The Analytical Overview of the Main Currency Pairs on 2022.06.06

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0744
• Prev. Close: 1.0719
• % chg. over the last day: -0.23%

The European Central Bank is getting more hawkish. At the end of this week, there will be an important monetary policy meeting of the ECB. Experts believe that the ECB will not raise the interest rate at the current meeting, but such a scenario is still possible. ECB president Christine Lagarde in her blog, hinted at a tightening of monetary policy with interest rate hikes of 25 basis points in July and September.

Trading recommendations

• Support levels: 1.0702,1.0679,1.0643,1.0611,1.0568,1.0509,1.0445,1.0379
• Resistance levels: 1.0720,1.0786,1.0869

From a technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. The MACD indicator has become inactive again, but the buyer’s pressure remains. Under such market conditions, investors can look for buy trades on intraday time frames from the support level of 1.0702 or 1.0679, but only with confirmation and short targets. Sell trades can be considered from the resistance level of 1.0720, but only after the additional confirmation.

Alternative scenario:

if the price breaks out through the 1.0611 support level and fixes below, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2575
• Prev. Close: 1.2489
• % chg. over the last day: -0.69%

The dollar index rose on Thursday and Friday, pushing the pound, euro, and other currencies lower. Last week the UK government announced £15 billion of additional financial support for households affected by rising energy prices. The UK economy is facing stagflation, so the government is trying to find ways to avoid a slowdown in the economy. The next step is expected from the Bank of England.

Trading recommendations

• Support levels: 1.2485,1.2433,1.2398,1.2283,1.2199
• Resistance levels: 1.2558,1.2628,1.2669,1.2698,1.2770

Alternative scenario:

The GBP/USD currency pair trend is bullish on the hourly time frame. The MACD indicator is negative again, and sellers’ pressure has increased. The price is trading below the levels of the moving averages. Under such market conditions, buy deals may be considered from the support level of 1.2485, but only with additional confirmation and short targets. Sell deals should be looked for from the resistance level of 1.2558, but with confirmation.

Technical indicators of the currency pair:

Trading recommendations

The GBP/USD currency pair trend is bullish on the hourly time frame. The MACD indicator is negative again, and sellers’ pressure has increased. The price is trading below the levels of the moving averages. Under such market conditions, buy deals may be considered from the support level of 1.2485, but only with additional confirmation and short targets. Sell deals should be looked for from the resistance level of 1.2558, but with confirmation.

Alternative scenario:

if the price breaks down through the 1.2433 support level and fixes below, the mid-term downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 129.78
• Prev. Close: 130.81
• % chg. over the last day: +0.79%

USD/JPY quotes rose on Friday on the dollar index growth. Barclays analysts attributed last week’s softer yen to a recovery in risk assets, a rise in overseas yields, a stronger dollar, and higher oil prices causing concerns about Japan’s trade balance. Also, it should be noted that the Fed is tightening monetary policy, while the Bank of Japan, on the contrary, holds a soft policy, and nothing will change soon. As a rule, monetary tightening leads to a strengthening of the national currency, while easing, on the contrary, leads to depreciation. As a result, the USD/JPY quotes tend to grow mid-term.

Trading recommendations

• Support levels: 130.12,129.48,128.76,128.10,127.64,127.24,127.04
• Resistance levels: 130.99

The medium-term trend on the USD/JPY currency is bullish. The price is steadily rising, and the MACD indicator is in the positive zone, but there are the first signs of divergence, which means that it is getting harder for the price to move higher. Buy trades can be considered from the support level of 130.12, but with confirmation. A resistance level of 130.99 is good for sell deals, but only with additional confirmation and short targets.

Alternative scenario:

If the price fixes below 128.76, the downtrend will likely resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2569
• Prev. Close: 1.2592
• % chg. over the last day: +0.19%

The Canadian dollar is a commodity currency, so it depends on the dollar index and the oil price dynamics. The dollar index began to show growth again, while oil prices increased. The fundamental picture is now favorable for strengthening both the US dollar and the Canadian dollar, so we should not expect medium-term trend movements here.

Trading recommendations

• Support levels: 1.2566,1.2510
• Resistance levels: 1.2623,1.2676,1.2728,1.2765,1.2807,1.2893,1.2953,1.3000

The USD/CAD currency pair is bearish in terms of technical analysis. The MACD indicator has become inactive, and the selling pressure remains, but there is divergence on higher time frames. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2566, but it is better to wait for the bullish initiative. For sell deals, it is better to consider the resistance level of 1.2623, but also better with confirmation and short targets.

Alternative scenario:

if the price breaks through and consolidates above 1.2728, the uptrend will likely resume.