The Analytical Overview of the Main Currency Pairs on 2023.12.01

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0968
• Prev. Close: 1.0886
• % chg. over the last day: -0.75%

On Thursday, hawkish comments from New York Fed President Williams and San Francisco Fed President Daly pushed bond yields higher and contributed to dollar strength. In addition, a weaker-than-expected Eurozone consumer price report proved dovish for ECB policy and pressured the euro to favor the dollar. The Eurozone Consumer Price Index fell to 2.4% y/y from 2.9% y/y, the smallest increase in 2 years. The core CPI for November also declined to 3.6% y/y from 4.2% y/y. Weakening price pressures have sharply increased the probability of an ECB rate cut by 25 bps at the April 11 meeting.

Trading recommendations

• Support levels: 1.0887,1.0851,1.0822,1.0756,1.0729,1.0700,1.0664
• Resistance levels: 1.0960,1.0994,1.1004,1.1063

The trend on the EUR/USD currency pair on the hourly time frame is bullish. Yesterday, the price chose the selling scenario. The sellers showed their reaction, and the price corrected deeply. Now, the resumption of the rally is in question. The price has found support at the support level of 1.0887. Under these market conditions, buying is better to consider intraday with a target of up to 1.0960. Selling can be considered after an impulsive breakdown of 1.0887 support level with a target of 1.0851.

Alternative scenario:

if the price breaks the support level of 1.0851 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2690
• Prev. Close: 1.2622
• % chg. over the last day: -0.53%

The British pound has been heavily influenced by the US dollar lately, as investors have become less hawkish on the Federal Reserve interest rate path. The recent weak US economic data was the reason for the growth of GBP/USD quotes. In the medium term, the market maintains a bearish view of the dollar, but yesterday’s short-term strengthening of the US currency contributed to the decline of the British pound.

Trading recommendations

• Support levels: 1.2641,1.2600,1.2523,1.2478,1.2448,1.2347,1.2309
• Resistance levels: 1.2672,1.2713,1.2745

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 is correcting within the bullish trend, with a flat accumulation formed above 1.2672, which will now act as a strong resistance zone. The MACD indicator has turned negative. The divergence on the higher time frames has not been filled, so the price may correct even lower. The fall may be down to the support levels around 1.2500. Selling can be sought intraday after the breakdown of the support level at 1.2600 and price consolidation under the level. Buying is best sought from the support level at 1.2599, but only with confirmation in the form of a liquidity grab below and an impulsive return above 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: 147.17
• Prev. Close: 148.19
• % chg. over the last day: +1.37%

The yen was under pressure on Thursday from the strengthening dollar and rising T-note yields. In addition, dovish comments from BoJ board spokesman Nakamura on Thursday depressed the yen when he said that the Japanese economy still needs the YCC yield curve control program and negative interest rates, and now is not the time to adjust monetary policy. The likelihood of a BoJ rate change this winter fell sharply on the back of the comments.

Trading recommendations

• Support levels: 147.70,147.22,146.96,145.89
• Resistance levels: 148.29,149.32,149.75,150.14,150.93,151.43

From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bearish. The price managed to consolidate above 147.22 yesterday, while a false breakdown zone with “locked” sellers’ liquidity was formed below the level. Now, the price is trading in a narrow flat, with the MACD indicator indicating buying pressure. Under such market conditions, buying can be considered from the 147.71 support level, but with confirmation. Buying can also be considered after an impulsive breakout of 148.29. Selling is best considered from the resistance level of 148.29, but with confirmation in the form of a seller’s reaction, as the probability of a breakout of this level is very high.

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: 2045
• Prev. Close: 2036
• % chg. over the last day: -0.44%

The strengthening of the dollar on Thursday was a bearish factor for metal prices. A jump in bond yields on Thursday was a negative factor for precious metals. Gold prices also declined amid hawkish comments from New York Fed President Williams and San Francisco Fed President Daly, who said monetary policy should remain restrictive. On the other hand, gold turned out to be much more resistant to the dollar’s rise than the same euro or the British pound, indicating a continued sentiment in favor of a further rally.

Trading recommendations

• Support levels: 2036,2018,2005,1998,1979,1955,1933,1918
• Resistance levels: 2048,2079

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Now, the price is forming a flat accumulation in the form of the pattern “bullish flag.” This is a classic trend continuation pattern. The MACD indicator has become inactive. Under such market conditions, buying is best to look for an intraday after a breakout and price consolidation above 2048. Selling can be considered only after consolidation below 2035 with the 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.