The Analytical Overview of the Main Currency Pairs on 2022.03.21

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1091
• Prev. Close: 1.1050
• % chg. over the last day: -0.37%

ECB Presiden Christine Lagarde and US Federal Reserve Chairman Jerome Powell are expected to speak today. Any hints of the ECB’s head on the tightening of monetary policy can give confidence to the European currency. At the moment, the fundamental situation favors the growth of the US dollar index (decrease in EUR/USD quotes) as the US Fed started its tightening policy.

Trading recommendations

• Support levels: 1.0917,1.0887,1.0823,1.0633
• Resistance levels: 1.1079,1.1112,1.1291

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is still bearish, but the price is trading close to the priority change level. The MACD indicator has become inactive. Under such market conditions, it is better to look for sell trades on the intraday time frames from the resistance level of 1.1079. Buy trades should be considered from the support level of 1.0917, but only with short targets.

Alternative scenario:

if the price breaks out through the 1.1112 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: 1.3147
• Prev. Close: 1.3177
• % chg. over the last day: +0.23%

The monetary policy of the Bank of England is tightening now. The Bank of England has already raised the interest rate three times, but this does not allow the British pound to show growth. The war in Ukraine has greatly affected the British economy, as rising energy and food prices harm inflation in the country. Analysts forecast another 0.5% growth in UK consumer prices.

Trading recommendations

• Support levels: 1.3117,1.3087,1.2989,1.2863
• Resistance levels: 1.3182,1.3274

On the hourly time frame, the GBP/USD currency pair trend is bearish, but the price is approaching the priority change level. The MACD indicator has become inactive. Under such market conditions, buy trades should be considered from the support level of 1.3087, but better with confirmation. The best way to sell is to consider the resistance level of 1.3182, but only with confirmation in the form of the sellers’ initiative.

Alternative scenario:

if the price breaks out through the 1.3182 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: 118.58
• Prev. Close: 119.14
• % chg. over the last day: +0.47%

On Friday, the Bank of Japan maintained its massive stimulus and warned of heightened risks to the economic recovery due to the war in Eastern Europe. With Japan’s inflation and wage growth lagging behind other countries, the Bank of Japan has no choice but to maintain its stimulus measures patiently. This ultra-soft policy contributes to the depreciation of the national currency. Given that the US Federal Reserve has already started raising interest rates and plans to do 6-7 more at each meeting, this situation favors the growth of USD/JPY quotes in the mid-term.

Trading recommendations

• Support levels: 119.00,118.58,118.02,117.34,116.95,116.32
• Resistance levels: 119.52,120.42

The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator is in the positive zone. There are signs of overbought and divergence, which means that a corrective move down is close. Under such market conditions, it is best to look for buy deals after a small pullback, as the price has strongly deviated from the moving averages. A support level of 118.58 or 118.02 would be the best, but with additional confirmation. For sell deals, the resistance level of 119.52 can be considered.

Alternative scenario:

if the price fixes below 117.34, the uptrend will likely be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2624
• Prev. Close: 1.2602
• % chg. over the last day: -0.17%

The Canadian dollar is a commodity currency, so it is highly dependent not only on the monetary policy of the Bank of Canada but also on the dynamics of oil prices and the dollar index. Oil prices continue to rise due to renewed focus on supply shortages in the coming weeks due to sanctions against Russia. At the same time, rising inflation in Canada increases the probability of more aggressive interest rate hikes. All these factors contribute to strengthening the Canadian currency (decrease in USD/CAD quotes).

Trading recommendations

• Support levels: 1.2555,1.2517
• Resistance levels: 1.2655,1.2713,1.2754,1.2851

In terms of technical analysis, the USD/CAD currency pair trend is bearish. The price confidently broke through the priority change level and consolidated below. The MACD indicator has become negative, the sellers’ pressure has increased, but there are signs of divergence. It is worth trading only with short targets because there are basically no prerequisites for a medium-term trend on the USD/CAD currency pair since the dollar index also has the support of the Fed in the medium term. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2555, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2655.

Alternative scenario:

if the price breaks through and consolidates above 1.2754, the downtrend will likely be broken.