The Analytical Overview of the Main Currency Pairs on 2021.08.27

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1771
• Prev. Close: 1.1754
• % chg. over the last day: -0.14%

According to the ECB monetary policy meeting minutes, some supporters of the European Central Bank’s Governing Council disagree with its new guidance on the future course of the policy. They fear it is underestimating the risk of rising inflation. Policymakers are concerned that the new formulation implies constant exceeding the limit and the “promise to maintain interest rates at the current or lower level for a very long period of time without explicit reservation.”

Trading recommendations

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

From a technical point of view, the general trend of the EUR/USD currency pair is bearish. But the price is trading above the moving average, and the local trend is upward now. The MACD indicator started signaling a divergence in the opposite direction. 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. It is better to buy from the false breakdown zone around the 1.1703 level.

Alternative scenario:

if the price breaks out 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: 1.3760
• Prev. Close: 1.3698
• % chg. over the last day: -0.45%

The British pound slightly lost its position. The price decreased by 0.45% yesterday. A lot will depend on what Jerome Powell will say in his speech today. If nothing will be mentioned about the reduction of the QE program or if Mr. Powell will indicate that it is too early to speak about it, the dollar index will rally down, which will play in favor of the growth of the quotes against the dollar, including the pound.

Trading recommendations

• Support levels: 1.3692,1.3632,1.3614,1.3525
• Resistance levels: 1.3741,1.3793,1.3772,1.3886,1.3935,1.4002

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. But now, the price fell below the moving average again, and the MACD indicator has become negative. Under such market conditions, it is better to look for sell trades from the resistance level, where sellers have shown initiative. Buy positions can be considered only within the day and only with short targets.

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: 109.95
• Prev. Close: 110.02
• % chg. over the last day: +0.06%

Japan continues to struggle with the delta strain. The fundamental picture is not in favor of JPY strengthening, but the Japanese currency is also highly dependent on the dollar index. That’s why if the USD goes down today after Mr. Powell’s speech, the USD/JPY will also go down and vice versa.

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 of the USD/JPY currency pair is bullish. The fall of the dollar index compensated for the negative impacts of the news. As a result, the USD/JPY currency pair is trading flat. The MACD indicator is inactive. Under such market conditions, traders should 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: 1.2588
• Prev. Close: 1.2685
• % chg. over the last day: +0.77%

The Canadian dollar is a commodity currency, so the USD/CAD currency pair is highly dependent on the dynamics of the dollar index and oil prices. Yesterday the dollar index slightly increased, while oil prices remained at the same level. As a result, the USD/CAD currency pair broke out of the trading range upwards.

Trading recommendations

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

In terms of technical analysis, the USD/CAD trend is still bullish. The priority change level has survived this time. The MACD indicator has become positive, and the divergence worked as it should be. It is better to look for buy positions from the priority change level, where the buyers have shown initiative. Sell positions can be considered from the resistance levels, but only within the day and with short targets.

Alternative scenario:

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