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The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.1319
Prev Close: 1.1372
% chg. over the last day: +0.47%

TThe housing price index in Germany increased more than 1% due to an influx of money from the European Central Bank. Germany has decided to invest free money in real estate.

Trading recommendations

Support levels: 1.1256
Resistance levels: 1.1386, 1.1436, 1.1535, 1.1613, 1.1667, 1.1717

From the technical point of view, the EUR/USD on the hour time frame is bearish. The Euro continues to show weakness. The MACD indicator has become positive, but the buyers' pressure is weakening. 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, but only with short targets.

Alternative scenario: if the price breaks out through the 1.1535 resistance level and fixes above, the mid-term uptrend will likely resume.

News feed for 2021.11.19:

• ECB President Christine Lagarde’s Speech at 10:00 (GMT+2);
• US FOMC Member Waller speaks at 17:45 (GMT+2);
• US FOMC Member Clarida speaks at 19:15 (GMT+2);
• ECB President Christine Lagarde’s Speech at 22:00 (GMT+2).

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.3480
Prev Close: 1.3499
% chg. over the last day: +0.14%

The British pound is slowly strengthening in anticipation that the Central Bank of England will raise the interest rate at its next meeting. On the interbank lending market in London, there is an increase in Libor rates. This indicates that bankers have already started to consider a future interest rate hike.

Trading recommendations

Support levels: 1.3434, 1.3360
Resistance levels: 1.3507, 1.3575, 1.3685, 1.3748

On the hourly time frame, the trend on GBP/USD is bearish. But the British pound looks more confident than the euro. The MACD indicator has become inactive. Under such market conditions, traders should consider sell positions from the priority change level. 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 1.3575 resistance level and consolidates above, the bullish scenario will likely resume.

News feed for 2021.11.19:

• UK Retail Sales (m/m) at 09:00 (GMT+2).

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 114.10
Prev Close: 114.24
% chg. over the last day: +0.12%

Japan's consumer price index increased by 0.1% in October. The Bank of Japan does not expect a significant increase in inflation in the country. The country's Prime Minister Fumio Kishida will soon present a new stimulus package, which, in particular, will include measures to mitigate the negative economic consequences of rising energy prices.

Trading recommendations

Support levels: 113.79, 113.32, 112.87, 112.30
Resistance levels: 114.42, 115.15, 115.50

The global trend on the USD/JPY currency pair is bullish. But the price has corrected to the moving average line. The MACD indicator has become inactive. 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 113.32, the uptrend will likely be broken.

News feed for 2021.11.19:

• Japan National Core Consumer Price Index (m/m) at 01:30 (GMT+2).

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.2608
Prev Close: 1.2597
% chg. over the last day: -0.09%

The Canadian dollar is a commodity currency, so the USD/CAD currency pair highly depends on the dynamics of the dollar index and oil prices. Yesterday, the dollar index slightly decreased while oil prices increased. As a result, the USD/CAD currency pair declined slightly due to the strengthening of the Canadian currency. Fundamentally, both the dollar index and oil quotes have an upward trend now, so USD/CAD will be trading flat in the medium term.

Trading recommendations

Support levels: 1.2598, 1.2496, 1.2416, 1.2388
Resistance levels: 1.2628, 1.2729

From a technical point of view, the trend of the USD/CAD currency is bullish. The MACD indicator is in the positive zone, but there are signs of divergence, which indicates the weakness of the buyers. Under such market conditions, it is better to look for buy trades from the support levels near the moving average. Sell deals should be considered from the resistance levels of the higher time frame or after the price returns to the corridor of 1.2496-1.2598.

Alternative scenario: if the price breaks down through the 1.2416 support level and fixes below, the downtrend will likely resume.

News feed for 2021.11.19:

• Canada Retail Sales (m/m) at 15:30 (GMT+2).

The USD tended to retreat against a number of its counterparts yesterday amidst low volatility, yet seems about to end the week higher. It should be noted that yesterday's financial releases may have provided some mixed emotions as the initial jobless claims figure ticked up instead of dropping as expected, yet the Philly Fed business index jumped substantially implying a greater degree of economic activity in the wider Philly area. No major financial releases are expected from the US today hence we expect the greenback to be driven by fundamentals and we note that a number of Fed policymakers are scheduled to speak and could sway the market's mood. Remaining on the Fed issues we expect Biden to provide with his nominee for the Fed's top position and the main candidates currently considered are incumbent Fed Chairman Jerome Powell and the Fed's Board of Governor member Lael Brainard. The issue is strongly political as the left leaning side of the Democrats seem to favour Brainard for a stronger supervision of financial institutions, while Republicans seem to favour Powell, and overall caution is advised as unexpected volatility could be created by the issue.

EUR/USD rose yesterday testing the 1.1370 (R1) resistance line but not breaking it. As the pair's upward movement broke the downward trendline characterising its movement since the 10th of the month, we temporarily switch our bearish outlook in favour of a sideways movement between the 1.1370 (R1) resistance line and the 1.1300 (S1) support line. Please note that the RSI indicator below our 4-hour chart runs just below the reading of 50 implying a rather indecisive market. Should the bulls take over we may see EUR/USD breaking the 1.1370 (R1) resistance line and tale aim for the 1.1445 (R2) resistance level. Should the bears regain the momentum like in the past week, we may see the pair dropping, breaking the 1.1300 (S1) support line and take aim of the 1.1225 (S2) level.

CAD stabilises as oil prices seem to regain momentum

The Loonie tended to stabilize against the USD yesterday yet today CAD traders are expected to keep an eye out for the release of Septembers' retail sales growth rate. Should the rate slowdown and decline into the negatives we may see Loonie traders being disappointed as it would imply that the average Canadian consumer is less willing and/or able to spend in the Canadian economy and contribute to its recovery. On the other hand, CAD traders are also keeping an eye out for oil prices, which found some support yesterday as oil traders seemed able to look past the possibility of the US in cooperation with other countries releasing part of their strategic reserves. Should oil prices continue to rise, we may see the CAD finding some further support as Canada is a major oil producing country.

USD/CAD retreated after testing the 1.2645 (R1) resistance line yesterday and seems to show some signs of stabilisation. We tend to maintain our bullish outlook for the pair as long as it remains above the upward trendline incepted since the 27th of October. The RSI indicator below our 4-hour chart is between the readings of 50 and 70 implying an advantage for the bulls. Should the buying interest of the market persist, we may see the pair breaking the 1.2645 (R1) resistance line in search of higher highs. Should a correction lower be performed by the market for USD/CAD, we may see the pair breaking the 1.2580 (S1) support line and aim for the 1.2500 (S2) level.

Other market highlights for today

Today in the European session we note the release of Norway's GDP rate for Q3 as well as UK's retail sales growth rate for October. In the American session we get Canada's retail sales for September and oil traders may also be interested in the release of the weekly US Baker Hughes oil rig count. On the monetary front we note the planned speeches of ECB President Lagarde and from the Fed we note the Fed's Vice Chairman Clarida as well as Fed Board Governor Waller.

EUR/USD H4 Chart

Support: 1.1300 (S1), 1.1225 (S2), 1.1165 (S3)

Resistance: 1.1370 (R1), 1.1445 (R2), 1.1515 (R3)

USD/CAD H4 Chart

Support: 1.2580 (S1), 1.2500 (S2), 1.2425 (S3)

Resistance: 1.2645 (R1), 1.2710 (R2), 1.2775 (R3)

The US stock indices were traded yesterday without a single trend. The Dow Jones index decreased by 0.17% by the stock exchange close, the S&P 500 index increased by 0.34%, and the technology Nasdaq added 0.45%. The number of jobless claims in the US fell by 1,000 to 268,000 last week. This has been the lowest number since March 2020. According to S&P analysts, global inflation will peak in the fourth quarter of 2021. All investor attention is now focused on when central banks will start raising interest rates in response to rising inflation.

Nvidia Corp's stock price increased by 8.3% yesterday. The graphics processor maker finished the third quarter of its fiscal year with record revenue. Shares of Macy's Inc added 21.2%. The American department store chain posted a profitable third quarter of 2021, with adjusted earnings well above analysts' forecasts.

European stock indexes closed in the red zone yesterday. The Stoxx Europe 600 composite index of the region's largest companies decreased by 0.46% by the close of trading. British FTSE 100 decreased by 0.5%, German DAX lost 0.18%, French CAC 40 decreased by 0.21%, Italian FTSE MIB decreased by 0.59%, Spanish IBEX 35 lost 1%. Investors remain concerned about rising consumer prices in the region. Given that the ECB has no plans to cut stimulus measures soon, inflation in the region could rise even higher, which negatively affects national currencies.

Turkey's central bank is cutting its key interest rate for the third consecutive month. The cut led to further declines in real yields as consumer inflation rose to an annualized 19.9% in October. This year, the Turkish lira has weakened nearly 30% against the dollar and more than 15% this quarter alone, the worst of any major currency. President Recep Tayyip Erdogan has made it clearer that he wants lower interest rates. Turkey's central bank is meeting his demands at the expense of currency and price stability.

Oil has increased its losses in recent days due to the prospect of using strategic reserves by the US and other countries. China has said it was working on releasing some crude oil from its reserves. But the negative effect on oil is unlikely to be long-term.

Gold prices have recently stabilized slightly. Analysts' opinions on gold are very different. On the one hand, investors habitually buy the "yellow metal" to hedge against inflation. On the other hand, tighter monetary policy leads to higher government bond yields, which negatively impacts gold prices.

Asia-Pacific stock indices were mostly increasing on Friday. Japan's Nikkei 225 index gained 0.5% amid expectations that Prime Minister Fumio Kishida will soon introduce a new stimulus package. It includes measures to mitigate the negative economic impact of rising energy prices. The Chinese Shanghai Composite added 1.13% today, South Korean KOSPI gained 0.8%, and the Australian S&P/ASX 200 added 0.23%. The growth of the Chinese market is supported by the rise in shares of consumer sector companies and the "green energy" sector. But Hong Kong Hang Seng index decreased by 1.22% amid the sell-off of technology stocks.

Alibaba Group posted a net income of CN¥46.212 billion, down 36.7% from CN¥72.961 billion as compared to the previous year.

China Evergrande Group plans to sell its entire stake in HengTen Networks Group Ltd. with a huge loss. The threat of default still hangs over the major developer.

Most analysts are inclined to believe that the Reserve Bank of New Zealand will start to tighten its monetary policy at its meeting next week. Analysts expect a 50 basis points (bps) interest rate hike.

Main market quotes:

• S&P 500 (F) 4,704.54 +15.87 (+0.34%)
• Dow Jones 35,870.95 −60.10 (−0.17%)
• DAX 16,221.73 −29.40 (−0.18%)
• FTSE 100 7,255.96 −35.24 (−0.48%)
• USD Index 95.54 −0.29 (−0.30%)

Important events for today:

• Japan National Core Consumer Price Index (m/m) at 01:30 (GMT+2);
• UK Retail Sales (m/m) at 09:00 (GMT+2);
• ECB President Christine Lagarde’s Speech at 10:00 (GMT+2);
• Canada Retail Sales (m/m) at 15:30 (GMT+2);
• UUS FOMC Member Waller speaks at 17:45 (GMT+2);
• US FOMC Member Clarida speaks at 19:15 (GMT+2);
• ECB President Christine Lagarde’s Speech at 22:00 (GMT+2).

In a speech, ECB President Christine Lagarde said that the central bank focus on "medium term, not on current inflation numbers". "When inflation pressure is expected to fade – as is the case today – it does not make sense to react by tightening policy," she added. "The tightening would not affect the economy until after the shock has already passed."

Lagarde also said, "supply shock" will tend to "push up inflation and depress output. In this case, "tighter monetary policy would only exacerbate the contractionary effect on the economy." The Eurozone is facing a "mixture of shocks", partly related to catch-up demand but has a "strong supply-driven element". "Tightening policy prematurely would only make this squeeze on household incomes worse."

"The conditions to raise rates are very unlikely to be satisfied next year," she said. "Moreover, even after the expected end of the pandemic emergency, it will still be important for monetary policy – including the appropriate calibration of asset purchases – to support the recovery and the sustainable return of inflation to our target of 2%."

Full speech here.

EUR/USD

Current level - 1.1361

The euro recovered some of its recent losses against the dollar and,during the early hours of today`s trading, the pair is testing the first resistance at 1.1365. A successful breach should lead to a continuation of the corrective move towards the target at 1.1459. However, if the bears re-enter the market at the current levels and the resistance at 1.1365 holds, another test of the support at 1.1292 would be the most probable scenario. A successful violation of the mentioned level, followed by a breach of the lower zone at 1.1263, would strengthen the negative expectations for the future path of the EUR/USD, thus deepening the sell-off that started last week.

USD/JPY

Current level - 114.36

The bears lost momentum and the currency pair returned to its previous range. At the time of writing this analysis, the Ninja is testing the resistance levels between 114.26 and 114.41, a successful breach of which would easily help the bulls to continue the rally of the greenback against the yen and lead the pair towards 114.92. The main support zone can be found at the level of 113.77, followed by the lower one at 113.41.

GBP/USD

Current level - 1.3482

The attacks on the resistance zone at 1.3503 were not successful, but the Cable continues to trade just below the mentioned level. Better-than-expected data in the United Kingdom for the retail sales (today; 07:00 GMT) could help the bulls prevail later on in the session. If they manage to breach the mentioned resistance, we will most likely witness a move towards the resistance at 1.3551. In the more likely scenario, in which the bears take control, the pair should head towards 1.3439 and potentially extend the drop towards the level at 1.3400.

GBP/AUD technical analysis

• Bullish trend but resistance is reached.
• The price has reached historical sellers.
• Rejection below W H5.
• W H4 is possible target.

1. Support order block.
2. Historical sellers at order block.
3. Low.
4. Fresh sellers.
5. Breakout.

GBP/AUD has formed the 2-4 retracement which is called "The Valley". We should see a move down as today it's profit-taking day. We can see historical sellers and the expectation is that the price should be moving down without move up. But only if the breakout line (blue line in the chart) is taken out. So below 1.8495 we should see a move down. The main target is W H4 1.8426. GBP/AUD is also showing the triple top resistance.

The Euro slips in early Friday, reducing hopes for stronger recovery, as fresh weakness offsets signal from reversal pattern that formed on daily chart. On Wednesday’s long-tailed Doji and Thursday’s long bullish candle.

Traders remain very short Euro, as dollar holds firm tone, inflated by the most recent strong US inflation and retail sales data, which set scope for earlier than expected rate hike and increase pressure on Fed.

On the other side, rising number of Covid-19 infections in the Europe and continuous drop in car sales, may add to ECB’s stance of keeping record low rates.

Technical studies on daily chart show fresh bearish momentum and MA’s in full bearish setup that maintains negative bias.

Bears are on track for renewed attack at key Fibo support at 1.1290 (61.8% of 1.0635/1.2349) which was dented on Wednesday but providing headwinds.

Firm break here would open way for fresh bearish acceleration towards a minor daily higher base at 1.1168 which guards more significant supports at 1.1040/1.1000 (Fibo 76.4% of 1.0635/1.2349/psychological).

The pair is on track for the second consecutive strong weekly fall that adds to negative signals, with the single currency expected to remain under increased pressure unless fundamentals drastically improve.

Caution on failure to register a weekly close below 1.1290 pivot that would signal prolonged consolidation, however, bears are expected to remain intact while consolidation stays below 1.1430/40 zone (daily Tenkan-sen/Fibo 38.2% of 1.1582/1.1263 bear-leg).

Res: 1.1373, 1.1436, 1.1477, 1.1500.
Sup: 1.1290, 1.1263, 1.1200, 1.1168.

GBPJPY is recouping some lost ground from the pullback off the near 64-month peak of 158.20. The longer-term 200-day simple moving average (SMA) is endorsing the positive structure in the bigger picture, while the rising 50-day SMA is promoting the recent progress in the pair.

The Ichimoku lines are not conveying any ruling directional forces at present, while the short-term oscillators are reflecting conflicting messages in momentum. The MACD, below the zero mark, has nudged above its red trigger line indicating that negative momentum is fading. The RSI is pointing upwards and has pierced above the 50 level. That said, the stochastic %K line is turning downwards, showing some vulnerability in bullish action in the pair.

In the positive scenario, resistance could commence from the nearby 154.65 barrier and the neighbouring blue Kijun-sen line at 155.30. Pushing higher, the bulls could aim for the 156.00 and 157.00 hurdles respectively, before challenging a resistance zone established by the 157.84 and 158.20 barriers. The former happens to be the 161.8% Fibonacci extension of the down leg from 144.94 until 124.00 and the latter the more than five-year high.

If sellers resurface and drive the price downwards, prompt support could emanate from the 50-day SMA currently inline with the Ichimoku cloud’s lower band at 153.59. Dipping back beneath the cloud, a zone of support may develop between the 100- and 200-day SMAs at 152.70 and 152.34 respectively. Should these averages fail to act as an upside defence, the price could then dive towards the 150.80 low, while a deeper decline could challenge the base of 148.51-149.41.

Summarizing, GBPJPY is gaining buoyancy above the cloud and the SMAs. That said, price improvements are not yet severe enough to eliminate the doubt surrounding the bullish action in the pair.

UK retail sales grew 0.8% mom in October, above expectation of 0.5% mom. Ex-fuel sales jumped 1.6% mom, above expectation of 0.2% mom.

However, over the three months to October, sales volumes dropped -2.3% when compared with the previous three months. Compared with the same period a year earlier, sales volumes over the last three months dropped -0.5%.

Retail sales values, unadjusted for price changes, rose by 1.6% in October 2021, following an increase of 0.2% in September. Over the last three months to October 2021, the value of sales was up 3.3% on the same period a year earlier, reflecting an annual retail sales implied price deflator of 3.8%.

Full release here.

The Euro started a fresh decline below the 1.1400 support against the US Dollar. The EUR/USD pair traded below the 1.1320 support to move into a bearish zone.

The pair even settled below the 1.1400 level and the 50 hourly simple moving average. A low is formed near 1.1268 and is currently correcting losses. It is back above 1.1320. There is also a key bullish trend line forming with support near 1.1345 on the hourly chart.

An immediate resistance near the 1.1375 level. A break above the 1.1375 and 1.1400 resistance levels could lead the pair towards the 1.1450 zone.

On the downside, an initial support is near 1.1340 on FXOpen. The key support is near 1.1320, below which there is a risk of a fresh decline. The next major support is near the 1.1280 level.