The Analytical Overview of the Main Currency Pairs on 2023.01.10

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0639
• Prev. Close: 1.0731
• % chg. over the last day: +0.86%

According to Goldman Sachs, the Federal Reserve’s regime of further interest rate hikes is not yet in the price of the dollar. That means the dollar could strengthen slightly in the coming weeks, as investors’ bets on a Fed cut are premature. On the other hand, the European currency now has a fundamental reason to rise as the ECB is planning an aggressive 0.5% rate hike at its next two meetings.

Trading recommendations

• Support levels: 1.0650,1.0597,1.0535,1.0497,1.0480,1.0361,1.0332,1.0284
• Resistance levels: 1.0737,1.0799,1.0844

The trend on the EUR/USD currency pair on the hourly time frame is still bullish. The price is trading above the moving averages. The MACD indicator is in the positive zone, but there are signs of overbought, so it is worth waiting for a correction to find good entry points. Under such market conditions, buy trades are best considered from the support level of 1.0650 or 1.0597 with confirmation on intraday time frames. Sell deals can be considered from the resistance level of 1.0737 or the daily level of 1.0799, but better with a confirmation in the form of a reverse initiative or a false breakout.

Alternative scenario:

if the price breaks down through the support level of 1.0535 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2075
• Prev. Close: 1.2183
• % chg. over the last day: +0.89%

Despite the British pound strengthening in the last few days, the economic background for the British currency remains neutral to negative. The UK is facing a wave of strikes, which aggravates the already difficult situation in the economy. Since there will not be much economic news on the UK until the end of the week, it is quite likely that the US dollar will continue to have the main influence on GBP/USD quotes.

Trading recommendations

• Support levels: 1.2080,1.2000,1.1928,1.1875,1.1684,1.1476,1.1418
• Resistance levels: 1.2193,1.2308,1.2431,1.2519

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price is trading above the moving averages. The MACD indicator is in the positive zone, and the buyers’ pressure remains, but there are signs of divergence, which indicates that further growth is limited. Under such market conditions, buy trades are better to look for on intraday time frames from the support level of 1.2080, but with confirmation. Sell trades are best looked for from the resistance level of 1.2193 or the stronger level of 1.2238, but also better with confirmation in the form of a false breakout or a change of structure on the lower time frames.

Alternative scenario:

if the price breaks down through the 1.1875 support level and fixes above it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 131.90
• Prev. Close: 131.88
• % chg. over the last day: -0.02%

Inflation in Tokyo reached 4%, indicating a stronger-than-expected upward trend in consumer prices. This is the highest value since 1982. The biggest contributors to the price increase were food and energy. Inflation in Tokyo is a leading indicator of the national trend, and its higher rate suggests that national price growth is also likely to accelerate in December. This factor may further fuel rumors that the Bank of Japan will begin to adjust its monetary policy.

Trading recommendations

• Support levels: 131.12,130.58,129.65
• Resistance levels: 132.89,133.29,134.45,135.88,137.03,138.00,139.09

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is now trading below the moving averages, while the MACD indicator is in the negative zone. But the divergence indicates that further decline is limited. The corrective wave is coming to an end. Buy trades are best to consider from the support levels of 131.12 or 130.58, but only with intraday confirmation. Sell deals can be looked for from the level of resistance of 132.89 in case of a reverse reaction or false breakout.

Alternative scenario:

If the price fixes below the support level of 130.58, the downtrend will likely resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3442
• Prev. Close: 1.3389
• % chg. over the last day: -0.39%

The main fundamental driver for the USD/CAD currency pair is the monetary policy of the central banks of Canada and the United States. It should be noted that the Bank of Canada is almost in line with the US Federal Reserve. Hence, the main influence on the quotes now has oil prices, as the Canadian dollar is considered a commodity currency. Oil prices were almost unchanged yesterday at the end of the trading day, so there were no significant changes in the USD/CAD prices. But oil traders are betting that the recovery of China’s economy after the harsh COVID policy will increase oil consumption. And this, in turn, at the current production levels, will contribute to the growth of oil prices.

Trading recommendations

• Support levels: 1.3362,1.3212
• Resistance levels: 1.3492,1.3513,1.3561,1.3594,1.3632,1.3700

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bearish. The price is trading on the moving averages. The MACD indicator has become negative, but it indicates a divergence while the price has reached the support level. Buy trades should be considered from the support level of 1.3362, but only with short targets, as entry is against the main priority. Sell deals are best to look for on intraday time frames from the resistance level of 1.3492 or 1.3513, but with confirmation in the form of a reverse initiative on the lower time frames or a false breakout.

Alternative scenario:

if the price breaks out and consolidates above the resistance level of 1.3632, the uptrend will likely resume.