The Analytical Overview of the Main Currency Pairs on 2021.08.24

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1688
• Prev. Close: 1.1745
• % chg. over the last day: +0.48%

Germany’s Manufacturing PMI index also slowed in August. In general, in Europe, economic activity in the manufacturing sector decreased. On the other hand, the business activity index in the services sector remained at about the same levels. Economists expect the data to be much better in the third quarter. Due to a sharp drop in the dollar index, the European currency managed to get stronger yesterday.

Trading recommendations

• Support levels: 1.1704,1.1620
• Resistance levels: 1.1759,1.1799,1.1817,1.1854,1.1894,1.1934,1.1969

From a technical point of view, the general trend in the EUR/USD currency pair is bearish. The price has consolidated above the support level and formed a false breakdown zone below. Taking into account the divergence on the MACD indicator on the higher timeframes, the buyers’ pressure is higher now. Under such market conditions, it is best to look for sell trades from the resistance levels, where sellers showed the initiative. Buy trades can only be considered intraday from the support levels where the buyers have shown the initiative.

Alternative scenario:

if the price breaks through the 1.1817 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: 1.3621
• Prev. Close: 1.3721
• % chg. over the last day: +0.73%

UK manufacturing activity slightly fell in August but was better than economists’ expectations. Services PMI index hit a two-month low. These are clear signs that the pace of recovery is slowing. But due to the decline of the US dollar index and increase in Brent crude oil prices, the British pound added 100 points yesterday.

Trading recommendations

• Support levels: 1.3714,1.3632,1.3614,1.3525
• Resistance levels: 1.3793,1.3772,1.3886,1.3935,1.4002

On the hourly time frame, the GBP/USD trend is bearish. The price has consolidated above the support level and formed a false breakdown zone below. The MACD indicator has become positive with no signs of a reversal. Under such market conditions, it is better to look for sell trades from the resistance levels. There are no optimal entry points for buy deals now.

Alternative scenario:

if the price breaks out through the 1.3885 resistance level and consolidates above, the bullish scenario will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 109.72
• Prev. Close: 109.68
• % chg. over the last day: -0.04%

According to a report from the Bank of Japan, the Consumer Price Index increased by 0.1% in August. This data confirms the view that inflation is unlikely to accelerate in Japan and the Bank of Japan will need to maintain its extremely soft monetary policy for an extended period.

Trading recommendations

• Support levels: 109.43,109.19,108.65
• Resistance levels: 110.11,110.34,110.66,110.95,111.48

The main trend on the USD/JPY currency pair is bullish. The fall of the dollar index compensated for the negative impact of the manufacturing sector news on Monday. As a result, the USD/JPY currency pair is trading flat. The MACD indicator has become inactive. Under such market conditions, it is best for traders to look for buy trades from the support level, where the buyers have shown initiative. Sell positions should be considered only on lower time frames from the resistance levels and only with short targets.

Alternative scenario:

if the price falls below 109.18, the uptrend is likely to be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2817
• Prev. Close: 1.2647
• % chg. over the last day: -1.34%

The USD/CAD currency pair is highly dependent on the dynamics of the dollar index and oil prices. The dollar index sharply decreased yesterday while the oil prices significantly increased, which caused a sharp strengthening of the Canadian dollar and, accordingly, an aggressive USD/CAD quote decrease.

Trading recommendations

• Support levels: 1.2602,1.2554
• Resistance levels: 1.2656,1.2713,1.2812,1.2891,1.2951

In terms of technical analysis, the USD/CAD trend is still bullish. But now, the price has approached the priority change level. Buy positions should be considered from the support levels after the buyers’ initiative. There are no optimal entry points to sell deals now, because the support level is ahead.

Alternative scenario:

if the price breaks through down the 1.2602 support level and fixes below, the uptrend is likely to be broken.