The Analytical Overview of the Main Currency Pairs on 2021.10.18

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1596
• Prev. Close: 1.1599
• % chg. over the last day: +0.03%

Germany’s inflation expectations continue to rise as markets no longer view inflation as a temporary phenomenon but as something more permanent. The German inflation expectation index increased up to 1.80%, the highest level since April 2013.

Trading recommendations

• Support levels: 1.1548,1.1502,1.1453
• Resistance levels: 1.1615,1.1671,1.1717,1.1772,1.1802,1.1835

From the technical point of view, the EUR/USD trend is bearish. The price failed to break through the priority change level. The MACD indicator has become inactive. Under such market conditions, traders should consider selling deals from the priority change level, given there is a sellers’ initiative. Buy trades should be considered only on lower time frames from the support levels or from the buyers’ initiative areas.

Alternative scenario:

if the price breaks through the 1.1615 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: 1.3671
• Prev. Close: 1.3744
• % chg. over the last day: +0.53%

The UK reports on inflation this week. Analysts expect consumer prices to rise and fear that the inflation rate will increase above 3.2%. Investors and funds will be watching the report closely in anticipation that the Bank of England will raise interest rates before the end of the year to combat rising inflation.

Trading recommendations

• Support levels: 1.3685,1.3617,1.3584,1.3532,1.3457,1.3360,1.3282
• Resistance levels: 1.3759,1.3812,1.3886

On the hourly time frame, the GBP/USD trend has changed to bullish. The British pound is strengthening due to its direct correlation with oil prices. The MACD has become inactive. Buy trades should be considered only within the day and only from the initiative zone of the buyers. It is better to look for sell deals from the resistance levels, but only after an additional confirmation in the form of a sellers’ initiative because the buyers’ pressure is higher now.

Alternative scenario:

if the price breaks down through the 1.3532 support level and consolidates below, the bullish scenario is likely to be broken.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 113.66
• Prev. Close: 114.25
• % chg. over the last day: +0.52%

Japan will launch a 100 billion yen ($875 million) fund in 2022 to promote modern technology and economic security. The fund’s investments will go to universities and companies for research and development in technological areas that the Japanese government considers a priority. It also became known that Prime Minister Kishida intends to call on producers of oil to increase production.

Trading recommendations

• Support levels: 113.66,113.25,112.19,111.53,110.99,110.65,109.95,109.63
• Resistance levels: 114.40

The main trend of the USD/JPY currency pair is bullish. The Japanese yen is rapidly declining against the US dollar. The MACD indicator is in the positive zone. However, there is a divergence on higher time frames, which means that growth is limited, and correction is expected soon. Under such market conditions, it’s better to look for buy positions from the support levels near the moving average since the price has significantly deviated from the average line. Sell positions should be considered only throughout the day from the resistance levels, given there is sellers’ initiative.

Alternative scenario:

if the price falls below 112.19, the uptrend is likely to be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2366
• Prev. Close: 1.2358
• % chg. over the last day: -0.06%

The Canadian dollar is a commodity currency, so USD/CAD is highly dependent on the dynamics of the dollar index and oil prices. The dollar index was trading flat on Friday while oil prices were slowly growing. As a result, the USD/CAD currency pair is decreasing due to the growth in oil prices and the Canadian dollar strengthening.

Trading recommendations

• Support levels: 1.2340
• Resistance levels: 1.24251.2518,1.2565,1.2628,1.2729,1.2774

From the technical point of view, the trend of the USD/CAD currency pair is bearish. But the price has reached the daily support level, which will at least give a bounce. The MACD indicator has become inactive, but there are still signs of divergence on higher time frames. Under such market conditions, it is better to look for sell deals from the resistance levels near the moving average. Buy trades should be considered only on smaller time frames from the support levels if there is the buyer’s initiative.

Alternative scenario:

if the price breaks out through the 1.2565 resistance level and fixes above, the uptrend will likely resume.