The Analytical Overview of the Main Currency Pairs on 2022.11.23

The EUR/USD currency pair

• Prev Open: 1.0041
• Prev Close: 1.0301
• % chg. over the last day: +0.58 %

ECB officials are still trying to decide which interest rate hike should be chosen at the December meeting. The main discussions are between the steps of 50 and 75 bps. Analysts think that considering the first signs of an inflation slowdown in the Eurozone, ECB will not raise the rate aggressively and, therefore, will stop at the step of 0.5%.

• Support levels: 1.0193, 1.0092, 1.0043, 0.9968
• Resistance levels: 1.0341, 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 is positive again. 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 1.0341 inside the day, but it is also better with confirmation.

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

• – Eurozone France Manufacturing PMI (m/m) at 10:15 (GMT+3);
• – Eurozone France Services PMI (m/m) at 10:15 (GMT+3);
• – Eurozone German Manufacturing PMI (m/m) at 10:30 (GMT+3);
• – Eurozone German Services PMI (m/m) at 10:30 (GMT+3);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
• – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
• – US Durable Goods Orders (m/m) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Manufacturing PMI (m/m) at 16:45 (GMT+3);
• – US Services PMI (m/m) at 16:45 (GMT+3);
• – US New Home Sales (m/m) at 17:00 (GMT+3);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3);
• – US Natural Gas Storage (w/w) at 19:00 (GMT+3);
• – US FOMC Meeting Minutes at 21:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1821
• Prev Close: 1.1884
• % chg. over the last day: +0.53 %

According to a new report from the influential Paris-based OECD group, economic growth in the UK lags behind the world’s largest economies after the Covid-19 pandemic and is well below average. The G-7 countries, which include Canada, France, Germany, Italy, Japan, the US, and the UK, have collectively grown GDP by 2.5%, with only the UK registering a decline. That is the reason why the UK government first needs to regain investor confidence.

• 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. The price is trading at the level of the moving averages. The MACD indicator is inactive, and a flat structure is formed in the form of a narrowing triangle pattern. Under such market conditions, it is better to look for buy deals from the support level of 1.1684, but with confirmation. It is best to look for sell trades on intraday time frames from the resistance level of 1.1921, but it is also better with confirmation because the level has already been tested.

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

• – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
• – UK Services PMI (m/m) at 11:30 (GMT+3).

The USD/JPY currency pair

• Prev Open: 142.07
• Prev Close: 141.21
• % chg. over the last day: -0.61 %

Japan’s weighted average inflation rate, tracked as an indicator of whether price growth is expanding, reached a record 1.1% in October, indicating that inflationary pressures due to rising commodity and labor costs are intensifying. Unlike the Consumer Price Index (CPI), which is affected by fuel and energy costs, the weighted median inflation rate is useful for tracking how broadly prices are rising. According to analysts, the Bank of Japan (BOJ) may change its ultra-low interest rates if wages rise in tandem with inflation next year.

• 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 has become inactive again, and the flat structure is being formed again. Under such market conditions, traders can look to buy trades on the intraday time frames from the support level of 140.75 or 139.44, but only with confirmation. Sell positions can be looked for from the resistance level of 143.17, provided that there is a reversal 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: 1.3449
• Prev Close: 1.3372
• % chg. over the last day: -0.58 %

Statistics Canada said retail sales in September fell by 0.5%, in line with market estimates. This is below the 0.4% gain in August. On an annualized basis, retail sales rose to 6.9%. However, retail sales fell by 1% in the third quarter, which is the first quarterly decline since 2020. Against the backdrop of weakening retail sales, USD/CAD quotes declined due to heightened recession fears.

• 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. The price has corrected to the support levels. The MACD indicator became negative, and within the day, there was slight sellers’ pressure. 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.

• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3).