The Analytical Overview of the Main Currency Pairs on 2023.04.24

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0965
• Prev. Close: 1.0988
• % chg. over the last day: +0.21%

On Friday in Europe, statistical data was published on business activity in the manufacturing and services sectors. Data came out mixed. The services sector showed strong growth in Germany, France, Spain, and the Eurozone, but manufacturing activity fell in almost the whole region. This is the first sign of the pressure of high-interest rates, which makes it more likely that the ECB will cut the pace of rate hikes to 0.25%, with a 90% chance that the US Federal Reserve will also raise interest rates by 0.25% at its next meeting. The interest rate differential between the ECB and the US Fed will remain the same. But with the ECB not going to stop in May, the fundamental picture is slightly in favor of a stronger European currency in the medium term.

Trading recommendations

• Support levels: 1.0895,1.0830,1.0803,1.0770,1.0680
• Resistance levels: 1.0999,1.1041,1.1185

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is trading on the level of moving averages, a wide flat is forming, and the price is pushing up to the upper border of the flat in the form of a triangle. As a rule, such formation ends with an impulse movement. The MACD indicator shows no signs of activity. Under such market conditions, it is better to consider buying trades from the moving averages, counting on an impulse break-up upward. Sell positing can be considered from the resistance level of 1.0999, but only with a confirmation in the form of a false breakout.

Alternative scenario:

if the price breaks down through the support level of 1.0895 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2437
• Prev. Close: 1.2440
• % chg. over the last day: +0.02%

The GBP/USD rally has recently come to a halt, and there is a chance that the consolidation may continue for some time. Although UK inflation showed a decline last week, price pressures remain high. Short-term monetary policy dynamics for the sterling and the US dollar are broadly similar, as both central banks plan to raise interest rates by 0.25% at their meetings.

Trading recommendations

• Support levels: 1.2391,1.2343,1.2320,1.2267,1.2178,1.2112
• Resistance levels: 1.2472,1.2519,1.2643

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is still bullish. The price is forming a wide-volatile flat. The MACD indicator has become inactive, and the price is trading at the level of the moving averages. Buying is best considered from the support level of 1.2391 but with confirmation. Going below 1.2391 is undesirable for buyers. Sell trades are best to look for on intraday time frames from the resistance level of 1.2472 but with a confirmation in the form of a false breakout.

Alternative scenario:

if the price breaks down through the 1.2343 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 134.21
• Prev. Close: 134.11
• % chg. over the last day: -0.07%

This Friday, the Bank of Japan will hold its first meeting under the new governor Kazuo Ueda. The key question is whether the bank’s new leadership keeps the pressure on prices steady. Previous forecasts have been skeptical, although this was before the spring round of wage increases. The likelihood of any change in monetary policy at the current meeting is extremely low, but there could be surprises. For example, the Bank of Japan may announce a phase-out of its stimulus program or waive its government bond yield curve control.

Trading recommendations

• Support levels: 133.11,132.02,131.82,130.62
• Resistance levels: 134.47,135.11,136.07,137.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading above the moving averages again. The MACD indicator has returned to positive territory, and there is buying pressure inside the day. Under such market conditions, buying is best sought after breaking the resistance level of 134.47, after which the road to 135.11 will open. The best option for entry to sell will be the 134.47 resistance level but with confirmation in the form of a false breakout and a change in the structure on the lower time frames.

Alternative scenario:

if the price fixes below the 133.11 support level, the downtrend will be resumed with a high probability.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3471
• Prev. Close: 1.3539
• % chg. over the last day: +0.50%

The Canadian dollar suffers because of falling crude oil prices. Oil is Canada’s key export commodity, making the Canadian economy sensitive to oil price fluctuations. The Canadian dollar fell in value against the US dollar on Friday, continuing losses that began early last week. WTI crude oil decreased by 5.5% last week, its worst five-day decline since mid-March. But analysts still believe oil prices will rebound ahead of summer as demand rises and supply may fall short, given that crude inventories are low and OPEC+ announced a surprise cut last month amid waning global growth prospects.

Trading recommendations

• Support levels: 1.3438,1.3448,1.3409,1.3341,1.3267
• Resistance levels: 1.3563,1.3616,1.3644

From the point of view of technical analysis, the trend on the USD/CAD currency pair has changed to bullish. The price is trading above the moving averages and is confidently breaking through the resistance levels. The MACD indicator is in the positive zone, and the buyer’s pressure remains, but there are the first signs of divergence, which increases the probability of a corrective movement. Buy trades are better to look for after a small pullback from the support level of 1.3483 but with confirmation. It is better to look for sell positions from the 1.3563 resistance level, but only with a confirmation in the form of a false breakout.

Alternative scenario:

if the price breaks out and consolidates below the support level of 1.3409, the downtrend will likely resume.