The Analytical Overview of the Main Currency Pairs on 2023.04.11

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0898
• Prev. Close: 1.0859
• % chg. over the last day: -0.35%

The odds of a 0.25% Fed interest rate hike at the May meeting are increasing daily. Back on Friday, before the Nonfarm report, this probability was 60%. After the strong labor report, the probability increased to 70%. On Monday, the probability reached 80% at the end of the trading day. The re-evaluation came as Treasury yields rose to their highest level in the last days and also as the dollar index rallied.

Trading recommendations

• Support levels: 1.0839,1.0802,1.0770,1.0680,1.0519,1.0482
• Resistance levels: 1.0898,1.0937,1.0924,1.0988,1.1032

The trend on the EUR/USD currency pair on the hourly time frame is still bullish. The price has corrected to the support levels. The MACD indicator has become negative, but inside the day, there is buying pressure back. Buy trades are best considered from the support level of 1.0839, but only with a confirmation in the form of a false breakdown, as the level has already been tested. Sell positions can be considered from the resistance level of 1.0898 or 1.0937, but only if there is a reverse reaction.

Alternative scenario:

if the price breaks down through the support level of 1.0770 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2419
• Prev. Close: 1.2381
• % chg. over the last day: -0.31%

Major UK economic data will be released later this week. Until Thursday, the British pound will be directly dependent on the US dollar. Wednesday will see the US inflation report, and later in the day, the FOMC minutes for March will be released. These two reports will give clues as to the US Fed’s future policy. Lower inflation, along with hawkish FOMC minutes, may add to the dollar’s confidence, leading to a decline in the GBP/USD quotes.

Trading recommendations

• Support levels: 1.2359,1.2320,1.2267,1.2178,1.2112,1.2009,1.1963
• Resistance levels: 1.2410,1.2519

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The MACD indicator is in the negative zone, but sellers’ pressure is weak. Under such market conditions, it is best to buy from the support level of 1.2359 or 1.2320, but with confirmation in the form of reverse initiative. Sell trades are best looked for on intraday time frames from a resistance level of 1.2410, but with confirmation and with short targets.

Alternative scenario:

if the price breaks down through the 1.2267 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 132.12
• Prev. Close: 133.59
• % chg. over the last day: +1.11%

There has been an official change of Governor of the Bank of Japan. The new BoJ Governor, Kazuo Ueda, indicated yesterday that he would continue the wide-ranging monetary policy easing undertaken by the previous management. The Japanese yen is once again under a sell-off. Investors had expected that the new management would start its policy toward normalization. But at the moment, inflation in the country is falling, and economic indicators point to an economic recovery. There is no reason for the Bank of Japan to change its monetary policy radically. So, there are no fundamentals for the Japanese yen to strengthen right now.

Trading recommendations

• Support levels: 132.85,132.48,131.82,130.62
• Resistance levels: 133.74,135.11,136.07,137.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The MACD indicator is in the positive zone, and there is buying pressure inside the day. Now the price has deviated strongly from the moving averages, so it is better to wait for a downward correction wave to buy. Sell deals can be sought from the resistance level of 133.74, but only with additional confirmation on the lower time frames and short targets.

Alternative scenario:

if the price fixes below the 131.82 support level, the downtrend will be resumed with a high probability.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3514
• Prev. Close: 1.3508
• % chg. over the last day: -0.04%

Bank of Canada Deputy Governor Tony Gravel said in a speech last week that the Canadian banking sector has a well-deserved reputation for stability on the world stage, which means policymakers are more concerned about inflation and the state of the economy. The latest economic data indicates that the economy is picking up, and inflation is falling. But if oil prices continue to rise, it could trigger a new wave of inflationary pressure. It is for this reason that policymakers are keeping the door open for possible further hikes. According to bank reports, the Canadian currency is expected to strengthen during the year amid forecasts that the export-driven economy will avoid a sharp fall and that the US dollar will decline as the exchange rate differential with its peers narrows.

Trading recommendations

• Support levels: 1.3501,1.3456,1.3400
• Resistance levels: 1.3536,1.3563,1.3616,1.3644,1.3694,1.3722,1.3786

From the point of view of technical analysis, the trend on the USD/CAD currency pair is still bearish. Yesterday the price tested the priority change level but failed to consolidate higher. The MACD indicator became negative again. Under such market conditions, buy deals are best sought from the support level of 1.3501 but with confirmation on the lower time frames. Sell positions can be sought from the resistance level of 1.3536, but only with confirmation in the form of reverse initiative. Selling will also be appropriate in case of an impulsive breakdown of the upward trend line.

Alternative scenario:

if the price breaks out and consolidates above the resistance level of 1.3536, the uptrend will likely resume.