The Analytical Overview of the Main Currency Pairs on 2022.12.29

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0638
• Prev. Close: 1.0611
• % chg. over the last day: -0.25%

Inflation in the Eurozone lags Lithuanian inflation by half a year, which means that its peak is still to come. This is the opinion of the representative of the European Central Bank (ECB) Governing Council, Gediminas Simkus. The main risk comes from the energy crisis amid falling temperatures in winter. If Europe manages to pass this winter without considerable problems in the energy system, it is possible to say with certainty that the inflation peak has already passed this spring.

Trading recommendations

• Support levels: 1.0586,1.0483,1.0361,1.0332,1.0284,1.0193
• Resistance levels: 1.0654,1.0667,1.0695

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is forming a price corridor. The price is forming a wide price corridor, and the volatility is reducing in anticipation of the holidays. The MACD indicator has become inactive, but there is a slight selling pressure. Under such market conditions, buy trades are best considered from support levels on intraday time frames, but with additional confirmation. Sell deals can be considered from the resistance level of 1.0654 or 1.0667, but better with a confirmation in the form of a reverse initiative or a false breakout because the level has already been tested.

Alternative scenario:

if the price breaks down through the support level of 1.0549 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2024
• Prev. Close: 1.2018
• % chg. over the last day: -0.05%

The situation on the GBP/USD currency pair has not changed compared to the previous day. Volatility remains below average in the run-up to the New Year holidays. Fundamental factors for the British pound are extremely weak now, so there are no prerequisites for growth. Traders should not expect significant changes in the price till the end of the year.

Trading recommendations

• Support levels: 1.1999,1.1979,1.1684,1.1476,1.1418
• Resistance levels: 1.2062,1.2218,1.2308,1.2431,1.2519

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The MACD indicator became inactive, and the price formed a narrow price corridor. Under such market conditions, it is better to look for buy deals from the support level of 1.1999 or 1.1979, but with confirmation on intraday time frames. Sell trades are best sought from the resistance level of 1.2062 but also better with confirmation.

Alternative scenario:

if the price breaks out through the 1.2308 resistance level and fixes above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 133.35
• Prev. Close: 134.47
• % chg. over the last day: +0.83%

Japan’s industrial production index declined for the third consecutive month. Recent economic data, including exports, retail sales, and industrial production, signal that Japan’s economy is still very fragile and thus supports the Bank of Japan’s view that monetary policy easing should continue. At the moment, JPY does not have any fundamental support, so weak economic data and interest rate differentials between BoJ and FOMC will have a negative impact on JPY.

Trading recommendations

• Support levels: 133.75,132.68,132.27,131.22
• Resistance levels: 134.45,135.88,137.03,138.00,139.09

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The price is now trading above the moving averages, while the MACD indicator has become inactive. There is some buying pressure inside the day. Buy trades are best considered on intraday time frames from a support level of 133.75 or 132.68, but only with confirmation. Sell deals can be looked for from the resistance level of 134.45, provided there is a reverse reaction.

Alternative scenario:

If the price fixes above 137.00, the uptrend will likely resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3514
• Prev. Close: 1.3604
• % chg. over the last day: +0.67%

No economic events and data about Canada are expected before the end of the year, so the Canadian dollar these days will be completely dependent on the dynamics of the dollar index and oil prices, as Canadian is a commodity currency. Oil prices fell on Wednesday, as well as the likelihood that the easing of pandemic restrictions in China will increase demand for fuel. With the dollar rising, USD/CAD quotes jumped yesterday. The US crude oil inventories will be released today, which will add volatility to the currency pair.

Trading recommendations

• Support levels: 1.3529,1.3438,1.3386,1.3360,1.3281,1.3212
• Resistance levels: 1.3614,1.3656,1.3700,1.3776,1.3855

From the point of view of technical analysis, the uptrend trend on the USD/CAD currency pair is still bullish. The price failed to consolidate below the priority level and is trading above the moving averages. The MACD indicator is in the positive zone, and buyers prevail inside the day. Buy trades should be considered from the support level 1.3529, but with confirmation. Sell deals are best to look for on intraday time frames from the resistance level of 1.3614, but with confirmation in the form of reverse initiative on the lower time frames.

Alternative scenario:

if the price breaks down and consolidates below the support level of 1.3529, the downtrend will likely resume.