InvestMacro

The EUR/USD currency pair

• Prev Open: 1.0638
• Prev Close: 1.0611
• % chg. over the last day: -0.25 %

Inflation in the Eurozone lags Lithuanian inflation by half a year, which means that its peak is still to come. This is the opinion of the representative of the European Central Bank (ECB) Governing Council, Gediminas Simkus. The main risk comes from the energy crisis amid falling temperatures in winter. If Europe manages to pass this winter without considerable problems in the energy system, it is possible to say with certainty that the inflation peak has already passed this spring.

• Support levels: 1.0586, 1.0483, 1.0361, 1.0332, 1.0284, 1.0193
• Resistance levels: 1.0654, 1.0667, 1.0695

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is forming a price corridor. The price is forming a wide price corridor, and the volatility is reducing in anticipation of the holidays. The MACD indicator has become inactive, but there is a slight selling pressure. Under such market conditions, buy trades are best considered from support levels on intraday time frames, but with additional confirmation. Sell deals can be considered from the resistance level of 1.0654 or 1.0667, but better with a confirmation in the form of a reverse initiative or a false breakout because the level has already been tested.

Alternative scenario: if the price breaks down through the support level of 1.0549 and fixes below it, the downtrend will likely resume.

• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.2024
• Prev Close: 1.2018
• % chg. over the last day: -0.05 %

The situation on the GBP/USD currency pair has not changed compared to the previous day. Volatility remains below average in the run-up to the New Year holidays. Fundamental factors for the British pound are extremely weak now, so there are no prerequisites for growth. Traders should not expect significant changes in the price till the end of the year.

• Support levels: 1.1999, 1.1979, 1.1684, 1.1476, 1.1418
• Resistance levels: 1.2062, 1.2218, 1.2308, 1.2431, 1.2519

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The MACD indicator became inactive, and the price formed a narrow price corridor. Under such market conditions, it is better to look for buy deals from the support level of 1.1999 or 1.1979, but with confirmation on intraday time frames. Sell trades are best sought from the resistance level of 1.2062 but also better with confirmation.

Alternative scenario: if the price breaks out through the 1.2308 resistance level and fixes above it, the uptrend will likely resume.

The USD/JPY currency pair

• Prev Open: 133.35
• Prev Close: 134.47
• % chg. over the last day: +0.83 %

Japan’s industrial production index declined for the third consecutive month. Recent economic data, including exports, retail sales, and industrial production, signal that Japan’s economy is still very fragile and thus supports the Bank of Japan’s view that monetary policy easing should continue. At the moment, JPY does not have any fundamental support, so weak economic data and interest rate differentials between BoJ and FOMC will have a negative impact on JPY.

• Support levels: 133.75, 132.68, 132.27, 131.22
• Resistance levels: 134.45, 135.88, 137.03, 138.00, 139.09

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The price is now trading above the moving averages, while the MACD indicator has become inactive. There is some buying pressure inside the day. Buy trades are best considered on intraday time frames from a support level of 133.75 or 132.68, but only with confirmation. Sell deals can be looked for from the resistance level of 134.45, provided there is a reverse reaction.

Alternative scenario: If the price fixes above 137.00, the uptrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3514
• Prev Close: 1.3604
• % chg. over the last day: +0.67 %

No economic events and data about Canada are expected before the end of the year, so the Canadian dollar these days will be completely dependent on the dynamics of the dollar index and oil prices, as Canadian is a commodity currency. Oil prices fell on Wednesday, as well as the likelihood that the easing of pandemic restrictions in China will increase demand for fuel. With the dollar rising, USD/CAD quotes jumped yesterday. The US crude oil inventories will be released today, which will add volatility to the currency pair.

• Support levels: 1.3529, 1.3438, 1.3386, 1.3360, 1.3281, 1.3212
• Resistance levels: 1.3614, 1.3656, 1.3700, 1.3776, 1.3855

From the point of view of technical analysis, the uptrend trend on the USD/CAD currency pair is still bullish. The price failed to consolidate below the priority level and is trading above the moving averages. The MACD indicator is in the positive zone, and buyers prevail inside the day. Buy trades should be considered from the support level 1.3529, but with confirmation. Sell deals are best to look for on intraday time frames from the resistance level of 1.3614, but with confirmation in the form of reverse initiative on the lower time frames.

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3529, the downtrend will likely resume.

• – US Crude Oil Inventories (w/w) at 18:00 (GMT+2).

The EUR/USD currency pair

• Prev Open: 1.0592
• Prev Close: 1.0615
• % chg. over the last day: +0.22 %

This is the last trading week of the year. With many investors closing their books for the year and many traders and managers going on vacation, liquidity will be less than usual. This means the markets may move sharply without any news. The dollar fell against most currencies in trading Friday as recent data signaled that the US Personal Consumption Index (PCE) is slowing, reinforcing expectations for a smaller interest rate hike by the Federal Reserve and improving investors’ appetite for risk. The Fed is expected to raise interest rates by only 25 basis points at its next meeting.

• Support levels: 1.0549, 1.0483, 1.0361, 1.0332, 1.0284, 1.0193
• Resistance levels: 1.0667, 1.0695

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is forming a price corridor. The price is forming a wide price corridor. The MACD indicator has become positive, and buyers are again dominating inside the day. Under such market conditions, buy trades are best considered from support levels on intraday time frames, but with additional confirmation. Sell deals can be considered from the resistance level of 1.0667, but better with a confirmation in the form of a reverse initiative or a false breakout.

Alternative scenario: if the price breaks down through the support level of 1.0549 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

• Prev Open: 1.2025
• Prev Close: 1.2046
• % chg. over the last day: +0.17 %

A turbulent year for the British pound is coming to an end, and there are a few signs that 2023 will be optimistic. Signs of a painful economic downturn in the UK continue to accumulate, making analysts doubt whether the pound can extend or even sustain its recent rebound against the dollar. The options market is also showing skepticism, with traders still bearish on the long-term outlook. Yield spreads between two- and 10-year swaps tied to the overnight rate, an indicator of recession risks, also point to a longer recession in the UK than in other major economies. Analysts at JPMorgan Chase & Co. predict that the pound will return to $1.14 by the end of the first quarter of 2023.

• Support levels: 1.2044, 1.1979, 1.1684, 1.1476, 1.1418
• Resistance levels: 1.2093, 1.2218, 1.2308, 1.2431, 1.2519

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame has changed to bearish. The MACD indicator has become positive, but the buyers’ pressure is quite weak. On the other hand, the price managed to return above the moving averages. Under such market conditions, it is better to look for buy trades from the support at 1.2044, but with confirmation on the intraday time frames. Sell trades are best sought from the resistance level of 1.2093, but also better with confirmation.

Alternative scenario: if the price breaks out through the 1.2308 resistance level and fixes above it, the uptrend will likely resume.

The USD/JPY currency pair

• Prev Open: 132.67
• Prev Close: 132.77
• % chg. over the last day: +0.07 %

The market is still dominated by news of the Bank of Japan’s upward revision to its yield curve control policy, which has given a significant boost to the yen and brought short yen futures positions to their lowest level since August. But Bank of Japan (BOJ) Governor Haruhiko Kuroda said on Monday that the BOJ’s decision last week to widen the permissible range around its yield target was intended to reinforce the effect of its ultra-soft policy, not a first step toward canceling a massive stimulus program, and the bank would aim for sustained and stable price targets accompanied by wage increases while continuing to ease monetary policy under yield curve control. Such a statement may return the USD/JPY currency pair bullish as the interest rate differential is not in favor of the yen.

• Support levels: 132.27, 131.22
• Resistance levels: 133.53, 134.73, 135.88, 137.03, 138.00, 139.09

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The MACD indicator has become inactive, and a narrow price range in the form of a “wedge” pattern is being formed. During the day, there is a slight buyers’ pressure. Buy trades are best considered on intraday time frames from the support level of 132.27, but only with confirmation. Sell deals can be looked for from the resistance level of 133.53, provided there is a reverse reaction.

Alternative scenario: If the price fixes above 137.00, the uptrend will likely resume.

• – Japan Unemployment Rate (m/m) at 01:30 (GMT+2);
• – Japan Retail Sales (m/m) at 01:30 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.3651
• Prev Close: 1.3594
• % chg. over the last day: -0.42 %

Canada’s GDP grew by 0.1% over the last month. On the one hand, the economy is still on a growth trajectory. On the other hand, there are signs of a slowdown in GDP growth over the last 3 months. It is highly likely that Canada’s Central Bank will continue to raise the cost of borrowing (interest rate) but will become more “dovish” so as not to hurt the economy too much. Analysts expect a 0.25% rate hike at the next meeting, after which the bank is likely to pause for a few months. The strengthening of the Canadian dollar in recent days is due to rising oil prices.

• Support levels: : 1.3521, 1.3438, 1.3386, 1.3360, 1.3281, 1.3212
• Resistance levels: : 1.3590, 1.3656, 1.3700, 1.3776, 1.3855

From the point of view of technical analysis, the trend on the USD/CAD currency pair has changed to bullish. But the MACD indicator is in the negative zone, and sellers dominate within the day. Yesterday, the price consolidated below the moving averages, which increases the probability of a change in the trend. Buy trades should be considered from the support at 1.3522, but with a confirmation in the form of a reverse initiative. Sells are best to look for on intraday time frames from the resistance level of 1.3590, but with confirmation in the form of a reverse initiative on the lower time frames.

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3386, the downtrend will likely resume.

The EUR/USD currency pair

• Prev Open: 1.0604
• Prev Close: 1.0597
• % chg. over the last day: -0.07 %

Yesterday, US GDP data showed that the US economy increased by 3.2%, higher than the expected 2.9%. This brought back some investor fears about an interest rate hike. The important indicator today will come from the major PCE prices, where a rise in the numbers could put some hawkish pressure back on the markets, causing the dollar index to rise again (EUR/USD to fall). Low liquidity over the holiday period could lead to stronger moves if economic data is significantly different from estimates.

• Support levels: : 1.0549, 1.0483, 1.0361, 1.0332, 1.0284, 1.0193
• Resistance levels: 1.0632, 1.0647, 1.0695

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is forming a price corridor. The MACD indicator has become negative, and sellers’ pressure prevails throughout the day. Under such market conditions, buy trades are best considered from the support level of 1.0549 but with additional confirmation. Sell deals can be considered from the resistance level of 1.0632, but it is better with a confirmation in the form of a reverse initiative or false breakout because the level has already been tested.

Alternative scenario: if the price breaks down through the support level of 1.0446 and fixes below it, the downtrend will likely resume.

• – US Core Durable Goods Orders (m/m) at 15:30 (GMT+2);
• – US PCE Price index (m/m) at 15:30 (GMT+2);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+2);
• – US New Home Sales (m/m) at 17:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.2074
• Prev Close: 1.2039
• % chg. over the last day: -0.29 %

In UK GDP revised downward, the actual value is 0.3%. Most services sub sectors showed a slowdown, but output rose by 0.1% in Q3 2022. With the dollar index rising, GBP/USD quotes have declined, and this trend could continue if PCE data today does not point to a slowdown, which could trigger a drop in the dollar index and a rise in GBP/USD quotes.

• Support levels: 1.1979, 1.1684, 1.1476, 1.1418
• Resistance levels: 1.2091, 1.2218, 1.2308, 1.2431, 1.2519

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. Yesterday, the price tested the priority change level but failed to consolidate higher. A false breakdown area was formed. The MACD indicator has become inactive, and the volatility on the threshold of the holidays is low. Under such market conditions, it is better to look for buy trades from the support level at 1.2092 but with a confirmation at the intraday time frames. Sell trades are best sought from the resistance level of 1.2218 but also better with confirmation.

Alternative scenario: if the price breaks down from the 1.2092 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 132.40
• Prev Close: 132.36
• % chg. over the last day: -0.03 %

The Bank of Japan surprised investors this week with a change in its Yield Curve Control Policy (YCC). This caused a moderate sell-off in Japanese bonds: the yield on Japan’s 10-year government bonds (JGBs) rose 15 basis points. And this is still having an effect on financial markets and the Japanese yen in particular. New inflation data showed that consumer prices (excluding food energy prices) rose from 3.6% to 3.7% on an annualized basis, the highest level since 1981.

• Support levels: 132.16, 131.22
• Resistance levels: 133.53, 134.73, 135.88, 137.03, 138.00, 139.09

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The MACD indicator has become inactive, and a narrow price range in the form of a “wedge” pattern is being formed. During the day, there is a slight buyers’ pressure. Buy trades are best considered on intraday time frames from the support level of 132.16, but only with confirmation. Sell deals can be looked for from the resistance level of 133.53, provided there is a reverse reaction.

Alternative scenario: If the price fixes above 137.00, the uptrend will likely resume.

• – Japan National Core CPI (m/m) at 01:30 (GMT+2);
• – Japan Monetary Policy Meeting Minutes at 01:50 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.3606
• Prev Close: 1.3645
• % chg. over the last day: +0.28 %

The Canadian dollar is a commodity currency and is highly dependent not only on the monetary policy of the Bank of Canada but also on oil prices. The oil prices decreased yesterday while the dollar index went up, which eventually led to the growth of the USD/CAD. China reiterated its focus on boosting economic growth in 2023, which helped revise the impact of demand for crude oil upwards. Increased demand for oil with limited supply is helping oil prices and the Canadian dollar to strengthen.

• Support levels: 1.3590, 1.3521, 1.3438, 1.3386, 1.3360, 1.3281, 1.3212
• Resistance levels: 1.3656, 1.3700, 1.3776, 1.3855

From the point of view of technical analysis, the trend on the USD/CAD currency pair has changed to bullish. The MACD indicator is in the positive zone, but inside the day, there is a weakness of the buyers. Yesterday, the price made a false breakout of the level 1.3656 resistance level, which will now serve as a sell zone. Buy trades should be considered from the support of 1.3590 but with a confirmation in the form of a reversal. Sell deals are best to look for on intraday time frames from the resistance level of 1.3656, but with confirmation in the form of a reverse initiative on the lower time frames.

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3386, the downtrend will likely resume.

• – Canada GDP (m/m) at 15:30 (GMT+2).

The EUR/USD currency pair

• Prev Open: 1.0624
• Prev Close: 1.0603
• % chg. over the last day: -0.19 %

The Conference Board Consumer Confidence Index in the US jumped to 108.3 from 101.4, beating economists’ forecast of 101.0. The rise in consumer sentiment has eased fears of a US recession. Investors are now waiting for US GDP data for the latest quarter and data on the PCE Index, which is among the US Federal Reserve’s monitored inflation indicators. Growing inflationary pressures may bring panic moods back to the market, which will cause EUR/USD quotes to fall against the background of the dollar’s strengthening.

• Support levels: 1.0549, 1.0483, 1.0361, 1.0332, 1.0284, 1.0193
• Resistance levels: 1.0647, 1.0695

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is forming a price corridor. The MACD indicator became positive. Inside the day, purchases prevail. Under such market conditions, buy trades are best considered from the moving averages but with additional confirmation. Sell deals can be considered from the resistance level of 1.0647, but it is better with confirmation in the form of a reverse initiative or false breakout because the level has already been tested.

Alternative scenario: if the price breaks down through the support level of 1.0446 and fixes below it, the downtrend will likely resume.

• – US GDP (q/q) at 15:30 (GMT+2);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.2171
• Prev Close: 1.2082
• % chg. over the last day: -0.74 %

Today, the UK will release GDP data for the last quarter of 2022. Analysts are predicting that the economy will contract by 0.2%, which will be the second quarter of decline, which will mean a technical recession. The UK’s economic outlook remains murky: record inflation, the energy crisis, and strikes suggest that economic indicators will decline throughout the winter.

• Support levels: 1.2091, 1.2177, 1.2024, 1.1964, 1.1684, 1.1476, 1.1418
• Resistance levels: 1.2218, 1.2308, 1.2431, 1.2519

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. Yesterday, the price tested the priority change level but failed to consolidate higher. A false breakdown area was formed. The MACD indicator has become inactive, and the volatility on the threshold of the holidays is low. Under such market conditions, it is better to look for buy trades from the support level at 1.2092 but with a confirmation at the intraday time frames. Sell trades are best sought from the resistance level of 1.2218 but also better with confirmation.

Alternative scenario: if the price breaks down from the 1.2092 support level and fixes below it, the downtrend will likely resume.

• – UK GDP (q/q) at 09:00 (GMT+2).

The USD/JPY currency pair

• Prev Open: 131.51
• Prev Close: 132.45
• % chg. over the last day: +0.71 %

Japan is the world’s largest holder of US Treasuries outside the United States, and benchmark 10-year bond yields rose about 13 basis points in two sessions following the Bank of Japan’s decision. Investors are shorting yen positions and selling them in bond markets around the world. According to analysts, the sale of Japanese bonds could trigger a panicked influx of cash back into Japan, but so far, this is not happening. The overall fundamental picture is starting to change and comes down to expectations that the Bank of Japan will join other central banks in tightening monetary policy next year.

• Support levels: 131.22
• Resistance levels: 133.53, 134.73, 135.88, 137.03, 138.00, 139.09

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The MACD indicator has become inactive, forming a narrow price range. It is better to look for buy trades on intraday time frames from the support level of 131.22, but only with confirmation. Sell deals can be looked for from the resistance level of 133.53, provided that there is a reverse reaction.

Alternative scenario: If the price fixes above 137.00, the uptrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3610
• Prev Close: 1.3612
• % chg. over the last day: +0.01 %

Yesterday, new inflation data was released in Canada. The report showed that year-over-year consumer prices fell from 6.9% to 6.8%, while core inflation (which excludes food and energy prices) remained at 5.8% y/y. The key point is that the main components of core price pressures have shown an upward trend, and core inflation remains well above the Bank of Canada’s target, keeping the likelihood of a rate hike at the January meeting high.

• Support levels: 1.3590, 1.3521, 1.3438, 1.3386, 1.3360, 1.3281, 1.3212
• Resistance levels: 1.3656, 1.3700, 1.3776, 1.3855

From the point of view of technical analysis, the trend on the USD/CAD currency pair has changed to bullish. But the price is trading below the moving averages, and the MACD indicator is negative, indicating selling pressure inside the day. At the same time, volatility is decreasing in anticipation of the holidays. Buy trades should be considered from the support level of 1.3590, but with a confirmation in the form of a reversal, currently, there is none. Sell deals are best to look for on the intraday time frames from the resistance level of 1.3656, but with a confirmation in the form of a reverse initiative or after a false breakout, since the level has already been tested.

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3386, the downtrend will likely resume.