The Analytical Overview of the Main Currency Pairs on 2022.11.10

The EUR/USD currency pair

• Prev Open: 1.0074
• Prev Close: 1.0011
• % chg. over the last day: -0.63 %

New inflation data will be released in the US today. Analysts forecast annual inflation to fall from 8.2% to 7.9%, while core inflation will fall from 6.6% to 6.5%. If the data is within that range, the dollar index could see a sharp decline, as inflation has already peaked, and the US Federal Reserve will slow the pace of interest rate hikes. But if the data is worse than expected and the inflation numbers (especially core inflation) show further growth, the dollar index, on the contrary, may receive support, which will cause the euro to fall.

• Support levels: 1.0012, 0.9946, 0.9838, 0.9794, 0.9755, 0.9702, 0.9601
• Resistance levels: 1.0111, 1.0162, 1.0230

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is still bullish. The price is trading above the moving averages. The MACD indicator is inactive, but there is a divergence, indicating the weakness of the buyers. Under such market conditions, buy trades should be considered from the support level of 0.9946 or 0.9838, but with additional confirmation. Sell deals can be considered from the resistance level of 1.0111, but also with confirmation.

Alternative scenario: if the price breaks down through the support level of 0.9838 and fixes below it, the downtrend will likely resume.

• – FOMC Member Waller Speaks at 09:00 (GMT+2);
• – US Consumer Price Index (m/m) at 15:30 (GMT+2);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
• – US FOMC Member Mester Speaks at 19:30 (GMT+2);
• – US FOMC Member George Speaks at 20:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.1538
• Prev Close: 1.1356
• % chg. over the last day: -1.60 %

Tomorrow, the UK will publish its Q3 GDP data. The UK economy is projected to contract by 0.5% in Q3. Higher energy prices and uncertainty in the economy are the main reasons for poor investment performance and a drop in industrial production. But analysts believe that new Prime Minister Rishi Sunak can restore investor confidence and improve some economic indicators by the end of the fourth quarter and avoid a deep recession. Lower-than-expected GDP figures could cause the pound to weaken further, making it harder for the Bank of England to operate. Conversely, stronger GDP numbers, and especially production, could mean that there is room for the economy to continue to hold higher rates by the Bank of England.

• Support levels: 1.1348, 1.1230, 1.1172, 1.1093, 1.0915, 1.0817
• Resistance levels: 1.1512, 1.1643, 1.1698, 1.1816, 1.1901

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price is trading above the moving averages. The MACD indicator is positive, but a divergence has appeared, which indicates that further growth is limited. Under such market conditions, buy trades are better to look for on intraday time frames with short targets. Long trades can be considered from the support level of 1.1491 or 1.1348. Sell trades are best sought from the resistance level of 1.1643 but better with confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks down of the 1.1231 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 145.66
• Prev Close: 146.39
• % chg. over the last day: +0.50 %

Goldman Sach (GS) analysts have revised their forecasts upward for the dollar’s exchange rate against the Japanese yen, predicting a more sustained US price cycle than initially anticipated. The GS bank now expects the US dollar to be worth 155 yen in three months (previously 150), 155 in six months (135), and 140 in 12 months (125). The yen is particularly sensitive to changes in US interest rates, as the Japanese authorities firmly adhere to their ultra-soft monetary policy.

• Support levels: 145.82, 144.91, 144.19, 143.00
• Resistance levels: 147.34, 146.24, 147.34, 148.82, 150.00, 151.05

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The price is trading at the level of the moving levels. The MACD indicator has become positive, and the buyers’ pressure is increasing. Under such market conditions, buy trades can be sought on the intraday time frames from the support level of 145.82, but with confirmation in the form of reverse initiative. Sell deals can be searched from the 147.34 resistance level, but only with additional confirmation.

Alternative scenario: If the price fixes above 150.00, the uptrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3425
• Prev Close: 1.3525
• % chg. over the last day: +0.75 %

The Canadian dollar is a commodity currency, so it is highly dependent not only on the monetary policy of the Bank of Canada but also on the dollar index and oil prices. Oil prices continued to fall yesterday as US crude inventories rose more than expected, and an increase in COVID-19 cases in China, the biggest importer, negatively impacted demand. Bank of Canada Governor Tiff Macklem will speak today about the Canadian labor market.

• Support levels: 1.3479, 1.3400
• Resistance levels: 1.3544, 1.3608, 1.3682, 1.3776, 1.3855, 1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bearish. But the MACD indicator has become positive, and the price is already trading above the moving averages, indicating weakness of the sellers. The best way to sell is to consider the resistance level of 1.3607, but only after the additional confirmation. Buy trades should be considered on the lower time frames from the support level of 1.3479, but with additional confirmation.

Alternative scenario: if the price breaks out and consolidates above the resistance level of 1.3682, the uptrend will likely resume.

• – Canada BoC Gov Macklem Speaks at 18:50 (GMT+2).