The Analytical Overview of the Main Currency Pairs on 2023.11.15

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0691
• Prev. Close: 1.0878
• % chg. over the last day: +1.75%

The dollar index fell sharply by 1.50% on Tuesday and hit a 2-month low. The dollar fell sharply after US consumer prices fell more than expected, reinforcing the view that the Federal Reserve has finished raising interest rates. The dollar extended its losses amid dovish comments from FRB President Richmond Barkin, who said he supported a pause in the Fed’s work. The dollar’s sharp decline on Tuesday was a favorable factor for the euro. In addition, stronger-than-expected German investor confidence provided support for EUR/USD after expectations for German economic growth in a new ZEW survey rose more than expected to an 8-month high.

Trading recommendations

• Support levels: 1.0756,1.0727,1.0700,1.0664,1.0634,1.0609
• Resistance levels: 1.0891

The trend on the EUR/USD currency pair on the hourly time frame is bullish. Yesterday, EUR/USD quotes grew due to a sharp decline in the dollar. The MACD indicator became positive with overbought signs. With a high probability the trend will continue after a small consolidation. Traders should not expect a deep correction. It is better to consider buying from the levels of moving averages. There are no optimal entry points for selling now. To look for sell deals, it’s necessary to wait for liquidity capture above some resistance level.

Alternative scenario:

if the price breaks the support level of 1.0664 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2262
• Prev. Close: 1.27471.2498
• % chg. over the last day: +1.92%

UK inflation fell sharply in October to its lowest level in two years. The fall was mainly because last year’s sharp rise in electricity tariffs was not included in the year-on-year comparison. The consumer price index fell from 6.7% to 4.6% (forecast 4.7%) y/y, and core inflation fell from 6.1% to 5.7% (forecast 5.8%) y/y. Given the latest labor market data, which showed a decline in wages (one of the factors behind the rise in inflation), the Bank of England will not tighten monetary policy any further but may keep rates at a high level for a long time.

Trading recommendations

• Support levels: 1.2427,1.2361,1.2309,1.2186
• Resistance levels: 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. The situation is very similar to the Eurodollar, only here the price has reached the resistance level, but there is no liquidity grab above and no reaction of sellers. Therefore, further growth of quotes is expected. The MACD indicator remains positive, without signs of divergence, but with signs of overbought. Buying should be sought from the levels of moving averages. Sell trades can be looked for after the sellers’ reaction at 1.2504.

Alternative scenario:

if the price breaks the support level of 1.2186 and consolidates below, with a high probability the downtrend will resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 151.71
• Prev. Close: 150.37
• % chg. over the last day: -0.89%

Japan’s Gross Domestic Product (GDP) contracted by 0.5% year-on-year in the third quarter, mainly due to lower business spending, lack of recovery in consumer spending, and higher imports. The data suggests that Japan’s economic recovery is more fragile than previously thought and needs further support from the government and central bank. The results may give the Bank of Japan reason to postpone any policy changes towards normalization in the face of ongoing uncertainties, including currency weakness.

Trading recommendations

• Support levels: 150.15,149.83,149.19,148.96,147.32,147.02,146.76
• Resistance levels: 151.09,151.79,151.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish, but against the background of the dollar decline, the yen received temporary support. At the moment, the price reached the 150.15 support level, followed by the reaction of buyers, but amid the lack of liquidity grab below, there is a high probability the price will test this level again. Under such market conditions, buy trades are best considered after a false breakdown of 150.15 or, in case of a stronger decline, from 149.83. Sell trades can be looked for from the moving averages but with confirmation.

Alternative scenario:

if the price consolidates below the support level at 149.83, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1947
• Prev. Close: 1964
• % chg. over the last day: +0.87%

Precious metals prices went sharply upward on Tuesday. The decline in the dollar index to a 2-month low was a favorable factor for metals. In addition, a sharp decline in global bond yields on Tuesday supported precious metals. At the moment, the fundamental picture will favor further strengthening of metal prices.

Trading recommendations

• Support levels: 1951,1933,1918
• Resistance levels: 1971,1979,1989,2004,2009

From the point of view of technical analysis, the trend on the XAU/USD is bearish but close to change. Yesterday, the price rose sharply and reached the priority change level. And since there is no sellers’ reaction, there is a high probability of further growth up to the resistance level of 2004. Under such market conditions, buying can be considered intraday after the price consolidates above 1971. There are no optimal entry points for selling now.

Alternative scenario:

if the price breaks above the resistance level of 1971, the uptrend will likely resume.