The Analytical Overview of the Main Currency Pairs on 2022.11.15

The EUR/USD currency pair

• Prev Open: 1.0334
• Prev Close: 1.0325
• % chg. over the last day: -0.09 %

The euro is expected to gain upward momentum this week when the European Central Bank announces early repayment of so-called TLTRO loans by Eurozone banks, leading to tighter financial conditions in regional markets by depleting excess liquidity. ECB Vice President Luis de Guindos, who oversees financial stability analysis at the ECB, echoed officials’ current mantra yesterday about inflation risks and the need to keep raising interest rates. His remarks focused on how market and liquidity threats have changed, noting that the price correction following the Russian invasion of Ukraine has already begun. Meanwhile, banks may face higher credit risk due to vulnerabilities in real estate markets.

• Support levels: 1.0194, 1.0092, 1.0043, 0.9993, 0.9838, 0.9794, 0.9755
• Resistance levels: 1.0363, 1.0411, 1.0504

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is trading above the moving averages, and the MACD indicator is in the positive zone, but the buying pressure is weakening. For buy deals, it is best to wait for a corrective movement to the support levels of 1.0194 or 1.0092, but with additional confirmation. Sell deals can be considered from the resistance level of 1.0363, but also better confirmation in the form of a false breakdown.

Alternative scenario: if the price breaks down through the support level of 0.9993 and fixes below it, the downtrend will likely resume.

• – Eurozone French Consumer Price Index (m/m) at 09:45 (GMT+2);
• – Eurozone Spanish Consumer Price Index (m/m) at 10:00 (GMT+2);
• – Eurozone German ZEW Economic Sentiment (m/m) at 12:00 (GMT+2);
• – Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+2);
• – Eurozone GDP (q/q) at 12:00 (GMT+2);
• – US Empire State Manufacturing Index (m/m) at 15:30 (GMT+2);
• – US Producer Price Index (m/m) at 15:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.1800
• Prev Close: 11.1756
• % chg. over the last day: -0.37 %

UK Chancellor Jeremy Hunt warned yesterday that tax hikes would affect everyone and that government spending cuts are inevitable. The UK economic indicators continue to decline. The UK labor market remains strong, but the coming months may start to see shifts as the economy continues to slow while overall inflation is expected to rise again. This will undoubtedly have a negative impact on the British pound sterling in the medium term. Analysts forecast that the Bank of England will continue to raise rates and reduce its balance sheet in the coming meetings.

• Support levels: 1.1684, 1.1476, 1.1418, 1.1231, 1.1172, 1.1093, 1.0915, 1.0817
• Resistance levels: 1.1848, 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 has become inactive, and the divergence indicates weakness and a possible correction. Under such market conditions, it is better to look for buy deals after a slight correction to the support levels of 1.1684 or 1.1476. Sell deals are best to look for from the resistance level of 1.1848, but better with a confirmation in the form of a false breakdown.

Alternative scenario: if the price breaks down of the 1.1418 support level and fixes below it, the downtrend will likely resume.

• – UK Average Earnings Index (m/m) at 09:00 (GMT+2);
• – Eurozone Spanish Consumer Price Index (m/m) at 10:00 (GMT+2);
• – UK Unemployment Rate (m/m) at 09:00 (GMT+2).

The USD/JPY currency pair

• Prev Open: 139.11
• Prev Close: 139.91
• % chg. over the last day: +0.58 %

Japan’s GDP unexpectedly contracted in the third quarter due to soaring inflation and slowing global economic growth. This marked the first quarterly contraction in over a year. Official data showed that the gross domestic product fell by 1.2% year-over-year. The government is stepping up support for households to try to cushion the effects of cost inflation, with an additional 29 trillion yen ($196 billion) in spending in the budget. Meanwhile, Bank of Japan (BoJ) Governor Kuroda said that the expected inflation rise and a slowdown in GDP growth in the third quarter underscore the need for further economic support. This is a negative signal for the yen.

• Support levels: 139.58, 138.78, 137.65, 136.80
• Resistance levels: 140.55, 143.17, 145.16, 146.06, 147.34, 148.82, 150.00

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 averages. The MACD indicator has become inactive, indicating the uncertainty of market participants. Under such market conditions, buy trades can be searched for on intraday time frames from the support level of 139.58, but only with confirmation in the form of a bullish initiative. Sell deals can be sought from the resistance level of 141.05, but only with additional confirmation.

Alternative scenario: If the price fixes above 146.06, the uptrend will likely resume.

• – Japan GDP (q/q) at 01:50 (GMT+2);
• – Japan Industrial Production (m/m) at 06:30 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.3274
• Prev Close: 1.3316
• % chg. over the last day: +0.32 %

Canada will release fresh inflation data this week. Analysts forecast that the annual inflation rate in Canada will remain the same, which will confirm the fact that the peak of inflation in the country has passed, and the Bank of Canada can be less aggressive with raising rates. The situation here is similar to the US Federal Reserve’s policy, so with the rates being equal, the imbalance in the USD/CAD quotes will be caused by oil prices.

• Support levels: 1.3212
• Resistance levels: 1.3369, 1.3508, 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. The MACD indicator has become inactive, and the price is trading between the moving averages. The best way to sell is to consider the resistance level of 1.3369, but there is a lot of space before this level, so buy trades are very appropriate and should be considered on the lower time frames from the support level of 1.3212, but with additional confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks out and consolidates above the resistance level of 1.3607, the uptrend will likely resume.