The Analytical Overview of the Main Currency Pairs on 2023.03.01

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0602
• Prev. Close: 1.0575
• % chg. over the last day: -0.25%

Important data on manufacturing activity will be released today in Europe and the US. The European PMI is expected to continue recovering but remain in restrictive territory below the 50 mark. With inflation remaining high across Europe, a rise in business activity will only add to the ECB’s confidence to raise interest rates. The ECB will likely raise rates by 0.5% not only in March but also in May.

Trading recommendations

• Support levels: 1.0565,1.0544
• Resistance levels: 1.0644,1.0704,1.0804,1.0906,1.0926,1.0967,1.1017,1.1077

The trend on the EUR/USD currency pair on the hourly time frame is bearish. At the moment, the price is trading at the level of moving averages. The MACD indicator has become inactive. Under such market conditions, buy trades are best considered from the support level of 1.0565 or 1.0544. Sell positions can be considered from the resistance level of 1.0644, but it is better with confirmation in the form of a reverse initiative on the lower time frames or a false breakout.

Alternative scenario:

if the price breaks down through the resistance level of 1.0704 and fixes above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2059
• Prev. Close: 1.2022
• % chg. over the last day: -0.31%

Based on the latest Gfk consumer report, pessimism about the UK economy seems to be easing a bit as UK citizens see their personal financial situation improving in recent months. The British pound may get some support in the coming days, along with growing optimism about the new version of the Northern Ireland Protocol (the deal regulating the flow of goods from England to Northern Ireland).

Trading recommendations

• Support levels: 1.2014,1.1984,1.1929,1.1875
• Resistance levels: 1.2147,1.2200,1.2267,1.2311,1.2416

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. At the moment, the price is trading at the level of moving averages. The MACD indicator has become inactive. Under such market conditions, it is better to look for buy deals on intraday time frames from the support level of 1.2014 or 1.1984. Sell trades are best sought from the resistance level of 1.2147 but with a confirmation in the form of a false breakout and an impulse return below the level.

Alternative scenario:

if the price breaks out through the 1.2200 resistance level and fixes above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 136.15
• Prev. Close: 136.23
• % chg. over the last day: +0.06%

Current Deputy Governor of the Bank of Japan Masazumi Wakatabe said yesterday that the central bank of Japan must remain alert to the potential dangers of long-term stagnation and low inflation, as price increases caused by cost pressures are short-lived. These comments, along with those of current Bank of Japan governor candidate Kazuo Ueda, appear to have put an end to rumors that the new leadership will change BoJ policy. The Japanese yen remains under pressure versus the US dollar due to the interest rate differential.

Trading recommendations

• Support levels: 135.06,133.47,132.95,131.43,129.68,129.98,129.19
• Resistance levels: 136.49,137.48

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. But the price formed a false breakout area above the resistance level of 136.49. As a rule, such a formation can lead to a temporary correction. The MACD indicator has become inactive, but signs of divergence are still observed in several time frames. Under such market conditions, buy trades are best sought from the support level of 135.06 or after an impulse breakout of the resistance level of 136.49. Sell deals can be sought from 136.49, but with additional confirmation in the form of a reverse initiative on the lower time frames.

Alternative scenario:

if the price fixes below the 134.04 support level, the downtrend will be resumed with a high probability.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3577
• Prev. Close: 1.3644
• % chg. over the last day: +0.49%

The Canadian dollar has been dominated by the dollar index lately as markets continue to hawk interest rate guidance for the Federal Reserve. The peak rate forecast for 2023 has now exceeded 5.4%, while money markets forecast no change in the Bank of Canada’s (BoC) upcoming decision. The divergence in interest rates could have a negative impact on Canadians. Over the past month, Canada’s GDP has fallen by 0.1%. This may increase fears of a recession in Canada, putting additional pressure on the Canadian dollar.

Trading recommendations

• Support levels: 1.3577,1.3513,1.3470,1.3440,1.3390,1.3347,1.3295,1.3212
• Resistance levels: 1.3664,1.3700

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 the buyers’ pressure remains. Under such market conditions, buy trades should be sought after a pullback to the 1.3577 support level. Sell deals may be sought from the resistance level of 1.3664 or 1.3700, but only with a confirmation in the form of a false breakdown and short targets.

Alternative scenario:

if the price breaks down and consolidates below the support level of 1.3469, the downtrend will likely resume.