InvestMacro

The EUR/USD currency pair

• Prev Open: 0.9813
• Prev Close: 0.9748
• % chg. over the last day: -0.67 %

The seasonally adjusted unemployment rate in the Eurozone was 6.6% in September 2022, down from 6.7% in August. Europe’s labor market thus remains resilient, allowing the ECB to be more flexible in its interest rate hike cycle. Typically, when the labor market starts to decline and unemployment rises, the ECB immediately changes its monetary policy to a less hawkish one. But as long as the labor market is strong, the ECB has free hands.

• Support levels: 0.9755, 0.9702, 0.9601
• Resistance levels: 0.9823, 0.9871, 1.0055, 1.0111, 1.0162, 1.0230

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is still bullish. The price is trading below the moving levels but above the priority change level of 0.9755. The MACD indicator is in the negative zone, but sellers’ pressure is weak due to divergence. Under such market conditions, buy trades should be considered from the support level of 0.9755, but with additional confirmation, as the level has already been tested. Sell deals can be considered from the resistance level of 0.9823 or 0.9871, but with confirmation.

Alternative scenario: if the price breaks down through the support level of 0.9755 and fixes below it, the downtrend will likely resume.

• – Eurozone Services PMI (m/m) at 11:00 (GMT+2);
• – Eurozone ECB President Lagarde Speaks at 11:30 (GMT+2);
• – US Nonfarm Payrolls (m/m) at 14:30 (GMT+2);
• – US Unemployment Rate (m/m) at 14:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.1387
• Prev Close: 1.1158
• % chg. over the last day: -2.05 %

The Bank of England expectedly raised its rate by 75 BPS to 3.00%. This is the seventh rate hike this year and the highest cost of borrowing since November 2008. The Bank of England continues to struggle with critically high inflation (CPI 10.1% YoY). Due to the difference in rates between USD (4.00%) and GBP (3.00%), dollar assets remain more attractive to investors, and therefore we should not expect a global GBP/USD reversal upwards just yet. The British pound fell sharply against the US dollar after the UK Central Bank said it expects the recession to last through 2023 and the first half of 2024.

• Support levels: 1.1172, 1.1093, 1.0915, 1.0817
• Resistance levels: 1.1336, 1.1450, 1.1578, 1.1698, 1.1816, 1.1901

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 below the moving averages but above the priority change level. The MACD indicator is negative, but sellers’ pressure is weak. Under such market conditions, buy trades can be considered from the support level of 1.1172, but it is better after confirmation because the level has already been tested. Sell trades are best to look for on intraday time frames, the nearest resistance level is 1.1336, but also better with confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks down of the 1.1172 support level and fixes below it, the downtrend will likely resume.

• – UK Construction PMI (m/m) at 11:30 (GMT+2).

The USD/JPY currency pair

• Prev Open: 147.78
• Prev Close: 148.18
• % chg. over the last day: +0.27 %

Yesterday, Japan’s Finance Minister Suzuki said that in the near future, the government does not plan to intervene in the currency market. Thus, the situation on the USD/JPY currency pair remains the same. The difference between the interest rates of the Bank of Japan and the US Federal Reserve System keeps increasing. This situation will have a negative effect on the Japanese currency.

• Support levels: 147.41, 146.37, 145.50, 144.91, 144.19, 143.00
• Resistance levels: 148.82, 150.00, 151.05

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The price is trading at the level of the moving averages, the balance is forming. The MACD indicator has become inactive again, but buyer pressure remains. Under such market conditions, buy trades can be looked for on intraday time frames from the support level of 147.41 or 146.37. Sell deals can be looked for from the resistance level of 148.82, but only with additional confirmation since the level has already been tested.

Alternative scenario: If the price fixes above 150.00, the uptrend will likely resume.

• – Japan Services PMI (m/m) at 02:30 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.3707
• Prev Close: 1.3747
• % chg. over the last day: +0.29 %

Canada’s total number of construction permits fell by 17.5% in September, the largest recorded monthly decline. For the first time since September 2019, all survey components showed a monthly decline, with both the residential and non-residential sectors. This is a sign that the real estate market is heading for a recession. If today’s unemployment data also points to problems, the Bank of Canada will revise its monetary policy toward a more dovish tone.

• Support levels: 1.3657, 1.3586, 1.3515, 1.3454
• Resistance levels: 1.3776, 1.3855, 1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair has changed to bullish. The price confidently broke through and consolidated above the moving averages and the priority change level. The MACD indicator is negative now, there is seller’s pressure on the lower time frames. Buy trades should be considered on the lower time frames from the support level of 1.3657 or 1.3586. For sell deals, it is best to consider the resistance level of 1.3776, but only after the additional confirmation.

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3586, the downtrend will likely resume.

• – Canada Unemployment Rate (m/m) at 14:30 (GMT+2);
• – Canada Ivey PMI (m/m) at 16:00 (GMT+2).

The EUR/USD currency pair

• Prev Open: 0.9876
• Prev Close: 0.9816
• % chg. over the last day: -0.61 %

The dollar Index sharply strengthened yesterday after the speech of Federal Reserve Chairman Jerome Powell. The US Federal Reserve expectedly raised interest rates by 0.75%. Still, at the press conference, the Fed chief indicated that it was premature to discuss a pause in interest rate hikes and added that the Central Bank was firmly committed to a restraining monetary policy to achieve price stability.

• Support levels: 0.9816, 0.9755, 0.9601.
• Resistance levels: 0.9971, 0.9928, 1.0055, 1.0111, 1.0162, 1.0230

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is still bullish. The price is trading below the moving levels but above the change in priority. The MACD indicator is in the negative zone, but sellers’ pressure is weak due to divergence. Under such market conditions, buy trades should be considered from the support level of 0.9816 or 0.9755, but with additional confirmation. Sell deals can be considered from the resistance level of 0.9871, but also with confirmation.

Alternative scenario: if the price breaks down through the support level of 0.9755 and fixes below it, the downtrend will likely resume.

• – Eurozone ECB President Lagarde Speaks at 10:05 (GMT+2);
• – Eurozone Unemployment Rate (m/m) at 12:00 (GMT+2);
• – US Initial Jobless Claims (w/w) at 14:30 (GMT+2);
• – US ISM Services PMI (m/m) at 16:00 (GMT+2);
• – US Natural Gas Storage (w/w) at 16:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.1485
• Prev Close: 1.1389
• % chg. over the last day: -0.84 %

The British pound declined yesterday amid hawkish comments from Powell. The Bank of England will hold its monetary policy and interest rate meeting today. The rate is expected to rise by 0.75%. But analysts believe that such a move will not be enough to stop the rise in inflation. On the other hand, the UK economy is already on the way to recession. And the sharp rise in borrowing costs has already begun to cool some sectors of the economy, such as real estate.

• Support levels: 1.1337, 1.1172, 1.1093, 1.0915, 1.0817
• Resistance levels: 1.1450, 1.1578, 1.1698, 1.1816, 1.1901

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 below the moving averages. The MACD indicator is negative, but there is a divergence, and the sellers’ pressure is weak. Under such market conditions, buy trades can be considered from the support level of 1.1337, but better after confirmation. Sell trades are best to look for on intraday time frames, the nearest resistance level is 1.1450, but also better with confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks down of the 1.1172 support level and fixes below it, the downtrend will likely resume.

• – UK Services PMI (m/m) at 11:30 (GMT+2);
• – UK BoE Interest Rate Decision (m/m) at 14:00 (GMT+2);
• – UK BoE Monetary Policy Statement (m/m) at 14:00 (GMT+2);
• – UK BoE Gov Bailey Speaks at 14:30 (GMT+2).

The USD/JPY currency pair

• Prev Open: 148.19
• Prev Close: 147.79
• % chg. over the last day: -0.28 %

The situation on the USD/JPY currency pair has not changed. After yesterday’s Fed meeting, it became clear that the US Federal Reserve will not pause and will continue to actively raise rates and trim the balance sheet. The interest rate differential between the Bank of Japan and the US Fed continues to widen. Such a situation will have a negative effect on the Japanese currency.

• Support levels: 146.37, 145.50, 144.91, 144.19, 143.00
• Resistance levels: 148.09, 148.82, 147.75, 148.64, 148.64, 150.00, 151.05

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The price is traded on the level of moving averages. The MACD indicator has become negative again, but the buyers’ pressure is still there. Under such market conditions, buy trades can be sought on the intraday time frames from the support level of 146.37, but only after the confirmation. Sell deals can be searched from the resistance level of 148.09 or 148.82, but only with additional confirmation, as the level has already been tested.

Alternative scenario: If the price fixes above 150.00, the uptrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3628
• Prev Close: 1.3706
• % chg. over the last day: +0.57 %

Today, many economists will be watching for Canadian Finance Minister Chrystia Freeland to speak on how the government is dealing with the heightened risks of a recession. The statement will provide information on the state of the Canadian economy in a challenging global environment and outline the government’s plan to continue to build the economy.

• Support levels: 1.3586, 1.3515, 1.3454
• Resistance levels: 1.3721, 1.3855, 1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bearish, but the price has approached the priority change level. The MACD indicator has become positive, and the buyers` pressure is increasing. The best way to sell is to consider the resistance level of 1.3721, but only after the additional confirmation. Buy trades should be considered on the lower time frames from the support level of 1.3586 or after the price fixation above 1.3721.

Alternative scenario: if the price breaks out and consolidates above the resistance level of 1.3721, the uptrend will likely resume.

• – Canada Building Permits (m/m) at 14:30 (GMT+2).

The EUR/USD currency pair

• Prev Open: 0.9882
• Prev Close: 0.9873
• % chg. over the last day: -0.09 %

The US Fed is likely to raise the rate by 0.75% today. This scenario is already in the price movement, so the speech of the US Federal Reserve Chairman Jerome Powell will be of most interest. If Mr. Powell hints that the Central Bank needs to take a slower rate hike, it could lead to a sharp drop in the dollar Index and a rise in the European currency. Conversely, hawkish statements that the US Fed will stay on its current course could further strengthen the dollar Index.

• Support levels: 0.9873, 0.9835, 0.9755, 0.9601.
• Resistance levels: 0.9928, 1.0055, 1.0111, 1.0162, 1.0230

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. The MACD indicator is in the negative zone, but sellers’ pressure is weak due to the presence of divergence. Under such market conditions, buy trades should be considered from the support level of 0.9873, but with additional confirmation, since the level has already been tested. Sell deals can be considered from the resistance level of 0.9928, but also with confirmation.

Alternative scenario: if the price breaks down through the support level of 0.9834 and fixes below it, the downtrend will likely resume.

• – Spanish Manufacturing PMI (m/m) at 10:15 (GMT+2);
• – Italian Manufacturing PMI (m/m) at 10:45 (GMT+2);
• – French Manufacturing PMI (m/m) at 10:50 (GMT+2);
• – German Manufacturing PMI (m/m) at 10:55 (GMT+2);
• – German Unemployment Rate (m/m) at 10:55 (GMT+2);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+2);
• – US ADP Nonfarm Employment Change (m/m) at 14:15 (GMT+2);
• – US FOMC Statement at 20:00 (GMT+2);
• – US Fed Interest Rate Decision at 20:00 (GMT+2);
• – US FOMC Press Conference at 20:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.1465
• Prev Close: 1.1482
• % chg. over the last day: +0.15 %

The UK manufacturing sector started the last quarter of the year weakly. Production declined for the fourth consecutive month due to a sharp drop in new orders, weak export demand, and supply chain disruptions. The seasonally adjusted purchasing managers’ Index (PMI) fell to a 29-month low of 46.2 in October, down from 48.4 in September. Weakening global economic conditions, lower demand in China, the war in Ukraine, and ongoing Brexit-related problems that are holding back export performance were cited as reasons.

• Support levels: 1.1466, 1.1337, 1.1172, 1.1093, 1.0915, 1.0817
• Resistance levels: 1.1578, 1.1698, 1.1816, 1.1901

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame is bullish. The price is trading at the level of the moving averages. The MACD indicator is negative, there is a divergence, and buyers’ pressure is still present. Under such market conditions, buy trades can be considered from the support level of 1.1466 or 1.1337, but better after confirmation. Sell trades are best to look for on intraday time frames, the nearest resistance level is 1.1578, but also better with confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks down of the 1.1172 support level and fixes below it, the downtrend will likely resume.

• – US FOMC Statement at 20:00 (GMT+2);
• – US Fed Interest Rate Decision at 20:00 (GMT+2).

The USD/JPY currency pair

• Prev Open: 148.74
• Prev Close: 148.23
• % chg. over the last day: +0.34 %

Japanese Finance Minister Shun’ichi Suzuki said Tuesday that the country’s currency interventions were a covert operation to maximize the impact. But analysts think Mr. Suzuki is being disingenuous, as there had been talking of intervention long before the intervention itself. In any case, the aim was achieved – the Japanese yen has strengthened against the dollar and now is resisting falling. Experts think that a lot will depend on the US Federal Reserve policy, and if there are hints for a slower rate of increase today, the dollar Index might lose its strength, which would lead to a wide sideways movement or a slow strengthening of the yen. But let’s not forget that the interest rate differential still points to the USD/JPY rising.

• Support levels: 146.64, 145.50, 144.91, 144.19, 143.00
• Resistance levels: 148.09, 148.82, 147.75, 148.64, 148.64, 150.00, 151.05

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The price is traded on the moving averages. The MACD indicator has become negative again, but the buyers’ pressure remains. Under such market conditions, buy trades can be sought on the intraday time frames from the support level of 146.64, but only after the confirmation. Sell deals can be searched from the resistance level of 148.09 or 148.82, but only with additional confirmation, as the level has already been tested.

Alternative scenario: If the price fixes above 150.00, the uptrend will likely resume.

• – Japan Monetary Policy Meeting Minutes at 01:50 (GMT+2);
• – US FOMC Statement at 20:00 (GMT+2);
• – US Fed Interest Rate Decision at 20:00 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.3619
• Prev Close: 1.3629
• % chg. over the last day: +0.07 %

Bank of Canada (BoC) Governor Tiff Macklem indicated that the Central Bank expects further rate hikes, but the further pace of increase has not yet been determined. According to Macklem, how much further rates rise will depend on how monetary policy works, how supply-side problems are handled and how inflation responds to this tightening cycle. But it was also said that the tightening phase is coming to an end.

• Support levels: 1.3569, 1.3515, 1.3454
• Resistance levels: 1.3721, 1.3855, 1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bearish. The price is trading at the level of moving averages, wide-volatility balance is formed. The MACD indicator has become inactive, there is a slight buying pressure. The best way to sell is to consider the resistance level of 1.3721, but only after the additional confirmation. Buy trades should be considered on the lower time frames from the support level of 1.3569 or 1.3542, but also better after confirmation.

Alternative scenario: if the price breaks out and consolidates above the resistance level of 1.3721, the uptrend will likely resume.

• – Canada BOC Macklem Speaks at 00:30 (GMT+2);
• – US Crude Oil Reserves (w/w) at 16:30 (GMT+2);
• – US FOMC Statement at 20:00 (GMT+2);
• – US Fed Interest Rate Decision at 20:00 (GMT+2).

The EUR/USD currency pair

• Prev Open: 0.9964
• Prev Close: 0.9881
• % chg. over the last day: -0.84 %

The annual inflation rate in the Eurozone reached 10.7%, against expectations of growth of 10.3%. The core consumer price level, which excludes food and energy prices, rose to 5.0% from 4.8%. Eurozone GDP growth slowed in the third quarter, with business activity indices suggesting further declines. Energy prices continue to drive inflation, adding 4.2% to overall inflation in October. Meanwhile, inflation expectations for 2023 have also risen. All this indicates that it is too early for the ECB to slow down the pace of monetary policy tightening, and it is likely that Europe’s Central Bank will again have to aggressively raise interest rates by 0.75% at its next meeting. And that will slow down business activity in the region even more.

• Support levels: 0.9873, 0.9835, 0.9755, 0.9601
• Resistance levels: 0.9924, 1.0055, 1.0111, 1.0162, 1.0230

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, but the correction is close to the end. The MACD indicator is in the negative zone, but sellers’ pressure is weak due to the presence of divergence. Under such market conditions, buy trades should be considered from the support level 0.9873, but with additional confirmation, as the level has already been tested. Sell deals can be considered from the resistance level of 0.9924, but also with confirmation.

Alternative scenario: if the price breaks down through the support level of 0.9834 and fixes below it, the downtrend will likely resume.

• – US ISM Manufacturing PMI (m/m) at 16:00 (GMT+2);
• – US JOLTs Job Openings (m/m) at 16:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.1616
• Prev Close: 1.1465
• % chg. over the last day: -1.32 %

The pound fell by 1.3% against the dollar yesterday. The Bank of England is likely to raise rates by 75 basis points at Thursday’s meeting, although analysts say long-term rate expectations are under continued pressure. Bank of England deputy governor Ben Broadbent suggested that the cost of borrowing, as assessed by investors, would hit the UK economy. Noting that, he doubted that the UK could do a “soft landing” or, in other words, bring inflation back to the target level without significantly damaging the real economy.

• Support levels: 1.1466, 1.1337, 1.1172, 1.1093, 1.0915, 1.0817
• Resistance levels: 1.1578, 1.1698, 1.1816, 1.1901

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 negative, but there is still buying pressure. Under such market conditions, buy trades can be considered from the support level of 1.1466 or 1.1337, but better after confirmation. Sell trades are best sought on intraday time frames, the nearest resistance level is 1.1578, but also better with confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks down of the 1.1172 support level and fixes below it, the downtrend will likely resume.

• – UK Manufacturing PMI (m/m) at 11:30 (GMT+2).

The USD/JPY currency pair

• Prev Open: 147.41
• Prev Close: 148.75
• % chg. over the last day: +0.90 %

Japan’s Finance Ministry said Monday that it spent a record $42.8 billion in currency intervention in October to support the yen. The currency intervention has temporarily strengthened the Japanese currency. Still, the fundamental picture remains the same: the Bank of Japan does not intend to abandon its soft monetary policy until spring 2023, while the US Federal Reserve is in a cycle of tightening and rising interest rates. Even if the US Fed cuts the pace of increases, the interest rate differential will still widen, putting negative pressure on the yen.

• Support levels: 147.99, 146.64, 145.50, 144.91, 144.19, 143.00
• Resistance levels: 148.82, 147.75, 148.64, 148.64, 150.00, 151.05

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The price is trading at the level of the moving averages. The MACD indicator has become positive, but the buyers’ pressure is decreasing. Under such market conditions, traders can look for buy trades on the intraday time frames from support at 147.99 or 146.64, but only after the confirmation. Sell deals can be sought from the resistance level of 148.82, but only with additional confirmation, as the level has already been tested.

Alternative scenario: If the price fixes above 150.00, the uptrend will likely resume.

• – Japan Manufacturing PMI (m/m) at 02:30 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.3605
• Prev Close: 1.3619
• % chg. over the last day: +0.10 %

The Canadian dollar is a commodity currency and is highly dependent on the movements of the dollar Index as well as oil price movements. Monthly government data showed that US oil production rose to nearly 12 million BPD in August, the highest since the COVID-19 pandemic. With new blockages in China indicating weak demand, oil prices are declining, negatively affecting the Canadian dollar. But analysts’ medium-term forecasts suggest that oil prices will rise as OPEC+ will cut production in November. This could give a boost to the Canadian dollar, but it should be noted that a substantial increase in energy prices could trigger a new round of higher inflation.

• Support levels: 1.3542, 1.35000, 1.3454
• Resistance levels: 1.3610, 1.3597, 1.3679, 1.3795, 1.3855, 1.3968.

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bearish. The price is trading at the level of moving averages, wide-volatility balance is formed. The MACD indicator has become negative, there is slight seller pressure. For sell deals, it is best to consider the resistance level of 1.3609, but only after the additional confirmation. Buy trades should be considered on the lower time frames from the support level of 1.3542, but it is also better after confirmation.

Alternative scenario: if the price breaks out and consolidates above the resistance level of 1.3855, the uptrend will likely resume.

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