The Analytical Overview of the Main Currency Pairs on 2021.11.18

The EUR/USD currency pair

• Prev Open: 1.1321
• Prev Close: 1.1318
• % chg. over the last day: -0.03%

The ECB balance sheet continues to rise steadily, which has a negative impact on the European currency. The consumer price index in Europe remained unchanged at 4.1% as expected. The ECB will keep its soft monetary policy until the end of the year and quite probably until next spring.

• 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 since the 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.

• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
• – US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3428
• Prev Close: 1.3492
• % chg. over the last day: +0.48%

The UK inflation increased faster than expected to the highest level in a decade, increasing pressure on the Bank of England to raise interest rates. Consumer prices rose to 4.2% in annual terms, the fastest pace of growth since November 2011.

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

On the hourly time frame, the trend on GBP/USD is bearish. But the British pound looks more confident than the euro. The MACD indicator has become positive and the price has consolidated above the descending wedge. 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.

The USD/JPY currency pair

• Prev Open: 114.76
• Prev Close: 114.11
• % chg. over the last day: -0.57%

Japan is lagging behind other economies in recovering from the pandemic recession, forcing policymakers to maintain massive fiscal and monetary support even as other advanced economies have already reduced such programs. Japan’s new stimulus package will include a record $488 billion in spending.

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

The global trend on the USD/JPY currency pair is bullish. However, yesterday, the price decreased sharply on the news about the new stimulus program and broke down the local uptrend. The MACD indicator has become negative. Under such market conditions, it’s better to look for buy positions from the buyers’ initiative zone near the moving average. 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: 1.2555
• Prev Close: 1.2610
• % chg. over the last day: +0.44%

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

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

From a technical point of view, the trend of the USD/CAD currency is bullish. The MACD indicator is in the positive zone, but there are signs of divergence, which indicates the weakness of the buyers. 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 or after the price returns to the corridor of 1.2496-1.2598.

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