The Analytical Overview of the Main Currency Pairs on 2021.11.05

The EUR/USD currency pair

• Prev Open: 1.1612
• Prev Close: 1.1552
• % chg. over the last day: -0.52%

After the ECB announced that its stimulus program won’t be cut this year, analysts changed their forecasts and expect an interest rate hike in Europe from 2023. Yesterday, the ECB spokesman De Kos said that at the moment, it is unclear about how long the current rise in inflation will last.

• Support levels: 1.1535, 1.1502, 1.1453
• Resistance levels: 1.1573, 1.1618, 1.1645, 1.1667, 1.1717, 1.1772

From the technical point of view, the EUR/USD on the hour time frame is bearish. But the price managed to return above the breakdown level, which indicates a possible false break move. The MACD indicator also indicates a divergence. Under such market conditions, traders should consider sell positions from the resistance levels near the moving average. It is best to look for buy trades from the support levels of lower time frames, but only with short targets.

Alternative scenario: if the price breaks out through the 1.1667 resistance level and fixes above, the mid-term uptrend will likely resume.

• – German Industrial Production (m/m) at 09:00 (GMT+2);
• – Eurozone Retail Sales (m/m) at 12:00 (GMT+2);
• – US Nonfarm Payrolls (m/m) at 14:30 (GMT+2);
• – US Unemployment Rate (m/m) at 14:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3687
• Prev Close: 1.3498
• % chg. over the last day: -1.40%

The central bank of Great Britain did not change its monetary policy. The Bank of England kept the interest rate at 0.1% and asset purchases at 895 billion pounds per month. Against this news, the British pound has sharply fallen. Analysts are postponing expectations of the Bank of England’s first- rate hike until February next year.

• Support levels: 1.3482, 1.3360
• Resistance levels: 1.3562, 1.3616, 1.3685, 1.3748, 1.3780, 1.3831, 1.3886

On the hourly time frame, the trend on GBP/USD is bearish. The MACD indicator became negative, but there are signs of oversold, and the price has reached the resistance level of the higher time frame. Traders can look for buy trades on the lower time frames now, but only with short targets. It is best to look for sell deals from the resistance levels around the moving average, as a price has deviated strongly from the averages.

Alternative scenario: if the price breaks out through the 1.3685 resistance level and consolidates above, the bullish scenario will likely resume.

The USD/JPY currency pair

• Prev Open: 113.99
• Prev Close: 113.74
• % chg. over the last day: -0.22%

In “urgent proposals” to implement Prime Minister Fumio Kishida’s vision of “new capitalism,” the group applied to the government to encourage businesses to raise wages using incentives, including tax breaks and subsidies. In general, the Japanese Yen is heavily influenced by the dollar index now, as Japan’s stimulus program will remain until the end of the year.

• Support levels: 113.42, 112.30, 111.53, 110.99, 110.65
• Resistance levels: 114.48, 115.15

The main trend of the USD/JPY currency pair is bullish. The price is trading in a wide price corridor; there are signs of narrowing liquidity in the form of a “triangle”. The MACD indicator has become inactive. Under such market conditions, it’s better to look for buy positions from the buyers’ initiative zones on the lower time frames. Sell positions should be considered from the resistance levels of a higher time frame, given there is sellers’ initiative.

Alternative scenario: if the price falls below 112.30, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2389
• Prev Close: 1.2455
• % chg. over the last day: +0.53%

The Canadian dollar is a commodity currency, so the USD/CAD currency pair highly depend on the dynamics of the dollar index and oil prices. The dollar index slightly increased yesterday, while oil prices decreased by the end of the day. As a result, the USD/CAD quotes significantly increased due to the strengthening of the US currency.

• Support levels: 1.2428, 1.2352, 1.2306, 1.2260
• Resistance levels: 1.2518, 1.2565, 1.2628, 1.2729, 1.2774

From the technical point of view, the trend of the USD/CAD currency has changed to bullish. The price broke through the priority change level and consolidated above. Under such market conditions, it is better to look for buy trades from the support levels, given there is the buyers’ initiative. Sell deals should be considered from the resistance levels of the higher time frame.

Alternative scenario: if the price breaks down through the 1.2351 support level and fixes below, the downtrend will likely resume.

• – Canada Unemployment Rate (m/m) at 14:30 (GMT+2);
• – Canada Ivey PMI (m/m) at 16:00 (GMT+2).