The Analytical Overview of the Main Currency Pairs on 2023.11.09

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0698
• Prev. Close: 1.0708
• % chg. over the last day: +0.09%

On Wednesday, hawkish comments from the ECB supported the EUR after ECB Governing Council representatives Makhlouf and Kazaks warned that further ECB rate hikes may be necessary to control inflation. In addition, the ECB’s monthly survey of consumer inflation expectations showed that Eurozone 1-year inflation expectations rose to a 5-month high in September, which is hawkish for ECB policy.

Trading recommendations

• Support levels: 1.0677,1.0657,1.0634,1.0609,1.0557,1.0522,1.0495,1.0483
• Resistance levels: 1.0726,1.0768,1.0826

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is again trading above the moving averages. The MACD indicator has become positive, but the momentum indicates some weakness of the buyers. Buying can be sought from the support levels at 1.0677 or, in case of a deeper decline, from 1.0657. Falling below 1.0634 is undesirable as it will start to change the sentiment, and the uptrend will be jeopardized. Sell deals should be considered after testing the resistance level of 1.0726, but with confirmation in the form of 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: 1.2292
• Prev. Close: 1.27471.2283
• % chg. over the last day: -0.07%

Bank of England (BoE) Governor Andrew Bailey echoed the view of BoE Chief Economist Huw Pill that inflation will continue to fall. The BoE Governor forecasts inflation at 2% for two years, with Bailey indicating that policy should be restrictive for an extended period of time as upside risks to inflation remain. Overall, no further rate hikes are planned, with cumulative interest rate cuts rising to 65 bps by December 2024.

Trading recommendations

• Support levels: 1.2268,1.2231,1.2156,1.2133
• Resistance levels: 1.2361,1.2427,1.2504

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 pound is trading at the levels of moving averages without any active dynamics. The MACD indicator is inactive, and volatility has decreased. Buying should be sought from the support level of 1.2268 or, in case of a deeper decline in price, from 1.2231. As a confirmation, it is better to wait for buyers’ reaction to the level. Sell trades can be looked for after the sellers’ reaction to the level of 1.2361.

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: 150.31
• Prev. Close: 150.97
• % chg. over the last day: +0.44%

The yen fell to a 1-week low against the dollar on Wednesday. The decline in the 10-year Japanese JGB yield to a 2-week low on Wednesday weakened the interest rate differential and pressured the yen. In addition, central bank divergence is weighing on the yen as the Bank of Japan maintains its soft policy and maintains low-interest rates while other global central banks tighten their monetary policies.

Trading recommendations

• Support levels: 150.60,149.84,149.16,148.96,147.32,147.02,146.76
• Resistance levels: 151.04,151.71

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. Quotes are steadily growing, breaking through all resistance levels, while the moving averages are perfectly supporting the movement. The MACD indicator is above zero, but there are signs of divergence. Now, the price has reached the resistance zone, where sellers can be active. Under such market conditions, buy trades are best considered intraday from the support level of 150.60, but with confirmation. For sell deals, traders can consider the resistance level of 151.05, but only with confirmation in the form of sellers’ reactions.

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: 1969
• Prev. Close: 1950
• % chg. over the last day: -0.97%

Gold fell to a 3-week low yesterday, with the dollar index and government bond yields trading mixed. This indicates that investors and hedge funds are fixing earlier open positions on the back of declining geopolitical risk. Yesterday, market participants were hoping that Fed Chairman Powell would set a hawkish tone when he spoke at a statistical conference of US central banks. However, the Fed Chairman did not touch upon the topic of monetary policy. Another speech by Powell is expected today.

Trading recommendations

• Support levels: 1933,1918
• Resistance levels: 1960,1971,1979,1989,2004,2009

From the point of view of technical analysis, the trend on the XAU/USD has changed to a downtrend. The price broke through the priority change level and consolidated below. At the moment, the price is trading below the moving average lines, and the MACD indicator remains negative, but there are signs of divergence. With the price accumulating below the support level, there is a high probability of a corrective move-up. Under these market conditions, buying can be considered intraday, but with confirmation in the form of buyer reaction and short targets. For sell deals, the resistance level of 1960 can be considered, but with confirmation in the form of sellers’ reaction.

Alternative scenario:

if the price breaks above the resistance level of 1989, the uptrend will likely resume.