The Analytical Overview of the Main Currency Pairs on 2023.03.17

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0578
• Prev. Close: 1.0612
• % chg. over the last day: +0.32%

The ECB raised its interest rate by 50 bps to 3.5% and will start cutting its bonds portfolio by 15 billion euros a month. However, the bank excluded any mention of further interest rate hikes from its statement, a significant change from its previous hawkish announcement. That came in a week when global financial markets were rocked by the collapse of three mid-sized US banks and concerns about the viability of Swiss bank Credit Suisse. Credit Suisse overnight received a $54 billion bailout and a vote of confidence from the Swiss National Bank. The statement also said that the ECB’s governing council is closely monitoring current market tensions and is ready to respond as needed to maintain price stability and financial stability.

Trading recommendations

• Support levels: 1.0606,1.0572,1.0541,1.0519,1.0482
• Resistance levels: 1.0649,1.0679,1.0725,1.0804,1.0906

The trend on the EUR/USD currency pair on the hourly time frame is still bullish. The price is trading above the moving averages, and now it is important to pass the premium zone (50-70% of Fibonacci from the last wave) to maintain the uptrend. The MACD indicator has become positive, and there is buying pressure inside the day. Buy trades are best considered from the support level of 1.0606, but with confirmation inside the day. Sell deals can be considered from the resistance level of 1.0649 or 1.0679, provided that there is a reverse reaction.

Alternative scenario:

if the price breaks down through the support level of 1.0519 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2048
• Prev. Close: 1.2107
• % chg. over the last day: +0.49%

The transfer of bank fears from the US to Europe triggered a large-scale shedding of risky assets in recent days. But after the Credit Suisse banking group in Europe received 50 billion Swiss francs from the Swiss National Bank to shore up its balance sheet, and in the US, a group of major banks gave $30 billion in deposits to First Republic Bank, the financial markets calmed down. The US dollar fell yesterday, allowing a number of currencies, including the British pound, to move higher. Next week will be an important week for the British currency as the Fed will hold its interest rate meeting on March 22, and the Bank of England will meet on March 23.

Trading recommendations

• Support levels: 1.2112,1.2009,1.1963,1.1929,1.1843
• Resistance levels: 1.2155,1.2203,1.2267

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The MACD indicator returned to the positive zone, and there is a slight buying pressure inside the day. Buy trades are better to look for after the correction to the moving averages from the support level of 1.2112. Sell deals are best to look for from the resistance level of 1.2155, but with confirmation, as the probability of a liquidity test above 1.2203 is very high.

Alternative scenario:

if the price breaks down through the 1.1843 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 133.31
• Prev. Close: 133.57
• % chg. over the last day: +0.19%

The attractiveness of the Japanese yen as a safe haven has recently supported demand for the currency, which has led to a decrease in the USD/JPY quotes. The US Treasury yields have fallen in recent days, and safe haven currencies, including the JPY and CHF, have risen after the biggest bank failure since 2008. The US Federal Reserve will meet next week on monetary policy, where they will likely decide to raise the rate by 0.25%. And if this rate hike is the last one, markets may take it as a positive signal, which will restore confidence in risky assets. The Japanese yen could benefit even more from this.

Trading recommendations

• Support levels: 132.27,131.43
• Resistance levels: 133.78,135.11,136.08,137.91,138.15,138.88

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The MACD indicator has become inactive. The price is trading at the level of the moving averages. Under such market conditions, it is best to look for buy trades from the support level of 132.27, but only with a confirmation in the form of a false breakdown since the level has already been tested. Sell deals can be sought from the resistance level of 133.78, but also with an additional confirmation in the form of a false reverse breakout

Alternative scenario:

if the price fixes above the 136.08 resistance level, the uptrend will be resumed with a high probability.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3761
• Prev. Close: 1.3719
• % chg. over the last day: -0.31%

Oil prices rebounded slightly on Thursday and Friday due to the prospect of OPEC+ support measures, although concerns over slowing economic growth caused by the banking crisis limited gains and led to the worst week of the year. The OPEC+ ministers will meet this week to discuss what the Organization of Petroleum Exporting Countries and its allies can do to support crude markets. The Canadian dollar is a commodity currency, so it is sensitive to oil price movements. If the OPEC+ countries agree to cut production, it could give the oil a boost of confidence, which would have a positive effect on the Canadian dollar as well.

Trading recommendations

• Support levels: 1.3650,1.3590,1.3515
• Resistance levels: 1.3712,1.3786,1.3811,1.3862

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. But now, the price is trading below the moving averages, and the MACD indicator is negative again. This indicates a certain strength of the sellers. Under such market conditions, buy trades should be sought after the price returns below the level of 1.3712 or after a liquidity test below 1.3650. Sell deals can be searched for from the resistance level of 1.3786, but only with short targets and after the confirmation in the form of a false break.

Alternative scenario:

if the price breaks down and consolidates below the support level of 1.3664, the downtrend will likely resume.