The Analytical Overview of the Main Currency Pairs on 2022.02.21

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1360
• Prev. Close: 1.1323
• % chg. over the last day: -0.32%

Statistics on business activity in the manufacturing and services sectors will be released today in Europe. Analysts expect to see an improvement in the indicators against the backdrop of the lifting of restrictions in several European countries. Today is a bank holiday in the United States, so volatility is expected only during the European session.

Trading recommendations

• Support levels: 1.1322,1.1283
• Resistance levels: 1.1392,1.1423,1.1481,1.1534

From the technical point of view, the EUR/USD on the hourly time frame is bearish. The price is trading in a flat around the moving average. Under such market conditions, it is best to look for sell trades on intraday time frames from the resistance level of 1.1392 or 1.1423. Buy trades should be considered from the support level of 1.1322, but only with additional confirmation, as the price has already tested this level.

Alternative scenario:

if the price breaks out through the 1.1423 resistance level and fixes above, the mid-term uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3607
• Prev. Close: 1.3583
• % chg. over the last day: -0.17%

Eastern Europe situation aside, the British pound is now more stable than the euro as the Central Bank of England has raised interest rates twice and is preparing for a third rate hike at its next policy meeting in March. The UK business activity data will be released today. Analysts expect to see an improvement in the January figures as the UK lifted all coronavirus-related restrictions last month.

Trading recommendations

• Support levels: 1.3572,1.3549,1.3506,1.3475,1.3457
• Resistance levels: 1.3639,1.3662

On the hourly time frame, the GBP/USD currency pair trend is still bullish. Unlike the euro, the British pound is more stable, as it has fundamental support. Under such market conditions, buy trades should be looked at from the support level of 1.3572. The resistance level of 1.3639 or 1.3662 may be considered for opening sell deals, but only with additional confirmation in the form of sellers’ initiative.

Alternative scenario:

if the price breaks out through the 1.3506 support level and consolidates below, the bullish scenario will be broken.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 114.93
• Prev. Close: 115.02
• % chg. over the last day: +0.07%

Geopolitical tensions in Eastern Europe are forcing investors to move into defensive assets, including the Japanese yen. But as soon as the situation cools down, the Japanese yen will get cheaper again (USD/JPY will grow) as the policies of the central banks in Japan and the US are now completely opposite. The Fed is already preparing for a tightening while the Bank of Japan actively stimulates the economy. Japan Manufacturing PMI data showed a sharp decline in January from 55.4 to 52.9, which means a slow down in business activity in the country.

Trading recommendations

• Support levels: 114.94,114.76
• Resistance levels: 115.43,115.64,116.12,116.50

The global trend on the USD/JPY currency pair is bullish. On Friday, the price again reached the priority change level, but the buyers are still holding their positions. If the sellers can now push the price below 114.94, the priority of the USD/JPY currency pair will change to bearish. Under such market conditions, it is best to look for buy deals on the lower time frames from the support level of 114.94, but with additional confirmation. Sell positions can be looked at from the resistance level 115.42 or 115.64, but only with short targets and additional confirmation.

Alternative scenario:

if the price fixes below 114.94, the uptrend will likely be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2706
• Prev. Close: 1.2749
• % chg. over the last day: +0.33%

The Canadian dollar is a commodity currency, so it depends not only on the monetary policy of the Bank of Canada but also on the oil prices and the dollar index. The dollar index rose on Friday, while oil prices decreased slightly on the background of the negotiations with Iran, which could bring a million new Iranian barrels or more to the world market. As a result, the USD/CAD quotes increased but generally traded without a single dynamic. Both the dollar index and the Canadian dollar have fundamental support from central banks, and the US dollar is now being bought as a protective asset against market turmoil.

Trading recommendations

• Support levels: 1.2718,1.2680,1.2600,1.2506
• Resistance levels: 1.2794

From a technical point of view, the USD/CAD currency pair is bullish. The price is in a wide flat with high volatility. It is worth trading only with short targets, as both oil and the dollar index are inclined to grow now. However, the dollar index now has a higher growth priority. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2718. For sell deals, it is better to consider the resistance level of 1.2794, but with an additional confirmation in the form of an initiative of sellers.

Alternative scenario:

if the price breaks through the 1.2680 support level and fixes below, the downtrend will likely resume.