The Analytical Overview of the Main Currency Pairs on 2022.10.03

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 0.9817
• Prev. Close: 0.9795
• % chg. over the last day: +0.25%

For the first time in history, inflation in the Eurozone reached a double-digit number. It jumped to a record 10% (9.1% in August) on an annualized basis in September. The core inflation rate (excluding food and fuel prices) reached 4.8% (4.3% in August). The biggest surprise came in Germany, where overall inflation accelerated from 8.8% to 10.9%. Thus, of the big four eurozone economies, Germany is now the country with the highest inflation. The energy sector continues to be the biggest source of inflation. Even though oil prices have fallen, high market prices for gas and electricity continue to be reflected in consumer prices. Extremely high inflation figures mean the ECB will continue aggressively raising rates in upcoming meetings.

Trading recommendations

• Support levels: 0.9666,0.9601
• Resistance levels: 0.9808,0.9864,0.9951,1.0111,1.0162,1.0230

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish, but the price has approached the priority change level. The MACD indicator is in the positive area, but the buyers’ pressure is weakening. It is best to look for sell deals from the resistance level of 0.9808 or 0.9864. Buy trades can be considered from the support level of 0.9666 or 0.9601, but only with confirmation.

Alternative scenario:

if the price breaks out through the resistance level of 0.9808 and fixes above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1114
• Prev. Close: 1.1160
• % chg. over the last day: +0.41%

The Bank of England set the maximum amount it can buy each business day at 5 billion pounds, which means it can buy up to 65 billion pounds during the next two weeks. Analysts believe that the Bank of England has put a lot of pressure on itself by setting exact dates for the end of this temporary quantitative easing and the beginning of the quantitative easing operation. Thus, experts believe that the British pound will return to the declining phase at the end of the period (October 14).

Trading recommendations

• Support levels: 1.0915,1.0816,1.0711,1.03
• Resistance levels: 1.1210,1.1449,1.1626,1.1693,1.1816,1.1901

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. But the price has approached the priority change level. The MACD indicator remains positive, but buyer pressure is decreasing. Under such market conditions, sell trades are best to look for on intraday time frames, the nearest resistance level is 1.1210, which is the priority change level. Buy trades can be considered from the support level of 1.0915 or 1.0816, but only with confirmation and short targets.

Alternative scenario:

if the price breaks out of the 1.1210 resistance level and fixes above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 144.43
• Prev. Close: 144.73
• % chg. over the last day: +0.21%

Stronger-than-expected industrial production and good labor market data suggest that Japan’s economy continues to recover this quarter. Further easing restrictions and the resumption of domestic traveler assistance programs will also support growth in the next quarter. Experts raised Japan’s 2022 GDP growth forecast to 1.6% from 1.2% annualized. Japan is recovering slower than other Asian economies, and the reopening effect is just starting to show, which should be a major factor in the positive outlook for the year’s second half. However, as the headwind of the global recession grows, the Bank of Japan is in no hurry to change its soft monetary policy.

Trading recommendations

• Support levels: 143.00,140.60,139.61,138.78,137.65,136.80,135.20
• Resistance levels: 145.35

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The MACD indicator has become inactive, the price is trading at the level of the moving averages. Under such market conditions, buy trades can be sought on intraday time frames from the support level of 143, but with confirmation. Sell deals can be sought from the resistance level of 145.35, but only with additional confirmation.

Alternative scenario:

If the price fixes below 140.60, the downtrend will likely resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3672
• Prev. Close: 1.3829
• % chg. over the last day: +1.15%

The Canadian dollar is a commodity currency, so it is highly correlated with instruments like the dollar Index and oil. On Friday, oil prices were down, while the dollar Index was slightly stronger. As a result, the USD/CAD quotes are updated 2-year-high. However, investors should keep in mind that the Bank of Canada keeps one of the highest interest rates, so the Canadian dollar may start to strengthen at any time.

Trading recommendations

• Support levels: 1.3675,1.3545,1.3453,1.3297,1.3212,1.3053,1.2990,1.2958
• Resistance levels: 1.3858,1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The MACD indicator is in the positive zone, but the price is trading between the moving average lines. Under such market conditions, buy trades should be considered on the lower time frames from the support level 1.3675, but with confirmation. For sell deals, it is best to consider the resistance level of 1.3858, but only after the additional confirmation.

Alternative scenario:

if the price breaks down and consolidates below the 1.3545 support level, the downtrend will likely resume.