The Analytical Overview of the Main Currency Pairs on 2023.11.20

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0847
• Prev. Close: 1.0911
• % chg. over the last day: +0.59%

The dollar index remained under pressure on Friday as Tuesday’s US inflation news and weekly employment data indicating a slowdown in the labor market strengthened speculation that the Fed will refuse to raise interest rates. Comments from US Fed officials also confirmed this assumption. In addition, hawkish comments from the ECB on Friday supported EUR/USD after representatives of the ECB Governing Council Nagel and Holzmann expressed their opposition to any easing of the ECB monetary policy in the medium term. At this point, the fundamental picture is building in favor of further euro strength.

Trading recommendations

• Support levels: 1.0882,1.0822,1.0756,1.0729,1.0700,1.0664,1.0634,1.0609
• Resistance levels: 1.0945,1.0983,1.1004

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price seeks to test the liquidity above 1.0945. The MACD indicator remains positive, but the first signs of divergence have appeared. Under such market conditions, it is better to consider buying after testing liquidity void zones near the support level of 1.0882. There are no optimal entry points for selling right now for a reversal, and traders need to see a liquidity grab above.

Alternative scenario:

if the price breaks the support level of 1.0729 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2406
• Prev. Close: 1.27471.2461
• % chg. over the last day: +0.44%

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 MACD indicator is not yet showing signs of divergence. Buyers’ pressure is inside the day, so traders should expect further price growth up to the resistance level of 1.2504. It is best to buy from the liquidity void zones near the moving averages. For sell deals, it is worth waiting for sellers’ reaction to test liquidity above 1.2504.

Trading recommendations

• Support levels: 1.2361,1.2427,1.2361,1.2309,1.2186
• Resistance levels: 1.2504

Alternative scenario: if the price breaks the support level of 1.2186 and consolidates below, the downtrend will likely resume.

Alternative scenario:

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 150.63
• Prev. Close: 149.62
• % chg. over the last day: -0.67%

The short covering of the dollar favors the Japanese currency. But the Japanese yen remains vulnerable to further declines due to recent comments from Bank of Japan (BOJ) Governor Ueda and Japanese Finance Minister Akazawa. On Friday, the BoJ governor said that the BOJ would consider ending the YCC and negative rate controls if the BOJ sees that inflation is consistently and sustainably on target. In turn, Akazawa indicated that any currency intervention would be aimed at stopping excessive volatility, and the ministry would not intervene just because the yen was weakening.

Trading recommendations

• Support levels: 148.79,147.32,147.02,146.76
• Resistance levels: 149.19,149.71,150.15,150.93,151.43,151.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY has changed to a downtrend. The price broke through the priority change level and consolidated below. At the moment, the price has reached the support level of 148.79 and tested the liquidity below. The MACD indicator shows divergence, and there is a high probability of a corrective bounce. For sell deals, it is best to wait for a pullback to the moving averages, as the price has deviated strongly from the lines. Buying can be looked for intraday, but only with confirmation in the form of structure change and short targets.

Alternative scenario:

if the price consolidates above the resistance level of 151.43, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1981
• Prev. Close: 1981
• % chg. over the last day: 0.00%

Gold may get additional fuel for growth during the current holiday week in the United States. First, tensions in the Middle East show no signs of abating. Second, markets are pricing in a 47.9% rate cut from the Fed in May 2024 compared to 29.6% a week ago. Third, Tuesday’s FOMC minutes may show positive signs in the form of lower inflation forecasts and softening US employment data. This could lead to a further decline in the US dollar, which is positive for precious metals. But it should be noted that, at the moment, it is difficult for gold to hold above the $2,000 per ounce mark.

Trading recommendations

• Support levels: 1968,1955,1933,1918
• Resistance levels: 1992,2004,2009

From the point of view of technical analysis, the trend on the XAU/USD is bullish. On Friday, the price reached the resistance level of 1992, where sellers showed a reaction. The price corrected to the moving average lines where a new accumulation has started to form. The bias remains bullish. Under these market conditions, buy deals can be considered intraday from the moving average lines or from the 1968 support level on a deeper correction, as the price may test liquidity below the flat. Selling can be looked for from the upper boundary of the forming flat, but only with confirmation on the lower time frames.

Alternative scenario:

if the price breaks below the support level of 1955, the downtrend will likely resume.