November 22nd Foreign Exchange Market Watching: FX678, a technical analysis provider for Euro, British Pound and Australian Dollar

Currency: EUR/USD

Resistance 2: 1.1450

Resistance 1: 1.1370

Spot price: 1.1282

Support 1: 1.150

Support 2: 1.1200

As the new crown epidemic is sweeping across Europe, the market is seeking a safer haven and remains weak. With the surge in new coronavirus cases in Europe, the market is also increasingly expecting that compared with other central banks, the European Central Bank will lag behind in raising interest rates. For this reason, the euro/dollar hit a 16-month low of 1.1251 last Friday. The daily chart shows that the relative strength indicator retreated to 30 after a technical rebound on Thursday, showing an oversold condition. If the euro/dollar rebounds again, it may encounter resistance at 1.1370, 1.1450 (psychological level) and 1.1500 (20-day moving average). Unless the 1.1500 reversal becomes support, the euro/dollar will maintain its bearish trend in the near term. On the downside, 1.1250 (2021 low) became the first support, then 1.1200 (psychological level), and then 1.1140 (previous resistance).

Currency: GBP/USD

Resistance 2: 1.3600

Resistance 1: 1.3500

Spot price: 1.3453

Support 1: 1.3400

Support 2: 1.3350

The UK November GfK Consumer Confidence Index released last Friday rose to minus 14 from minus 17 in October, marking the first rise in four months. October hit the lowest level since the anti-epidemic blockade was implemented in early 2021. Analysts had expected the index to deteriorate further to minus 18 this month. Breaking above the resistance level of 1.3500 and trying to move up further, but trying to gain upward mobility, moving towards the resistance level of 95.75, which continued to suppress the high performance of the pound, and finally had to fall back to the low level. At present, the strength of the US dollar has not been exhausted, and the momentum of the pound’s rise is still insufficient. On the daily chart, the pound and the US can only break through 1.35 before they can push it higher. On the support level, the most recent support level for GBP/USD is at 1.3400. If the GBP/USD falls below this level, the next support level will be 1.3353, the previous week’s low.

Currency: AUD/USD

Resistance 2: 0.7348

Resistance 1: 0.7316

Spot price: 0.7234

Support 1: 0.7171

Support 2: 0.7106

Long and short fell into a tug of war on Friday. With the US dollar index finally stagnating, the Australian dollar is dominated by consolidation. The market is still in a “sell on rallies” mode, which may put pressure on the Australian dollar. At the same time, market participants are again optimistic about the RBA’s interest rate hike report. However, the central bank’s policymakers have been reminding investors that the long-awaited rate hike will not be announced soon. Therefore, the recent Australian dollar against the US dollar has been in a volatile downward trend pattern. On the daily chart, if it fails to maintain the 0.7250 level, the next target of the Australian dollar against the US dollar will be the September 29 low of 0.7171 and the August low of 0.7106. The initial resistance is located at 0.7348, the 55-day moving average, and then at 0.7430, the November 9 high. Breaking through the latter is expected to challenge the September 3 high of 0.7477. In general, as long as the AUD/USD stays below 0.7534/77 (200-day moving average, October high and 7-month downtrend line), the bearish pressure will remain intact for a certain period of time.

Only personal views, not representative of the views of the organization

Source: Bank of China’s official website, Bank of China Guangdong Branch Wang Gang, original title: “Foreign Exchange Market Watch November 22, 2021”