The Analytical Overview of the Main Currency Pairs on 2022.04.08

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0891
• Prev. Close: 1.0879
• % chg. over the last day: -0.11%

The ECB’s March monetary policy minutes showed that many members believe that the current high inflation rate and its persistence require immediate further steps to normalize monetary policy. In particular, they are talking about an interest rate hike in the third quarter of 2022. Others continue to offer “wait and see” amid extremely high uncertainty. The US Fed is now pursuing a more decisive policy, which resulted in the rapid strengthening of the US dollar.

Trading recommendations

• Support levels: 1.0823,1.0633
• Resistance levels: 1.0946,1.0963,1.1027,1.1075,1.1135,1.1196,1.1291

From the technical point of view, the trend on the EUR/USD currency pair in the hourly time frame is bearish. The price continues to decline without significant pullbacks. The MACD indicator is negative, but the first signs of divergence have appeared. Under such market conditions, it is possible to look for buy trades on intraday timeframes, but only with short targets. Sell trades should be considered from the resistance level of 1.0946 or 1.0963, but only after the additional confirmation.

Alternative scenario:

if the price breaks out through the 1.1075 resistance level and fixes above, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3066
• Prev. Close: 1.3073
• % chg. over the last day: +0.05%

The narrowing of the yield spread between UK and US government bonds is negatively affecting the British pound. But due to strong economic indicators, the British currency is showing resilience against the growth of the dollar index.

Trading recommendations

• Support levels: 1.3053,1.3015,1.2989,1.2863
• Resistance levels: 1.3106,1.3144,1.3161,1.3244,1.3274

On the hourly time frame, the GBP/USD currency pair trend is still bullish. The price has now reached the priority change level, and the buyers are managed to hold their positions. The price has formed a narrow price range. The MACD indicator has become inactive, and divergence is present. Under such market conditions, buy trades should be considered from the support level of 1.3053, but after the buyers’ impulse movement. Sell deals should be considered from the resistance level of 1.3106 or 1.3144 if the price shows a bearish initiative.

Alternative scenario:

if the price breaks down through the 1.3053 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: 123.75
• Prev. Close: 123.96
• % chg. over the last day: +0.17%

The fundamental picture for the Japanese yen remains unchanged. The monetary policy of the Bank of Japan is now “ultra-soft” and aims to decrease the national currency rate (USD/JPY growth). A strong US labor market will contribute to inflation, so the US Fed will tighten monetary policy more aggressively. The dollar index rose to its highest level in almost two years. 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 opposed.

Trading recommendations

• Support levels: 122.97,122.63,121.83,120.88,119.52,117.72
• Resistance levels: 124.04,125.22

The medium-term trend on the USD/JPY currency pair is bullish. The buyer’s pressure is increasing again. The MACD indicator has become inactive, and buyers’ pressure has decreased. 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 122.97 or 122.63, but with additional confirmation. A resistance level of 124.04 may be considered for sell deals, but only with short targets.

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: 1.2536
• Prev. Close: 1.2590
• % chg. over the last day: +0.43%

The Canadian dollar is a commodity currency and is highly dependent on the movement of oil prices and the dollar index. Yesterday, the dollar index continued to rise while oil prices fell after the International Energy Agency (IEA) said it would release an additional 60 million barrels of reserves into the open market, in addition to the previous release of 180 million barrels announced by the United States. Falling oil prices are putting pressure on the Canadian currency, so USD/CAD quotes are growing amid the rising dollar index.

Trading recommendations

• Support levels: 1.2476,1.2430
• Resistance levels: 1.2592,1.2655,1.2713,1.2754,1.2851.

In terms of technical analysis, the USD/CAD currency pair trend is bearish, but the price reached the priority change levels yesterday. The MACD indicator is in the positive zone. Trade only with short targets, since on the USD/CAD currency pair fundamentally, there are no prerequisites for the medium-term trend. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2476, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2592, but it is better with confirmation.

Alternative scenario:

if the price breaks through and consolidates above 1.2592, the downtrend will likely be broken.