By JustForex
The EUR/USD currency pair
- Prev Open: 1.0531
- Prev Close: 1.0568
- % chg. over the last day: +0.35%
On Wednesday, the dollar fell as US Treasury yields drop amid fears the US economy could slide into recession. It happened after Federal Reserve Chairman Jerome Powell said raising interest rates could lead to an economic slowdown. Investors fear that aggressive interest rate hikes by major central banks to curb inflation could lead to a global slowdown or recession. Higher rates have strengthened the dollar, but the euro has been rising recently thanks to plans by the European Central Bank to raise rates to curb inflation as well.
- Support levels: 1.0531, 1.0408, 1.0379
- Resistance levels: 1.0611, 1.0680, 1.0723
From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. But the pressure of buyers is increasing, the MACD indicator has become positive, and the price is close to changing the trend. Under such market conditions, sell deals can be considered from the resistance level of 1.0611, but only after the additional confirmation. A price move above 1.0611 will change the priority. Buy trades are best to look for on intraday time frames from the support level of 1.0531, but only with confirmation and short targets.
Alternative scenario: if the price breaks out through the 1.0611 resistance level and fixes above, the uptrend will likely resume.
- – Eurozone French Manufacturing PMI (m/m) at 10:15 (GMT+3);
- – Eurozone French Services PMI (m/m) at 10:15 (GMT+3);
- – Eurozone German Manufacturing PMI (m/m) at 10:30 (GMT+3);
- – Eurozone German Services PMI (m/m) at 10:30 (GMT+3);
- – Eurozone ECB Economic Bulletin at 11:00 (GMT+3);
- – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
- – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
- – Eurozone EU Leaders Summit at 13:00 (GMT+3);
- – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
- – US Manufacturing PMI (m/m) at 16:45 (GMT+3);
- – US Services PMI (m/m) at 16:45 (GMT+3);
- – US Fed Chair Powell Testifies at 17:00 (GMT+3).
The GBP/USD currency pair
- Prev Open: 1.2263
- Prev Close: 1.2262
- % chg. over the last day: -0.01%
The UK Consumer Price Index was 9.1% in annual terms (forecast 9.1%, previous 9.0%). Monthly inflation rose by 0.7%. The last time this level of inflation was in 1982. Residential services, primarily electricity, gas and other fuels, and transportation contributed the most to the rise in inflation. To summarize, rising food and energy prices continue to exacerbate the country’s cost-of-living crisis. The main bank rate is now at a 13-year high of 1.25%, and the Bank of England expects inflation to exceed 11% by October. Analysts believe the central bank will be forced to take stricter measures at its upcoming meetings.
- Support levels: 1.2222, 1.2093, 1.1974
- Resistance levels: 1.2422, 1.2470, 1.2523, 1.2629
From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price has corrected to the average values, the MACD indicator has become inactive, and a sideways trend is forming. Under such market conditions, sell deals can be considered from the resistance level of 1.2422, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.2222, but only with confirmation and short targets.
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Alternative scenario: if the price breaks out through the 1.2422 resistance level and fixes above, the uptrend will likely resume.
- – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
- – UK Services PMI (m/m) at 11:30 (GMT+3).
The USD/JPY currency pair
- Prev Open: 136.58
- Prev Close: 136.22
- % chg. over the last day: -0.26%
The Bank of Japan is forced to take increasingly tough action to maintain its yield curve control strategy as other central banks, such as the Fed, continue raising interest rates. Consequently, selling pressure on the yen increases as foreign rates rise. But analysts are confident that it will become increasingly challenging to keep policy soft going forward. Japan imports most of its energy from abroad, so the country’s trade surplus has recently turned into a trade deficit as oil prices skyrocket. And tourists are still unable to visit the island, further depressing demand for the yen. Therefore, the Bank of Japan will be forced to capitulate and raise this ceiling entirely or remove yield controls.
- Support levels: 135.12, 133.35, 131.67, 131.00, 130.12, 129.48, 128.76
- Resistance levels: 135.77, 136.66
The medium-term trend on the USD/JPY currency pair is bullish. The price has corrected to the moving averages. Under such market conditions, buy trades can be considered from the support level of 135.12, but with confirmation. A resistance level of 135.77 is good for sell deals, but only with additional confirmation and short targets.
Alternative scenario: If the price fixes below 133.35, the downtrend will likely resume.
- – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
- – Japan Services PMI (m/m) at 03:30 (GMT+3).
The USD/CAD currency pair
- Prev Open: 1.2921
- Prev Close: 1.2946
- % chg. over the last day: +0.19%
The Consumer Price Index in Canada increased by 1.4% last month (forecast +1%, previous +0.6%). Thus, inflation in Canada reached 7.7% annually, which is a record since 1983. Core inflation (which excludes food and fuel prices) rose from 5.8% to 6.3% year on year. Analysts believe the sharp rise in inflation in Canada will boost investor expectations for a more aggressive interest rate hike by the Bank of Canada, which in turn will add confidence to the Canadian dollar. The Bank of Canada may go for a 75 bps hike as early as the next meeting.
- Support levels: 1.2920, 1.2815, 1.2709, 1.2618, 1.2578, 1.2510
- Resistance levels: 1.2980, 1.3068
In terms of technical analysis, the trend on the USD/CAD currency pair is bullish. The MACD indicator has become inactive, the price has corrected to its average values, and a sideways trend is forming. Under such market conditions, it is better to look for buy deals in the lower time frames from the support level of 1.2920. For sell deals, it is better to consider the resistance level of 1.2980, but it is also better with confirmation and short targets.
Alternative scenario: if the price breaks through and consolidates below the 1.2815 support level, the downtrend will likely resume.
- – US Crude Oil Reserves (w/w) at 18:30 (GMT+3).
By JustForex
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
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