EUR/USD, GBP/USD, USD/JPY Analysis: US Dollar Weakens after Fed Chairman's Comments

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Today, investors are assessing the speech of US Federal Reserve Chairman Jerome Powell, who indicated that the interest rate is currently at a restrictive level, but the regulator allows for the possibility of another increase if necessary. The manufacturing business activity index from S&P Global in the US remained at 49.4 points, which coincided with analysts' forecasts, and the same indicator from the Institute for Supply Management (ISM) remained at 46.7 points, contrary to forecasts for growth to 47.6 points. The manufacturing index of gradual acceleration of inflation from the ISM in November sharply increased from 45.1 points to 49.9 points, while experts expected 46.2 points. In the US today, statistics on the volume of manufacturing orders will be presented: in October, the figure may lose 2.5% after growing by 2.8% in the previous month.

EUR/USD

The EUR/USD pair is showing a moderate decline. According to the EUR/USD technical analysis, the euro is testing the 1.0870 level for a breakdown downwards, but activity on the market remains restrained. Investors today are watching publications from Germany, where exports in October adjusted from -2.5% to 0.2%, and imports from -1.9% to -1.2%, while the trade surplus widened from 16.7 billion euros to 17.0 billion euros, signaling the recovery of the national economy, despite the long-term hawkish course of the ECB. In addition, representatives of the European regulator, as well as its head Christine Lagarde, are expected to speak during the day. Officials may refine their plans for the monetary policy outlook given that inflation continues to show fairly consistent signs of decline.

Immediate resistance can be seen at 1.0892, a break higher could trigger a rise towards 1.0977. On the downside, immediate support is seen at 1.0822, a break below could take the pair towards 1.0758.

Based on last week's lows, a new downward channel has formed. Now, the price is in the middle of the channel and may continue to decline after approaching the upper border of the channel.

GBP/USD

The GBP/USD pair is retreating from local highs, while trading participants evaluate Friday's publications from the US and UK. Thus, the index of business activity in the manufacturing sector from S&P Global in the UK in November rose from 46.7 points to 47.2 points, while analysts expected 46.6 points.

Immediate resistance can be seen at 1.2712, a break higher could trigger a rise towards 1.2742. On the downside, immediate support is seen at 1.2667, a break below could take the pair towards 1.2620.

The same trading range with boundaries of 1.2600 and 1.2730 remains. Now, the price has moved away from the upper limit of the range and may continue to decline.

USD/JPY

The USD/JPY pair remains almost unchanged, remaining close to 146.80 and local lows from September 11. The US currency is under pressure after US Federal Reserve Chairman Jerome Powell's speech on Friday. In turn, the Japanese manufacturing business activity index from Jibun Bank corrected from 48.1 points to 48.3 points in November, which turned out to be better than neutral forecasts.

Strong resistance can be seen at 147.82, a break higher could trigger a rise towards 148.58. On the downside, immediate support is seen at 146.68. A break below could take the pair towards 145.25.

Based on the lows of two days of last week, a new downward channel has formed. Now, the price has moved away from the lower border of the channel and may continue to rise.

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