The EUR/USD currency pair

• Prev Open: 1.1368
• Prev Close: 1.1319
• % chg. over the last day: -0.43%

Eurozone GDP growth estimate for Q3 remained at 2.2% as expected. Meanwhile, the euro fell to its lowest level against the dollar since July 2020, its worst performance in 6 years. The reason for this lies in 2 factors. The first is that European economic data is lagging behind US data. The second is that the Fed has already started reducing the QE program, while Christine Lagarde said in her speech yesterday that the ECB will not hurry with cutting the stimulus.

• Support levels: 1.1256
• Resistance levels: 1.1386, 1.1436, 1.1535, 1.1613, 1.1667, 1.1717

From the technical point of view, the EUR/USD on the hour time frame is bearish. The Euro continues to decline against the US dollar. The MACD indicator is in the negative zone, but there is a divergence on the higher time frame, which indicates a coming correction. For rebound, a support level is required. Under such market conditions, traders should consider sell positions from the resistance levels near the moving average, as price has deviated strongly from the averages. Buy trades should be considered only from the support levels of the higher time frame, given the buyers’ initiative, but only with short targets.

Alternative scenario: if the price breaks out through the 1.1535 resistance level and fixes above, the mid-term uptrend will likely resume.

• – ECB President Christine Lagarde’s Speech at 03:20 (GMT+2);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+2);
• – US Building Permits (m/m) at 15:30 (GMT+2);
• – US FOMC Member Williams speaks at 16:10 (GMT+2);
• – US FOMC Member Bowman speaks at 18:00 (GMT+2);
• – US FOMC Member Waller speaks at 19:40 (GMT+2);
• – US FOMC Member Daly speaks at 19:40 (GMT+2);
• – US FOMC Member Evans speaks at 23:05 (GMT+2);
• – US FOMC Member Bostic speaks at 23:10 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3409
• Prev Close: 1.3428
• % chg. over the last day: +0.14%

The UK unemployment rate fell more than expected to 4.3% from 4.5% previously, the lowest rate since July 2020. Employment rose by 247,000 in July-September, exceeding the projected 185,000 increase, while the number of unemployed fell by 152,000. Bank of England Governor Andrew Bailey said next month’s employment and inflation data would be crucial for the central bank while considering whether to raise the interest rate for the first time since the pandemic began.

• Support levels: 1.3360
• Resistance levels: 1.3434, 1.3507, 1.3575, 1.3685, 1.3748

On the hourly time frame, the trend on GBP/USD is bearish. The MACD indicator has become inactive. Under such market conditions, traders should consider sell positions from the resistance levels near the moving average. Buy trades should be considered only from the support levels of the higher time frame, given the buyers’ initiative.

Alternative scenario: if the price breaks out through the 1.3575 resistance level and consolidates above, the bullish scenario will likely resume.

• – UK Consumer Price Index (m/m) at 09:00 (GMT+2).

The USD/JPY currency pair

• Prev Open: 114.05
• Prev Close: 114.81
• % chg. over the last day: +0.67%

A Bank of Japan scheme introduced to support smaller lenders hurt by its ultra-low interest rates has perversely pushed up short-term borrowing costs, further complicating the central bank’s plans to abandon its soft monetary policy. The Japanese yen will continue to decline against major currencies.

• Support levels: 114.29, 113.79, 113.32, 112.87, 112.30
• Resistance levels: 115.15, 115.50

The global trend on the USD/JPY currency pair is bullish. Yesterday, the price broke through the important resistance level and moved further upward. But a divergence appeared on the MACD indicator, which indicates the weakness of the buyers. Under such market conditions, it’s better to look for buy positions from the buyers’ initiative zone near the moving average or from the local trend line. Sell positions should be considered from the resistance levels of higher time frames, given there is sellers’ initiative, but only with short targets.

Alternative scenario: if the price falls below 113.32, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2510
• Prev Close: 1.2560
• % chg. over the last day: +0.40%

The Canadian dollar is a commodity currency, so the USD/CAD currency pair highly depends on the dynamics of the dollar index and oil prices. Yesterday, the dollar index increased while oil prices went down. As a result, the USD/CAD currency pair increased because of the strengthening US currency. Fundamentally, both the dollar index and oil quotes have an upward trend now, so USD/CAD will be trading flat in the medium term.

• Support levels: 1.2496, 1.2416, 1.2388
• Resistance levels: 1.2598, 1.2628, 1.2729

From a technical point of view, the trend of the USD/CAD currency is bullish. The MACD indicator is positive again. Under such market conditions, it is better to look for buy trades from the support levels near the moving average. Sell deals should be considered from the resistance levels of the higher time frame.

Alternative scenario: if the price breaks down through the 1.2416 support level and fixes below, the downtrend will likely resume.

• – Canada Consumer Price Index (m/m) at 15:30 (GMT+2);
• – US Crude Oil Inventories (w/w) at 17:30 (GMT+2).