The Analytical Overview of the Main Currency Pairs on 2022.11.21

The EUR/USD currency pair

• Prev Open: 1.0361
• Prev Close: 1.0323
• % chg. over the last day: -0.37 %

The current situation in the Eurozone has not changed much. Geopolitical tensions remain in the region, which creates new energy threats. For their part, ECB officials seem to be divided over their future plans, with some advocating a sustained aggressive rate hike stance, while others are considering quantitative tightening (QT) earlier than expected to avoid such a hawkish interest rate hike.

• Support levels: 1.0193, 1.0092, 1.0043, 0.9812
• Resistance levels: 1.0384, 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 below the moving averages, the MACD indicator has become negative, and there is slight sellers’ pressure. For buy deals, it is best to wait for the completion of the corrective movement to the support levels of 1.0193, but with additional confirmation. Sell deals can be considered from the resistance level of 1.0384 intraday, but it is also better with confirmation since the level has already been tested.

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

• – German Producer Price Index (m/m) at 09:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1861
• Prev Close: 1.1893
• % chg. over the last day: +0.27 %

According to analysts, this week will be quite weak for the British pound as business activity data is forecast to be weak. Friday’s UK retail sales data was slightly positive, although a negative annual figure is not a reason to be very positive. On the other hand, according to the Institute for Fiscal Studies, the UK’s budget report may start the process of repairing Britain’s battered reputation.

• Support levels: 1.1684, 1.1476, 1.1418, 1.1172, 1.1093, 1.0915, 1.0817
• Resistance levels: 1.1921

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. But the price is trading below the levels of the moving averages. The MACD indicator has become negative, indicating a corrective movement. Under such market conditions, it is better to look for buy deals from the support level of 1.1684 or even 1.1476. Sell trades are best sought on intraday time frames from the resistance level of 1.1921, but also better with confirmation since the level has already been tested.

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: 140.19
• Prev Close: 140.34
• % chg. over the last day: +0.11 %

Even though inflation in Japan has reached a 40-year-high, the BoJ has no intention of abandoning its soft stimulus policy. At the moment, the BoJ is ignoring the global trend of central banks raising interest rates to fight inflation. Considering the fact that the Fed keeps raising interest rates, a bullish trend in the USD/JPY currency pair is the most likely scenario.

• Support levels: 139.44, 137.65, 136.80
• Resistance levels: 141.05, 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 forms a trading range (balance) and is trading at the level of moving averages. The MACD indicator has become inactive again, indicating market participants’ uncertainty. Under such market conditions, buy trades can be sought on intraday time frames from the support level of 139.44, but only with confirmation. Sell deals can be searched from the resistance level of 141.05 on the condition of a reverse reaction or a false breakout.

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

The USD/CAD currency pair

• Prev Open: 1.3325
• Prev Close: 1.3384
• % chg. over the last day: +0.44 %

The Canadian dollar continues to show resilience against the US dollar despite hawkish comments from US Federal Reserve policymakers. The increase in USD/CAD quotes is more caused by falling oil prices than by the strengthening of the dollar. The strength of the Canadian dollar may be due to rising expectations of a peak rate after last week’s release of Canadian inflation data. The peak rate is expected to reach about 4.25%. Markets are still factoring in the 50% chance of a 50 bps rate hike at the Bank of Canada meeting on December 7.

• Support levels: 1.3351, 1.3281, 1.3212
• Resistance levels: 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. But inside the day, there is a predominance of buying. The MACD indicator is positive again, and the price is trading above the levels of moving averages. The best way to sell is to consider the resistance level of 1.3508, but with confirmation. Buy trades should be considered on the lower time frames from the support level 1.3351 or 1.3281, 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.