The Analytical Overview of the Main Currency Pairs on 2022.04.01

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1155
• Prev. Close: 1.1065
• % chg. over the last day: -0.90%

The number of new jobless claims in the US was 202,000, while analysts expected 196,000. In February, US household spending increased by 0.2%, while a 0.5% growth was expected. As for personal income, it increased by 0.5%, as expected. If incomes grow faster than expenses, this is a good sign for the economy, especially for stock indices. But a negative factor for the dollar index. In February, Eurozone unemployment fell to 6.8% from 6.9%. Eurozone inflation data will be released today. Analysts forecast inflation to rise from 5.9% to 6.6% year on year. Reducing unemployment along with rising inflation are prerequisites for the monetary policy tightening on the part of the ECB.

Trading recommendations

• Support levels: 1.1037,1.1017,1.0963,1.0917,1.0887,1.0823,1.0633
• Resistance levels: 1.1149,1.1196,1.1291

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame has changed to bullish. At the moment, the price has corrected and is trading between the moving averages. The MACD indicator is in the negative zone. Under such market conditions, it is better to look for buy trades on intraday timeframes from the support level of 1.1037. Sell trades should be considered from the resistance level of 1.1149, but only after the additional confirmation.

Alternative scenario:

if the price breaks down through the 1.1017 support level and fixes below, the uptrend will likely be broken.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3129
• Prev. Close: 1.3142
• % chg. over the last day: +0.10%

The news that the US intends to release up to 180 million barrels of oil from its strategic reserves in six months is a negative factor for the British pound, as the pound is directly correlated with Brent oil quotes, which in turn is highly correlated with the US WTI oil quotes. Given the Fed’s aggressive policies, the British pound could lose much of its position if the Bank of England does not continue to raise interest rates. Currently, the Bank of England has decided to suspend monetary policy tightening.

Trading recommendations

• Support levels: 1.3117,1.3074,1.3015,1.2989,1.2863
• Resistance levels: 1.3161,1.3244,1.3274

On the hourly time frame, the GBP/USD currency pair trend is bullish. The price movement pattern is beginning to show a flat structure. The MACD indicator became inactive. Under such market conditions, buy trades should be considered from the support level of 1.3117, but better with confirmation. Sell deals should be considered from the resistance level of 1.3244, but only with short targets.

Alternative scenario:

if the price breaks down through the 1.3074 support level and fixes below, the mid-term uptrend will likely be broken.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 121.84
• Prev. Close: 121.69
• % chg. over the last day: -0.12%

The fundamental picture for the Japanese Yen remains unchanged. The monetary policy of the Bank of Japan is now “ultra-soft” and is aimed at decreasing the national currency rate (USD/JPY growth). Due to the Сentral Bank of Japan’s work in the debt market, the Japanese Yen is now temporarily strengthening. However, the mid-term outlook remains unchanged – analysts see a continuation of the uptrend, as the monetary policy of the US and Japanese central banks are now diametrically opposed.

Trading recommendations

• Support levels: 120.88,119.52,117.72
• Resistance levels: 122.83,123.44,125.22

The medium-term trend on the USD/JPY currency pair is bullish. The price corrected to the moving averages. The MACD indicator has become positive. Under such market conditions, it is best to look for buy deals, expecting the continuation of the uptrend. First of all, it is worth considering the support level of 120.88, but with additional confirmation. For sell deals, a resistance level of 122.83 or 123.44 may be considered, but only after the sellers’ initiative.

Alternative scenario:

If the price fixes below 119.52, the uptrend will likely be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2479
• Prev. Close: 1.2505
• % chg. over the last day: +0.21%

The Canadian dollar is a commodity currency and is highly dependent on the movement of oil prices and the dollar index. OPEC+ will stick to its current plan to increase oil production, as OPEC+ ministers see a balanced oil market and increased volatility through the geopolitics. The next OPEC+ ministerial meeting will take place on May 5. After OPEC+ did not raise its production plan, the US said it would release a record 1 million barrels of oil a day from its strategic reserve for six months. This move will limit the rise in oil prices, which in combination with the rise in the dollar index may lead to an increase in the USD/CAD currency pair. The only thing that can prevent this is the monetary policy of the Central Bank of Canada, which, like the Fed, is preparing for a tightening.

Trading recommendations

• Support levels: 1.2486,1.2453
• Resistance levels: 1.2563,1.2655,1.2713,1.2754,1.2851

In terms of technical analysis, the USD/CAD currency pair trend is bearish. The MACD indicator has become inactive, but the pressure on buyers remains. Trade only with short targets, since on the USD/CAD currency pair fundamentally, there are no prerequisites for the medium-term trend, as the dollar index in the medium term also has the support of the Fed. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2486, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2563.

Alternative scenario:

if the price breaks through and consolidates above 1.2654, the downtrend will likely be broken.