The Analytical Overview of the Main Currency Pairs on 2022.11.17

The EUR/USD currency pair

• Prev Open: 1.0348
• Prev Close: 1.0393
• % chg. over the last day: +0.43 %

Inflation data will be released in Europe today. Experts believe that Europe’s Core Consumer prices (not including food and fuel) will hit another record. If inflation does rise, it will increase the likelihood that the ECB will consider another 75 basis point hike at its next meeting. Conversely, if inflation data shows a slowdown or stays the same, it could lead to a sell-off in the euro as the ECB becomes less aggressive while the US Federal Reserve keeps its foot on the gas.

• Support levels: 1.0194, 1.0092, 1.0043, 0.9993, 0.9838, 0.9794, 0.9755
• Resistance levels: 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 at the level of the moving averages, and the MACD indicator has become inactive. There is an accumulation in the form of liquidity narrowing. This means there will be an impulse move on today’s news. 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 1.0411 or 1.0504, but also better confirmation in the form of a false breakout.

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

• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+2);
• – US FOMC Member Bullard Speaks at 15:00 (GMT+2);
• – US Building Permits (m/m) at 15:30 (GMT+2);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
• – US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+2);
• – US FOMC Member Bowman Speaks at 16:15 (GMT+2);
• – US FOMC Member Mester Speaks at 16:40 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.1856
• Prev Close: 1.1914
• % chg. over the last day: +0.49 %

The UK Consumer Price Index (CPI) reached a 41-year high in October. Inflation in the country rose to an annualized rate of 11.1%. Energy bills, along with a sharp rise in food prices, led the index to a stronger-than-forecast increase. Markets have now focused on today’s financial report from Chancellor of the Exchequer Jeremy Hunt. Experts believe the budget will include spending cuts and tax hikes. On the other hand, this is positive for the British pound, as Britain’s recession will force the Bank of England to raise interest rates even more. Statistically, if rates are rising, the national currency is getting stronger.

• Support levels: 1.1684, 1.1476, 1.1418, 1.1231, 1.1172, 1.1093, 1.0915, 1.0817
• Resistance levels: 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 at the level of 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 from the resistance level of 1.1901, but it is better with confirmation in the form of a bearish initiative. Currently, there is none.

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

The USD/JPY currency pair

• Prev Open: 139.28
• Prev Close: 139.52
• % chg. over the last day: +0.17 %

Bank of Japan Governor Kuroda said yesterday that the central bank would firmly support the economy by continuing easing. Achieving stable inflation will come from wage growth rather than monetary policy normalization. Thus, the situation on the currency pair USD/JPY in the medium term points to the growth of quotes.

• Support levels: 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. The price is trading in a narrow corridor, which makes it difficult to find good entry points. Under such market conditions, buy trades can be searched for on intraday time frames from the support level of 137.65, but only with confirmation because this level has already been tested. Sell deals can be searched 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.

The USD/CAD currency pair

• Prev Open: 1.3276
• Prev Close: 1.3327
• % chg. over the last day: +0.38 %

According to Statistics Canada, the Consumer Price Index rose to an annualized 6.9% in October. Excluding food and energy, prices decreased to 5.8%, down from 6% in September. In terms of key indicators, the consumer price index report does little to resolve the internal and external debate over the Bank of Canada’s December meeting. Governor Tiff Macklem has left the door open for another excessive increase, and the inflation data supports a downgrade to the standard 25 basis point increase.

• Support levels: 1.3270, 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 became positive, and the price is trading above the moving averages. The best way to sell is to consider the resistance level of 1.3370, but with confirmation. Buy trades should be considered on the lower time frames from the support level of 1.3270, 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 1.3508, the uptrend will likely resume.