The Analytical Overview of the Main Currency Pairs on 2023.11.28

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0943
• Prev. Close: 1.0952
• % chg. over the last day: +0.08%

ECB Head Christine Lagarde is beginning to mislead investors and traders again. Back on Friday, Lagarde indicated that the ECB had done enough, and now it was time to keep rates at the current level and analyze economic data. But yesterday, Lagarde turned on the “hawk” again when she said that inflation in the Eurozone has been running high for too long and that the ECB is keeping a close eye on the exchange rate. This indicates that there is still disagreement within the ECB over future policy.

Trading recommendations

• Support levels: 1.0941,1.0887,1.0851,1.0822,1.0756,1.0729,1.0700,1.0664
• Resistance levels: 1.0964,1.0983,1.1004

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is trading above the moving averages. The MACD indicator is positive, but there are the first signs of divergence. A technical correction is around the corner. Under such market conditions, it is better to consider buy deals from the support level of 1.0941 but with confirmation and short targets. Selling can be considered from the resistance level of 1.0964, but only with confirmation on the lower time frames in the form of sellers’ initiative.

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: 1.2598
• Prev. Close: 1.27471.2625
• % chg. over the last day: +0.21%

Yesterday, Bank of England Governor Andrew Bailey warned that bringing inflation back to the target (2%) would be difficult and that the current restrictive policy is hurting economic growth. Market expectations for the rate last week indicated a probability of a Bank of England (BoE) rate cut between 90-100 basis points in 2024, but the current probability is around 60 basis points. For the British pound, this is an additional factor to strengthen, but given the strong projected US GDP data this week, the US dollar may temporarily retake the lead.

Trading recommendations

• Support levels: 1.2600,1.2523,1.2478,1.2448,1.2347,1.2309,1.2186
• Resistance levels: 1.2641,1.2764

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price reached the resistance level at 1.2641, where buyers showed a reaction. The MACD indicator is in the positive zone, but the divergence persists and widens, indicating that the upward momentum is running out. Price is likely to make another high update to grab liquidity, and then a corrective move may begin. Buying is best sought from moving averages with confirmation on intraday time frames and short targets. Sell deals can be sought intraday after a liquidity test above 1.2641 and an impulsive move back below the level.

Alternative scenario:

if the price breaks the support level of 1.2448 and consolidates below, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 149.41
• Prev. Close: 148.67
• % chg. over the last day: -0.50%

The Japanese service price index for October rose by 2.3% YoY, which exceeded expectations of 2.1% and was the biggest increase in the last 4 years. This data is bullish for the yen as it may prompt the Bank of Japan (BoJ) to tighten monetary policy faster than economists expect. Now, it is very important to keep an eye on the inflation data and the wage index. If both indicators show stable growth, it will accelerate the process of policy normalization by the BoJ. Due to these expectations, the Japanese yen is now showing stability not only against the US dollar but also against other currencies.

Trading recommendations

• Support levels: 147.82,147.32,147.02,146.76
• Resistance levels: 148.64,149.41,149.75,150.14,150.93,151.43,151.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bearish, but it is close to changing. On Friday, sellers showed initiative from the resistance level of 149.75, and now the price has declined to the support zone in the discount zone. The MACD indicator has turned negative, with no signs of reversal, with sellers dominating intraday. Buying can be looked for intraday from the 147.81 support level but with confirmation in the form of buyers’ initiative. Sell deals are best considered from the 148.64 resistance level. But if the price breaks this level, the road to 149.41 will be opened.

Alternative scenario:

if the price consolidates above the resistance level of 150.14, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2001
• Prev. Close: 2014
• % chg. over the last day: +0.64%

GThe weakening of the dollar on Monday supported the metal prices. The weakening dollar is a positive factor for both gold and silver, as demand for the precious metals is increasing, with gold becoming cheaper in dollar equivalent. As a result, gold rose to a 1-month-high yesterday, and silver jumped to a 3-month-high. All the fundamentals remain in place for further gains in gold. However, this week’s strong US GDP report may give temporary support to the dollar, which could put pressure on precious metals. Investors may partially close their positions the day before the report is released.

Trading recommendations

• Support levels: 2008,1998,1979,1955,1933,1918
• Resistance levels: 2022

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The price is holding above the moving averages but is starting to form a flat accumulation above the 2008 level. At the same time, the MACD indicator indicates divergence already on several time frames. Under such market conditions, buying from the moving average lines with a target of 2022 is best. Selling can be considered only after testing liquidity above 2022 with an impulsive initiative of sellers. At the moment, such conditions have not been formed.

Alternative scenario:

if the price breaks below the support level of 1965, the downtrend will likely resume.