The Analytical Overview of the Main Currency Pairs on 2022.02.28

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1190
• Prev. Close: 1.1271
• % chg. over the last day: +0.72%

In terms of fundamental analysis and geopolitical risks, the European currency will now mainly depend on the actions of the US Fed. The ECB is unlikely to change its monetary policy, as new geopolitical risks, Germany’s refusal to supply gas from Russia will lead to a slowdown in economic growth in Europe. Thus, the ECB’s stimulus is too early to end.

Trading recommendations

• Support levels: 1.1185,1.1126,1.1032
• Resistance levels: 1.1263,1.1300,1.1392,1.1459

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The MACD indicator is in the negative zone with no signs of reversal. The price is trading in a wide price corridor. Under such market conditions, it is best to look for sell trades on intraday time frames from the resistance level of 1.1300. Buy trades should be considered from the intraday support at 1.1185, but only with short targets.

Alternative scenario:

if the price breaks out through the 1.1300 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: 1.3377
• Prev. Close: 1.3409
• % chg. over the last day: +0.23%

Although the Bank of England has already raised the interest rate three times, it did not help the British currency fall last week amid Russia’s aggression against Ukraine. The yield gap between UK and US government bonds is narrowing again amid rising US government bond yields, which will support the dollar.

Trading recommendations

• Support levels: 1.3317,1.3274,1.3220
• Resistance levels: 1.3442,1.3486,1.3529,1.3560

On the hourly time frame, the currency pair GBP/USD trend is bullish. Volatility has increased sharply. Now the price is trading in a wide corridor with the boundaries of 1.3317-1.3442. Under such market conditions, buy trades should be considered from the level of 1.3317, but it is better with confirmation. The resistance level of 1.3442 is good for sell deals, but only with an additional confirmation in the form of sellers’ initiative.

Alternative scenario:

if the price breaks out through the 1.3529 resistance level and fixes above, the mid-term uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 115.46
• Prev. Close: 115.51
• % chg. over the last day: +0.04%

The Japanese yen is a safe-haven currency in case of various financial shocks. With the beginning of Russia’s aggression against Ukraine, the Japanese yen has become a safe-haven currency for many investors, along with the US Dollar. For this reason, both the Japanese yen and Dollar Index are now inclined to rise, even though the policies of the central banks of the USA and Japan are diametrically opposite.

Trading recommendations

• Support levels: 115.13,114.78,114.41
• Resistance levels: 115.49,115.69,115.87,116.32

The medium-term trend on the currency pair USD/JPY is bullish. The MACD indicator is in the positive zone, but there is no sign of reversal. Under such market conditions, it is better to buy from the support level 115.13, but with additional confirmation. For sell deals, resistance level 115.49 may be considered.

Alternative scenario:

if the price fixes below 114.41, the uptrend will likely be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2806
• Prev. Close: 1.2699
• % chg. over the last day: -0.64%

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 fundamental picture now is that both the dollar index and oil prices will grow. Investors are buying the dollar index as a defensive asset in time of war; next month, the Fed will start to tighten the monetary policy, which will also provide additional support to the US currency. Oil prices might increase even more as investors continue to hold oil contracts, as they are afraid of supply disruptions from Russia.

Trading recommendations

• Support levels: 1.2706,1.2694,1.2681,1.2636
• Resistance levels: 1.2797,1.2820,1.2876

From the technical point of view, the USD/CAD currency pair trend is bearish. But the price is in a wide flat with high volatility. It is worth trading only with short targets because both oil and the dollar index are inclined to grow now. Under such market conditions, it is better to look for buy trades on lower time frames from the support level 1.2706, but it is better with additional confirmation. For selling, it is better to consider the resistance level of 1.2797.

Alternative scenario:

if the price breaks through and consolidates below 1.2694, the downtrend will most likely be broken.