The EUR/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.1451
Prev Close: 1.1443
% chg. over the last day: -0.07%
Inflationary pressures in Germany continue to update records. Wholesale prices in Germany increased to 15.2% in October, the highest level since March 1974. But hedge fund analysts believe inflation in the Eurozone will remain at the same level. The inflation data in Europe will be released Wednesday this week.
Trading recommendations
Support levels: 1.1436
Resistance levels: 1.1535, 1.1573, 1.1613, 1.1645, 1.1667, 1.1717, 1.1772
From the technical point of view, the EUR/USD on the hour time frame is bearish. The MACD indicator has become inactive, but traders should expect a technical rebound because of MACD divergence. Under such market conditions, traders should consider sell positions from the resistance levels near the moving average since the price has deviated strongly from the averages. Buy trades should be considered only from the support levels of the higher time frame, given the buyers’ initiative.
Alternative scenario: if the price breaks out through the 1.1573 resistance level and fixes above, the mid-term uptrend will likely resume.
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.3365
Prev Close: 1.3412
% chg. over the last day: +0.35%
At the moment, investors prefer to buy US dollars as the Fed has already started cutting the QE program, while the Bank of England left the monetary policy unchanged at its last meeting. But the rhetoric of the Bank of England Governor changed dramatically last week, who promised that the central bank of England is already preparing to hike interest rates. Last week’s UK GDP data was worse than expected, so if this week’s inflation data is worse than expected, the British pound could rise sharply on expectations of a rate hike.
Trading recommendations
Support levels: 1.3360
Resistance levels: 1.3508, 1.3616, 1.3685, 1.3748, 1.3780, 1.3831, 1.3886
On the hourly time frame, the trend on GBP/USD is bearish. The MACD indicator has become inactive. Under such market conditions, traders should consider sell positions from the resistance levels near the moving average since the price has deviated strongly from the averages. Buy trades should be considered only from the support levels of the higher timeframe, given the buyers’ initiative.
Alternative scenario: if the price breaks out through the 1.3617 resistance level and consolidates above, the bullish scenario will likely resume.
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 114.05
Prev Close: 113.91
% chg. over the last day: -0.12%
At the moment, there are no fundamental reasons for the USDJPY quotes to go down in the mid-term since the Bank of Japan has kept its monetary policy soft until the end of the year. At the same time, the Fed has been already cutting QE and is likely to accelerate cuts due to a sharp rise in inflation. This week, Japan will report on inflation, but analysts don’t expect any regional inflation rise, so USDJPY quotes are inclined to grow in the mid-term.
Trading recommendations
Support levels: 113.42, 112.95, 112.30, 111.53, 110.99, 110.65
Resistance levels: 114.48, 115.15
The global trend on the USD/JPY currency pair is bullish. On Friday, the quotes were slightly decreased because of MACD divergence. Under such market conditions, it’s better to look for buy positions from the buyers’ initiative zone near the moving average. Sell positions should be considered from the resistance levels of higher time frames, given there is sellers’ initiative, but only with short targets.
Alternative scenario: if the price falls below 112.87, the uptrend will likely be broken.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.2570
Prev Close: 1.2544
% chg. over the last day: -0.21%
The Canadian dollar is a commodity currency, so the USD/CAD currency pair highly depends on the dollar index dynamics and oil prices. On Friday, the dollar index was trading flat, while oil prices slightly increased, which led to the temporary strengthening of the Canadian dollar and a decrease of USD/CAD quotes. Fundamentally, both the dollar index and oil quotes have an upward trend now, so in the medium term USD/CAD will be trading flat.
Trading recommendations
Support levels: 1.2496, 1.2456, 1.2417, 1.2388
Resistance levels: 1.2598, 1.2628, 1.2729, 1.2774
From a technical point of view, the trend of the USD/CAD currency is bullish. The MACD indicator has become inactive. Under such market conditions, it is better to look for buy trades from the support levels near the moving average since the price has strongly deviated from its averages. Sell deals should be considered from the resistance levels of the higher time frame.
Alternative scenario: if the price breaks down through the 1.2388 support level and fixes below, the downtrend will likely resume.
