, leading businesses to cut costs, including laying off workers. As a result, the pound sterling’s prospects for further growth are fading.

Trading recommendations

• Support levels: 1.2288,1.2231,1.2156,1.2133
• Resistance levels: 1.2381,1.2427,1.2504

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. At the moment, the price is correcting to the nearest support level. The MACD indicator has turned negative, and there is a weak selling pressure inside the day. Buying should be sought from the support level of 1.2288 or, in case of a deeper price decline, from 1.2231. Sell trades can be sought after the sellers’ reaction at 1.2381.

Alternative scenario:

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

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 149.35
• Prev. Close: 150.06
• % chg. over the last day: +0.47%

The rise in the Nikkei Stock Index (JP225) to a 1.5-month high on Monday reduced the demand for the yen as a safe haven. In addition, the yen fell on dovish comments from Bank of Japan Governor Ueda, who said that negative interest rates will remain in Japan until the end of the year. Bank of Japan Governor Ueda said that it is unlikely that the BOJ will have the data needed to end negative interest rates before the end of the year.

Trading recommendations

• Support levels: 149.66,149.16,148.96,147.32,147.02,146.76
• Resistance levels: 150.27,150.78,151.71

From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bullish. On Friday, the price corrected to the support area, where buyers showed a reaction to the 149.24 level. The MACD indicator returned to the positive territory, with intraday buying pressure. Under these market conditions, buy trades are best-considered intraday but with confirmation. For selling, the resistance level of 150.27 or 150.78 can be considered, but only with confirmation in the form of the sellers’ 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: 1993
• Prev. Close: 1978
• % chg. over the last day: -0.75%

The rise in global bond yields on Monday had a negative impact on precious metals prices. That said, the slight de-escalation of the war between Israel and Hamas reduced geopolitical concerns in the Middle East and demand for precious metals as a safe haven. While the geopolitical situation in the Middle East has yet to be resolved, there seems to be growing optimism that a broader regional conflict can be averted. The recovery in the dollar index on Monday was also another bearish factor for metals. At the moment, the $2,000/oz level is a real stumbling block for gold and continues to be unyielding.

Trading recommendations

• Support levels: 1970,1967,1963,1953
• Resistance levels: 1979,1990,2004,2009

From the point of view of technical analysis, the trend on the XAU/USD has changed to an upward trend, but it is close to changing. At the moment, the price has dived under the moving average lines, and the MACD indicator remains negative. There is selling pressure intraday. Under these market conditions, buying could be considered after testing liquidity below 1970, provided buyers react to the level. Going below 1967 will change the priority in this time frame. For sell deals, the resistance level of 1979 can be considered, but with confirmation intraday.

Alternative scenario:

if the price breaks and consolidates below the support level of 1967, the downtrend will likely resume.