GBP/USD Regains Strength While USD/CAD Weakens

GBP/USD started a fresh increase above the 1.2370 zone. USD/CAD is declining and trading below the 1.3730 support.

Important Takeaways for GBP/USD and USD/CAD Analysis Today

• The British Pound is eyeing a fresh increase above the 1.2500 resistance.

• There was a break above a key bearish trend line with resistance near 1.2430 on the hourly chart of GBP/USD at FXOpen.

• USD/CAD started a fresh decline after it broke the 1.3840 resistance.

• There was a break below a major bullish trend line with support near 1.3730 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair formed a base above the 1.2185 level. The British Pound started a decent increase above the 1.2250 resistance zone against the US Dollar.

The pair gained strength above the 1.2300 level. The bulls even pushed the pair above the 1.2370 level and the 50-hour simple moving average and 1.2120. The pair cleared the 50% Fib retracement level of the downward move from the 1.2505 swing high to the 1.2373 low.

There was a break above a key bearish trend line with resistance near 1.2430. It is now trading above the 76.4% Fib retracement level of the downward move from the 1.2505 swing high to the 1.2373 low.

The RSI moved above the 65 level on the GBP/USD chart and the pair is now approaching a major hurdle at 1.2500. An upside break above the 1.2500 zone could send the pair toward 1.2550. Any more gains might open the doors for a test of 1.2620.

On the downside, the pair might find support near the 50-hour simple moving average at 1.2430. The next major support is 1.2370.

If there is a break below 1.2370, the pair could extend the decline. The next key support is near the 1.2300 level. Any more losses might call for a test of the 1.2185 support.

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Federal Reserve's 2024 Interest Rate Outlook: A Measured Descent Expected

In the ever-watchful eyes of the financial world, the Federal Reserve's stance on interest rates in 2024 takes centre stage. While market expectations align with a gradual decrease in rates, the nuances in projections and potential economic scenarios add layers of complexity to the narrative.

As of now, the Fed Funds target rate stands at 5.25% to 5.5%. According to the CME FedWatch Tool, a reliable measure of debt market expectations, there is an anticipation of approximately a 1% reduction in this rate by the close of 2024. This implies a plausible range for short-term rates between 4% and 5% in December 2024.

Interestingly, the Federal Reserve's own projections, disclosed on September 20, paint a slightly more hawkish picture compared to the market consensus. These projections hint at rates potentially residing in the 4.5% to 5.5% range by December 2024. The upcoming interest rate decision on December 1 will provide an opportune moment for Fed policymakers to revisit and update these projections.

Throughout 2024, the Federal Reserve is scheduled to conduct eight meetings to deliberate on interest rates, with the flexibility to adjust monetary policy based on economic developments. While the Fed has emphasised the possibility of rates moving upward, this is now framed as a contingent scenario dependent on specific economic conditions rather than the primary trajectory.

The key dates for interest rate decisions and policy announcements in 2024 include March, June, September, and December. The Federal Reserve will unveil its decisions through written statements at 2 pm E.T., accompanied by a subsequent press conference. Detailed minutes of each meeting will be released three weeks later.

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FTSE 100 Volatility Alongside BoE Interest Rate Commentary

In a week marked by market undulations and anticipation of pivotal fiscal policy updates from the British government, the FTSE 100 opened on a cautious note. Ashtead Group, a prominent equipment rental firm, set a sombre tone for the week as its shares plummeted on a downbeat annual profit outlook. Investors, meanwhile, remained on the edge of their seats, eagerly awaiting insights into the evolving fiscal landscape and potential policy shifts in Parliament.

As the week unfolded, the FTSE 100 experienced a delicate dance of gains and losses. Amid this volatility, the index slipped by 0.1% by 09:53 GMT on Monday. The sterling, however, exhibited resilience, strengthening by 0.2% against the dollar. Notably, the FTSE 100 demonstrated resilience as the week progressed, showcasing the index's capacity to rebound from initial setbacks.

Looking at the five-day moving average reveals a dynamic trajectory for the FTSE 100. With a peak at 7,530 last Wednesday, the index showcased its inherent capacity for fluctuation. What distinguishes the FTSE 100's volatility is its composition—comprising long-established global corporations rather than the tech-centric profile of indices like the US NASDAQ. These blue-chip stocks, some over a century old, provide a stable yet responsive foundation for market movements.

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Brent Crude Surges to $82.51 Amid OPEC+ Anticipation

Brent crude oil reached $82.51 per barrel by 8:00 am UK time today, reflecting heightened anticipation ahead of the upcoming OPEC+ meeting scheduled for November 26.

From the end of the last week, oil prices have exhibited a gradual upward trend as market participants brace for potential decisions from the OPEC+ alliance. Speculation is rife regarding the course of action OPEC+ may adopt, with indications pointing toward a potential extension of supply cuts into early 2024. Both Saudi Arabia and Russia, major players in the oil market, are reportedly leaning towards maintaining their voluntary reduction in supply.

While the anticipation centres around these key players, there is also speculation that the broader OPEC+ coalition may collectively consider further supply cuts. Should this materialise, coupled with the extension of voluntary cuts by Saudi Arabia and Russia, it could effectively eradicate the surplus expected in the first quarter of 2024.

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EUR/USD, GBP/USD, and USD/JPY Analysis: US Dollar Falls to a Two-Month Low

American dollar quotes continue their local correction, the US dollar index is trading at 103.400 against the backdrop of weak statistics on the real estate market: sales volumes on the secondary housing market in October decreased by 4.1% after -2.2% in the previous month, from 3.95 million to 3.79 million, below preliminary estimates of 3.90 million. Investors hardly reacted to the published minutes of the US Federal Reserve meeting. Members of the Open Market Committee noted that they expect the value to remain at a high level for quite a long time. In addition, the regulator does not exclude the possibility of further tightening of monetary conditions if the rate of decline in inflation continues to slow down. Macroeconomic statistics published the day before put moderate pressure on the position of the American currency.

EUR/USD

According to the EUR/USD technical analysis, the EUR/USD pair is showing mixed trading, consolidating near the 1.0900 mark, awaiting the emergence of new drivers in the market. The immediate resistance can be seen at 1.0985, a breakout to the upside could trigger a rise towards 1.1000. On the downside, immediate support is seen at 1.0900, a break below could take the pair towards 1.0883.

The day before, the pair managed to move away from the new local highs of August 11, forming a new impulse for the development of a full-fledged corrective trend in the nearest time intervals. The day before, ECB head Christine Lagarde made a speech, warning against prematurely declaring victory over high inflation. According to her, the department will closely monitor the situation until the consumer price index decreases to the target of 2.0%, which it is projected to reach in 2025. At the same time, Lagarde also pointed to the rather tense situation in the labour market, where there is still a noticeable increase in wages. Earlier this week, the head of the Bank of France and ECB member François Villeroy de Galhau said that interest rates in the eurozone had reached a plateau, where they were likely to remain for several more quarters while officials assessed the effect of measures already taken.

At the highs of the week, a new ascending channel has formed. Now, the price is near the lower border of the channel and may continue to decline if it breaks through.

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The Price of WTI Oil Forming a Reversal Pattern

In our analysis of the price of WTI oil dated November 8, we wrote that the price could recover to the level of USD 80 per barrel.

After the price failed to reach the round level of USD 80 by only 36 cents (the median line of the descending channel prevented this from happening) on November 14, the bears again seized the initiative. The result of their pressure was a reduction in the price to a new autumn low on November 14 at the level of USD 73 per barrel, after which the price recovered again to the median line.

A new attempt by the bears to push the price down from the median line occurred on November 22, but note how quickly the price of oil recovered after falling below USD 75 per barrel. This is evidence of bull aggression and the strength of demand.

At the same time, the price forms an inverted head-and-shoulders reversal pattern, as a result of which a bullish breakdown of the current descending channel may occur, although if this event occurs, it is unlikely in the near future, since first the bulls need to overcome the resistance from the median line. Also, the bulls will have psychological resistance at USD 80 and, possibly, the SMA (100), directed downwards.

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USD/CAD, AUD/USD, EUR/USD Analysis: Commodity Currencies and Euro Poised to Resume Growth

After the publication of the FOMC protocols on Tuesday, the dollar managed to partially regain its lost positions. Thus, in the dollar/yen pair one could observe a corrective pullback to figure 149, the US dollar/canadian dollar pair almost tested 1.3800, and the AUD/USD pair tested the important level of 0.6500, but as support. European currencies also retreated from previously reached highs. However, US dollar buyers have not yet been able to develop a full-fledged upward movement, and yesterday evening the main trends established in early November continued in many pairs.
USD/CAD

In the USD to CAD chart, we are seeing a rebound from the resistance located at the alligator lines on the daily timeframe. The pair continues to work out the reversal bearish combination from November 1st. With the appropriate foundation, a breakdown of the lower fractal at 1.3650 is possible and the pair may continue to decline in the direction of 1.3500-1.3400. We may consider canceling the downward scenario if the pair confidently consolidates above 1.3800.

Today at 16:30 GMT+3, we are waiting for data on wholesale sales and corporate income in Canada for the current quarter. The core Canadian retail sales index for September will be released at this time tomorrow.

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Gold Price Dips From $2K While Crude Oil Price Recovers

Gold price surged toward the $2,000 zone before the bears appeared. Crude oil price is attempting a recovery wave above the $75.00 zone.

Important Takeaways for Gold and Oil Prices Analysis Today

• Gold price started a steady increase from the $1,965 zone against the US Dollar.

• A key bearish trend line is forming with resistance at $1,995 on the hourly chart of gold at FXOpen.

• Crude oil prices started a decent recovery wave from the $73.80 support.

• There is a connecting bearish trend line forming with resistance near $77.00 on the hourly chart of XTI/USD at FXOpen.

Gold Price Technical Analysis

On the hourly chart of Gold at FXOpen, the price found support near the $1,965 zone. The price remained in a bullish zone and started a strong increase above $1,985.

There was a decent move above the 50-hour simple moving average. The bulls pushed the price above the $1,985 and $1,995 resistance levels. Finally, the price tested the $2,005 zone before the bears appeared.

There was a minor downside correction below $2,000 and the RSI dipped below 50. There was a move below the 23.6% Fib retracement level of the upward move from the $1,965 swing low to the $2,007 high.

Initial support on the downside is near the 50% Fib retracement level of the upward move from the $1,965 swing low to the $2,007 high at $1,985. The first major support is near the $1,975 zone.

If there is a downside break below the $1,975 support, the price might decline further. In the stated case, the price might drop toward the $1,965 support.

Immediate resistance is near a key bearish trend line at $1,995 and the 50-hour simple moving average. The next major resistance is near the $2,005 level. An upside break above the $2,005 resistance could send Gold price toward $2,020. Any more gains may perhaps set the pace for an increase toward the $2,032 level.

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GBP/USD Rallies While EUR/GBP Slides Below Support

GBP/USD is gaining pace above the 1.2575 resistance. EUR/GBP declined heavily below the 0.8720 and 0.8695 support levels.

Important Takeaways for GBP/USD and EUR/GBP Analysis Today

• The British Pound is attempting a fresh increase above 1.2600.

• There is a key bullish trend line forming with support near 1.2575 on the hourly chart of GBP/USD at FXOpen.

• EUR/GBP is trading in a bearish zone below the 0.8720 pivot level.

• There is a major bearish trend line forming with resistance near 0.8695 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair remained well-bid above the 1.2450 level. As mentioned in the previous analysis, the British Pound started a decent increase above the 1.2500 zone against the US Dollar.

The bulls were able to push the pair above the 50-hour simple moving average and 1.2530. The pair even climbed above 1.2575 and traded as high as 1.2615. It is now consolidating gains above the 23.6% Fib retracement level of the upward move from the 1.2449 swing low to the 1.2615 high.

On the upside, the GBP/USD chart indicates that the pair is facing resistance near 1.2615. The next major resistance is near 1.2640.

A close above the 1.2640 resistance zone could open the doors for a move toward 1.2700. Any more gains might send GBP/USD toward 1.2740.

On the downside, there is a key support forming near a bullish trend line at 1.2575. If there is a downside break below 1.2575, the pair could accelerate lower. The next major support is near the 50% Fib retracement level of the upward move from the 1.2449 swing low to the 1.2615 high at 1.2530.

The next key support is seen near 1.2510, below which the pair could test 1.2450. Any more losses could lead the pair toward the 1.2370 support.

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Australian Dollar Reaches Its Highest Since Early August

Important events regarding AUD took place this morning:
→ the level of retail sales for the month in Australia unexpectedly fell: actual = -0.2%, expected = +0.1%, a month earlier = +0.9%.
→ a press conference was held by the head of the RBA, Michelle Bullock, according to whom inflation in Australia follows the path of overseas countries. That is, inflation is decreasing, as in the USA and Great Britain.

Against the background of these events, the AUD/USD rate exceeded the level of 0.663 for the first time since the beginning of August. The rally from the late October low is already about 5.5%. However, this upward trend has 3 important obstacles:

    The upper limit of the November ascending channel (shown in blue).
    The upper limit of the longer-term parallel channel (shown in red).
    Level 0.660. During 2023, it worked as support once. Therefore, from the point of view of technical analysis, there is reason to expect that it will provide resistance.

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USD/JPY, GBP/USD, and EUR/USD Market Analysis: The US Dollar Continues to Fall

The downward movement in the American currency, which began at the end of October, resumed with renewed vigour at the beginning of the current five-day trading period.

Thus, the euro/US dollar pair is consolidating at 1.0900, the pound/US dollar pair has confidently strengthened above 1.2600, and USD/JPY sellers have broken through the resistance at 149. Nevertheless, the coming trading sessions are quite saturated with the fundamentals, so it is possible to see both the strengthening of existing trends and the beginning of corrective pullbacks from the main movements.

USD/JPY

The cooling of the US labour market and lower inflation are contributing to increased bearish sentiment on the dollar. More and more market participants are becoming confident that the most aggressive rate-tightening cycle of the last couple of decades is behind us, and the Fed could cut its benchmark interest rate as soon as the first quarter of 2024. On the contrary, the Bank of Japan has been adhering to a policy of ultra-low interest rates for a long time, and if it decides to change the current vector of monetary policy, the dollar/yen pair may suffer significant losses.

Last week, on the USD/JPY chart, the pair almost tested a significant support level at 147.00. Greenback buyers managed to correct to 149.70, but yesterday evening the pair was trading below 149.00.

Today we are waiting for data on the US consumer confidence index from CB for November. Analysts expect a decline in the indicator, which may contribute to a retest of 147.00. We could consider cancelling the downward scenario only after a confident strengthening above 150.00.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.