The Analytical Overview of the Main Currency Pairs on 2024.11.20

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0598
• Prev. Close: 1.0594
• % chg. over the last day: -0.04 %

ECB officials, including Vice President Luis de Guindos and Bundesbank President Joachim Nagel, warned that new US trade tariffs could hurt economic growth in the Eurozone while downplaying inflation concerns. The ECB has cut rates three times since June as inflation nears its 2% target, but growth forecasts have been downgraded twice. Markets expect a 25 basis point rate cut next month, with less likelihood of a larger change.

Trading recommendations

• Support levels: 1.0566, 1.0514, 1.0483
• Resistance levels: 1.0607, 1.0654, 1.0714, 1.0766, 1.0795, 1.0857

The EUR/USD currency pair’s hourly trend is bearish. Falling volumes indicate a decline in interest, which leads to the formation of flat accumulation. Yesterday, the price retested the resistance level of 1.0607, where sellers again showed a reaction. Currently, the price has consolidated below the level, which opens up selling opportunities up to 1.0566. Buying can be looked for from 1.0566, provided buyers react to the level. A breakout and consolidation above 1.0607 will open the price to 1.0654.

Alternative scenario:

if the price breaks the resistance level of 1.0654 and consolidates above it, the uptrend will be resumed with a high probability.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2672
• Prev. Close: 1.2682
• % chg. over the last day: +0.08 %

Today, the UK will release the monthly consumer inflation report. This report will primarily influence the Bank of England’s (BoE) decision at the December meeting. Economists expect core inflation, which excludes food and fuel costs, to fall from 3.2% to 3.1% y/y. Overall inflation is forecast at 2.2% y/y, significantly from 1.7% y/y last month. If the data comes out in line with or above the consensus forecast, it could strengthen the British currency significantly. If the inflation data turns out to be unexpected (below consensus), it will increase the likelihood of a rate cut in December, which could put pressure on the pound. 

Trading recommendations

• Support levels: 1.2661, 1.2601
• Resistance levels: 1.2697, 1.2726, 1.2766, 1.2878, 1.2905, 1.2982, 1.3023

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. Currently, the price is aiming to test the liquidity above 1.2697. If the sellers show a reaction here, the price may decline sharply, continuing to form a flat accumulation. Decreasing volumes increase the probability of such a scenario. A breakout and consolidation above 1.2697 will open the price to 1.2726, where we can look for selling, provided sellers take the initiative. Buying can be considered from 1.2661, subject to buyers’ reactions.

Alternative scenario:

if the price breaks the resistance level at 1.2769 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 154.61
• Prev. Close: 154.65
• % chg. over the last day: +0.02 %

On Wednesday, the Japanese yen fell back to 155 per dollar, recovering some of its recent gains. Markets are now eyeing the 160 level as a potential trigger for further government interventions similar to those undertaken in July. On the economic front, data showed Japanese exports rose by 3.1% in October, reversing a 1.7% decline in September and beating forecasts for a 2.2% increase. Imports also rose by 0.4%, defying expectations of a 0.4% drop. Meanwhile, Bank of Japan Governor Kazuo Ueda said on Monday that any future rate hike would be gradual, depending on the development of the economy. However, he did not give a specific timeline for when the hike might occur.

Trading recommendations

• Support levels: 154.57, 153.91, 153.70, 153.29, 153.03
• Resistance levels: 155.35, 155.76, 156.32

From a technical point of view, the medium-term trend of the USD/JPY currency pair is bullish. The price tested the liquidity below the level of priority change yesterday, but the buyers took the initiative here. Currently, the price is trying to test the liquidity above 155.35, where sellers will probably react. However, the main pool of liquidity remains above the resistance at 155.76. The support level 154.57 can be considered for buying, provided the buyers react to the level. Selling can be considered from 155.76, provided sellers take the initiative.

Alternative scenario:

if the price breakdown the support level of 153.91, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2611
• Prev. Close: 2632
• % chg. over the last day: +0.80 %

Gold rose 1% on Tuesday to surpass $2,630 an ounce, extending its rebound from a two-month low of $2,560 on Friday as a fresh escalation in the war between Russia and Ukraine sent investors rushing to the safety of bullion. Russia updated its nuclear doctrine to allow the use of nuclear weapons on the same morning that Ukraine fired US-made missiles into Russian territory for the first time since the war began. Fears that Russia could escalate the conflict and trigger retaliation from other countries led markets to favor safe-haven assets, lifting gold and Treasuries.

Trading recommendations

• Support levels: 2606, 2580, 2554, 2471
• Resistance levels: 2627, 2675, 2700, 2708, 2733, 2749

From the point of view of technical analysis, the trend on the XAU/USD is bearish. Currently, the price is forming a flat accumulation in the selling zone. While the price is narrow, it is recommended to refrain from trading inside the range. A return of price on impulse candles below 2627 will open up selling opportunities to 2606 or even 2580. A price consolidation on the impulse candles above the narrow flat, will open the way for the price to 2675. The probability of a price decline is higher.

Alternative scenario:

if the price breaks above the resistance level of 2704, the uptrend is likely to resume.