by JustForex
The EUR/USD currency pair
- Prev Open: 1.0434
- Prev Close: 1.0542
- % chg. over the last day: +1.03%
The Consumer Price Index data (inflation rate) will be released today in Europe. Analysts expect the inflation rate to remain unchanged, which will mean a slowdown in inflation in the region. If the data is worse than expected it will be a positive factor for the European currency strengthening on expectations of faster monetary policy tightening.
- Support levels: 1.0491, 1.0445, 1.0379, 1.0342
- Resistance levels: 1.0587, 1.0646, 1.0723, 1.0766, 1.0799, 1.0869, 1.0955
From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is close to changing to bullish. The price has consolidated above the moving averages but has not broken through the priority change level. The MACD indicator has become positive, but buyer’s pressure remains high. Under such market conditions, it is possible to look for sell trades from the resistance level of 1.0587, but only after the additional confirmation. Buy trades can be considered on intraday timeframes from the support level of 1.0491 or 1.0445, but only with short targets and confirmation.
Alternative scenario: if the price breaks out through the 1.0588 resistance level and fixes above, the uptrend will likely resume.
- – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
- – Eurozone ECB Financial Stability Review at 12:00 (GMT+3);
- – US Building Permits (m/m) at 15:30 (GMT+3).
The GBP/USD currency pair
- Prev Open: 1.2313
- Prev Close: 1.2492
- % chg. over the last day: +1.45%
The UK inflation rate reached 9.0% on an annualised basis. This is the highest recorded 12-month value since 1997. Monthly inflation increased by 2%. The Producer Price Index, which measures the rate of inflation between factories and plants, rose from 11.9% to 14% y/y. UK consumer prices are approaching a projected peak of 10.25%. The Bank of England needs to take action to suppress inflation. Analysts forecast more aggressive interest rate hikes at the next meetings.
- Support levels: 1.2399, 1.2343, 1.2283, 1.2199
- Resistance levels: 1.2519, 1.2602, 1.2695, 1.2792, 1.2981
On the hourly time frame, the GBP/USD currency pair trend changed to bullish. The MACD indicator became positive, and the buyers’ pressure remains high. Under such market conditions buy deals may be considered from the support level of 1.2343 or 1.2283, but only with additional confirmation. Sell deals should be looked for from the resistance level of 1.2519, but with confirmation in the form of sellers’ initiative.
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Alternative scenario: if the price breaks down through the 1.2200 support level and fixes below, the mid-term downtrend will likely be resumed.
- – UK Consumer Price Index (m/m) at 09:00 (GMT+3);
- – UK Producer Price Index (m/m) at 09:00 (GMT+3).
The USD/JPY currency pair
- Prev Open: 129.14
- Prev Close: 129.34
- % chg. over the last day: +0.15%
Japan’s GDP fell by 0.2% for the quarter, but the data was better than analysts’ expectations of -1.0%. Japanese Economy Minister Yamagiwa believes the slowdown is due to rising commodity prices and supply-side constraints caused by the war in Ukraine and prolonged lockdowns in China. The industrial production rate showed a 0.3% increase last month. This is a significant decrease compared to the 2% growth a month earlier.
- Support levels: 129.02, 127.29, 126.91, 126.00, 125.57
- Resistance levels: 129.74, 130.12, 130.99
The medium-term trend on the USD/JPY currency has changed to bearish. The price has confidently broken through the priority change level and has consolidated below the moving averages. Despite the change in the trend on the hour timeframe, it is better to look for buy deals with the expectation of an uptrend continuation, since the Japanese Yen has no fundamental support. First of all, it is worth considering the support level of 129.02, but with confirmation. A resistance level of 130.12 may be considered for sell deals, but only with additional confirmation.
Alternative scenario: If the price fixes above 130.99, the uptrend will likely be resumed.
- – Japan GDP (q/q) at 02:50 (GMT+3);
- – Japan Industrial Production (m/m) at 07:30 (GMT+3).
The USD/CAD currency pair
- Prev Open: 1.2841
- Prev Close: 1.2809
- % chg. over the last day: -0.25%
Canada’s inflation data will be updated today. Analysts are forecasting a monthly inflation increase of 0.5%. If the forecasts are true, Canada’s annualised inflation rate will reach 7.2%, which will be a new multi-year record. Growth in consumer prices is usually accompanied by a strengthening of the national currency in anticipation of more aggressive monetary policy tightening by the central bank.
- Support levels: 1.2808, 1.2774, 1.2692, 1.2644, 1.2607, 1.2521
- Resistance levels: 1.2875, 1.2904, 1.2953, 1.3000, 1.3052
The USD/CAD currency pair trend is bearish in terms of technical analysis. The MACD indicator is in the negative zone, but the bears’ pressure is decreasing, as there are signs of divergence. It is worth trading only with short targets because fundamentally both the dollar index and the Canadian dollar are inclined to grow. Under such market conditions it is better to look for buy trades on the lower timeframes from the support level of 1.2808 or 1.2774, but only with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2875 or 1.2904, but also better with confirmation and short targets.
Alternative scenario: if the price breaks through and consolidates above 1.3000, the uptrend will likely be resumed.
- – Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
- – US Crude Oil Reserves (w/w) at 17:30 (GMT+3).
by JustForex
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
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