The Analytical Overview of the Main Currency Pairs on 2022.11.22

The EUR/USD currency pair

• Prev Open: 1.0322
• Prev Close: 1.0240
• % chg. over the last day: -0.80 %

ECB representative Centeno indicated yesterday that the ECB is considering a rate hike of less than 75bs. But his colleague Holzmann, head of the Austrian National Bank, believes that if current inflation does not start to decline, he will vote for a 0.75% rate hike. As a result, the main report influencing the ECB’s next move is the next inflation report.

• Support levels: 1.0193, 1.0092, 1.0043, 0.9968
• 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. But the price is trading below the moving averages, the MACD indicator is in the negative zone, and there is a 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.

• – FOMC Member Mester Speaks (m/m) at 18:00 (GMT+3);
• – FOMC Member George Speaks (m/m) at 21:15 (GMT+3);
• – FOMC Member Bullard Speaks (m/m) at 21:45 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1896
• Prev Close: 1.1822
• % chg. over the last day: -0.63 %

The dollar index found additional support yesterday after Mary Daly, president of the Federal Reserve Bank of San Francisco, said Monday that the US central bank may raise its overnight target rate above 5% if inflation does not cool down. A rise in the dollar index provokes a decline in the British currency, though it should be noted that the pound sterling is now trading more confidently than a month ago and is resisting the decline more than the euro.

• 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 at the level of the moving averages. The MACD indicator has become inactive, and a flat structure is forming. Under such market conditions, it is better to look for buy deals from the support level of 1.1684. Sell deals are best sought on intraday time frames from the resistance level of 1.1921, but 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.

• There is no news feed for today.

The USD/JPY currency pair

• Prev Open: 140.31
• Prev Close: 142.11
• % chg. over the last day: +1.28 %

Sayuri Shirai, a candidate for vice governor, believes the Bank of Japan needs to move toward a more flexible interest rate policy. According to Shirai, who has a degree, the Bank of Japan should be more flexible in adjusting interest rates in response to cyclical economic fluctuations. But because the Japanese economy lacks momentum, the Bank of Japan may have to keep interest rates ultra-low even after Governor Haruhiko Kuroda’s term ends in April 2023. The best option for Shirai is to move to a neutral rate that will neither stimulate economic growth nor restrict it.

• Support levels: 140.75, 139.44, 137.65, 136.80
• Resistance levels: 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. But the price is approaching the priority change level. The MACD indicator is positive again, and the buyers’ pressure is increasing. Under such market conditions, traders can look for buy trades on the intraday time frames from the support level of 140.75 or 139.44, but only with confirmation. Sell deals can be searched from the resistance level of 143.17, under the condition of a reverse reaction or a false breakdown.

Alternative scenario: If the price fixes above 145.84, the uptrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3373
• Prev Close: 1.3451
• % chg. over the last day: +0.58 %

The Canadian dollar is a commodity currency, so it depends not only on the monetary policy of the Bank of Canada but also on indicators such as the dollar index and oil prices. Since the central banks of Canada and the United States are keeping their rates at about the same level and have similar monetary policies, the main imbalance in the USD/CAD quotes right now is oil. Crude oil markets rose sharply yesterday near the end of Monday’s trading session after Saudi Arabia, the OPEC leader, said reports suggesting the cartel was planning to increase supply in December were false. Stronger oil is positive for the Canadian currency but negative for inflation indicators.

• 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 of 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.

• – Canada Retail Sales (m/m) at 15:30 (GMT+3).