The Analytical Overview of the Main Currency Pairs on 2023.11.23

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0905
• Prev. Close: 1.0887
• % chg. over the last day: -0.16%

Stronger than expected economic news from the US on Wednesday on weekly jobless claims and the University of Michigan inflation expectations for November supported the moderate growth of the dollar. The strengthening of the dollar triggered selling in the euro. In addition, EUR/USD was affected by comments from ECB Vice President Guindos, who said that investors may not be fully appreciating the risk of a bigger hit to the Eurozone economy from an interest rate hike.

Trading recommendations

• Support levels: 1.0861,1.0822,1.0756,1.0729,1.0700,1.0664,1.0634,1.0609
• Resistance levels: 1.0913,1.0945,1.0983,1.1004

The trend on the EUR/USD currency pair on the hourly time frame is bullish. Yesterday, the price tested the support level of 1.0861, where buyers showed a reaction. The MACD indicator remains in negative territory, but intraday, there is an interception of the initiative. Today is a bank holiday in the US, so the price will likely accumulate in a narrow corridor. Under these market conditions, buying is better to consider after testing the 1.0882 support level, but with confirmation. Selling can be considered from the resistance level of 1.0913, but also with confirmation on the lower time frames.

Alternative scenario:

if the price breaks the support level of 1.0824 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2528
• Prev. Close: 1.27471.2493
• % chg. over the last day: -0.28%

The Office for Budget Responsibility (OBR) provided updated growth forecasts for the UK economy, which were revised down significantly, highlighting the need for productivity improvements. In 2023, growth is expected to exceed the March forecasts, but that’s where the good news ends. In 2024, growth is expected to be a meager increase of 0.7% vs. the previous 1.8%, and in 2025, growth is expected to be 1.4% vs. previous estimates of 2.5%.

Trading recommendations

• Support levels: 1.2438,1.2401,1.2373,1.2347,1.2309,1.2186
• Resistance levels: 1.2504,1.2547

From the point of view of technical analysis, the trend on the GBP/USD currency pair in the hour time frame is bullish. After testing the liquidity above 1.2547, the price impulsively returned below the level of 1.2504, and now a false breakout zone has formed above this level. The MACD indicator is negative, and there is weak buying pressure intraday. There are no optimal entry points for buying now. Selling can be looked for from the resistance level at 1.2504 or from the liquidity void zone above the level.

Alternative scenario:

if the price breaks the support level of 1.2373 and consolidates below, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 148.32
• Prev. Close: 149.53
• % chg. over the last day: +0.82%

The Japanese yen lost some ground against the US Dollar yesterday after the FOMC meeting minutes confirmed the Fed’s more cautious but restrictive stance on monetary policy. The recent weakening of the US Dollar may be a breath of fresh air for the Bank of Japan (BOJ) as if this trend continues, there may no longer be a need to intervene in the FX markets. Also, Japanese government officials said that Japan’s economic outlook has been weakened due to a contraction in domestic demand, which has negatively affected the yen exchange rate.

Trading recommendations

• Support levels: 148.86,148.32,147.32,147.02,146.76
• Resistance levels: 149.75,150.15,150.93,151.43,151.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bearish. Buyers showed initiative from the support level of 147.32, broke through several resistance levels, and consolidated above the moving averages. The MACD indicator has become positive, but intraday sellers once again dominate, having actively shown initiative from the resistance level at 149.75. Buying can be sought intraday from the support level of 148.86 or from 148.32 if there is a stronger decline.

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: 1999
• Prev. Close: 1990
• % chg. over the last day: -0.45%

A decline in weekly jobless claims and an unexpected rise in inflation expectations from the University of Michigan led to a rise in bond yields. Gold has an inverse correlation to government bond yields. Hence, the rise in yields led to a decline in precious metals prices. The weakening of geopolitical risks in the Middle East also led to a covering of gold positions. Yesterday, Hamas agreed to release 50 hostages from the Gaza Strip in exchange for a four-day ceasefire with Israel and the release of 150 Palestinian prisoners.

Trading recommendations

• Support levels: 1990,1979,1955,1933,1918
• Resistance levels: 1998,2004,2009,2021

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Yesterday, the price reached the 1990 support level, followed by a buyers’ reaction. The bias remains bullish. Under these market conditions, buying can be considered intraday from the moving average lines. Selling can be considered after testing above the resistance level 1998, subject to a pullback. Given the banking holiday in the US, weak volatility is expected today.

Alternative scenario:

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