The Analytical Overview of the Main Currency Pairs on 2022.09.14

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0121
• Prev. Close: 0.9968
• % chg. over the last day: -1.53%

Germany’s Consumer Price Index showed 7.9% YoY after 7.5% in July. Inflation has been above 7% for more than six months. The main reason for the high inflation is still an increase in energy and food prices. The annualized inflation rate in Spain has declined from 10.7% to 10.5%. The US Consumer Price Index increased by 0.1% last month, with core inflation up to 0.6%, against expectations of 0.3%. Thus, US inflation showed no signs of slowing, which caused a sharp flow of money into the dollar index, on expectations that the US Federal Reserve will continue to raise interest rates aggressively.

Trading recommendations

• Support levels: 0.9971,0.9912.
• Resistance levels: 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 bullish. But the price formed a false breakout zone above the level of 1.0111 and returned to the wide range. The MACD indicator became negative, and the sellers’ pressure intensified. Under such market conditions, it is best to look for buy trades on intraday time frames from the support level of 0.9971, but with confirmation. Sell trades can be considered from resistance levels of 1.0111 or 1.0162.

Alternative scenario:

if the price breaks down through the support level of 0.9912 and fixes below, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1676
• Prev. Close: 1.1491
• % chg. over the last day: -1.61%

UK labor market data showed that average payrolls, including bonuses, rose from 5.2% to 5.5%, jobless claims increased by 6,300, and the unemployment rate fell from 3.8% to 3.6%. Total UK jobs rose by 290,000 for the quarter to a record 35.8 million, exceeding the December 2019 pre-coronavirus level for the first time. Thus, the UK labor market remains strong, opening room for the Bank of England to be more aggressive. The question is whether the Bank of England will act more aggressively under a new prime minister.

Trading recommendations

• Support levels: 1.1503,1.1449,1.1400
• Resistance levels: 1.1627,1.1693,1.1816,1.1901,1.1994,1.2035,1.2167

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. At the moment, the price is trading below the moving averages again, and the MACD indicator is in the negative zone. Buy trades can be considered from the support level of 1.1503, but only with confirmation. Sell trades are best to look for on intraday time frames, and the nearest resistance level is 1.1627 and 1.1693.

Alternative scenario:

if the price breaks down the support level of 1.1449 and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 142.82
• Prev. Close: 144.52
• % chg. over the last day: +1.19%

The situation on the USD/JPY currency pair remains the same. Japan’s Central Bank keeps interest rates ultra-low and its monetary policy ultra-soft, while the US Federal Reserve is in a cycle of monetary tightening, raising interest rates, and reducing the balance sheet. This divergent policy has already sent the USD/JPY quotes to a 24-year high. Analysts expect the quotes will continue to rise as no changes are expected in the near term.

Trading recommendations

• Support levels: 142.86,141.77,141.00,139.61,138.78,137.65,136.80,135.20
• Resistance levels: 145.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading at the level of moving averages. The MACD indicator has become positive, but the buyers’ pressure remains. Under such market conditions, buy trades can be sought from the support level of 142.86, but with additional confirmation. Sell deals can be considered on the intraday time frames from the level of 145.00, but only with additional confirmation, as fundamentally, USD/JPY quotes are inclined to growth.

Alternative scenario:

If the price fixes below 141.00, the downtrend will likely resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2976
• Prev. Close: 1.3173
• % chg. over the last day: +1.52%

Macroeconomic forecasts continue to reflect a relatively higher growth rate in Canada compared to the US this year and next year. Analysts expect the Bank of Canada rate to peak at 3.75% this year, slightly higher than the (revised) forecast of 3.5%. The USD/CAD exchange rate is forecast at 1.30 at the end of the year and 1.25 at the end of next year.

Trading recommendations

• Support levels: 1.3053,1.2990,1.2958,1.2936,1.2900
• Resistance levels: 1.3169,1.3220

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is trading above the moving averages, the MACD indicator is in the positive zone, and signs of bullish pressure remain. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3053 after the pullback, as the price has strongly deviated from the averages. For sell deals, it is best to consider the resistance level of 1.3169 or 1.3220, but only after the additional confirmation.

Alternative scenario:

if the price breaks down and consolidates below the 1.2990 support level, the downtrend will likely resume.