The Analytical Overview of the Main Currency Pairs on 2023.06.09

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0697
• Prev. Close: 1.0782
• % chg. over the last day: +0.79%

Initial jobless claims in the US unexpectedly rose from 233,000 to 261,000, the biggest jump since October 2021, indicating signs of a cooling in the labor market. The likelihood of a pause from the US Federal Reserve at the June meeting rose to 73%. The dollar index began to sell off, giving a boost to risky assets such as the euro and pound. According to Italian Central Bank Governor Mario Draghi, inflation in the Eurozone has been more resilient than initially anticipated by central banks. It will require a cautious continuation of monetary policy tightening through both further interest rate increases and an increase in the timing of their reversal.

Trading recommendations

• Support levels: 1.0718,1.0688,1.0659,1.0634
• Resistance levels: 1.0778,1.0800,1.0836,1.0875,1.0904,1.0956

The trend on the EUR/USD currency pair on the hourly time frame has changed to bullish. The price is trading above the moving averages. The MACD indicator has become positive, with no signs of reversal but with signs of overbought. Under such market conditions, buy trades can be considered from the support level of 1.0718, but only with additional confirmation on the lower timeframes. Sell positions can be considered from the resistance level of 1.0778 or 1.0800 but with confirmation in the form of a false breakout and a change of the structure on the lower time frames.

Alternative scenario:

if the price breaks through the support level of 1.0659 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2429
• Prev. Close: 1.2559
• % chg. over the last day: +1.05%

The UK and US on Thursday backed a new “Atlantic Declaration” for closer cooperation on pressing economic issues in areas such as clean energy, critical minerals, and artificial intelligence. The joint declaration describes the partnership as “the first of its kind,” covering a wide range of economic, technological, commercial, and trade relations between the two countries. Against the backdrop of Britain’s exit from the EU, such a move is positive for the economy.

Trading recommendations

• Support levels: 1.2477,1.2420,1.2391,1.2349
• Resistance levels: 1.2565,1.2612

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price is trading above the moving averages. The MACD indicator is in the positive zone with signs of bullish pressure. The best level to buy is 1.2477 but with confirmation. It is best to look for sell deals from the resistance level of 1.2565 but with a confirmation in the form of a false breakout and a change of the structure on the lower time frames.

Alternative scenario:

if the price breaks through the support level 1.2391 and fixes below it, the downtrend will most likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 140.07
• Prev. Close: 138.91
• % chg. over the last day: -0.84%

Uncertainty over the wage outlook and emerging global economic weakness raises the possibility that the Bank of Japan will postpone adjustments to its Yield Curve Control Policy (YCC) until at least the fall. With robust domestic demand offsetting some external headwinds, the BOJ is expected to raise its inflation forecasts for this year in its next quarterly review in July. A change in the yield cap on its own could do a lot of damage to the economy but would give investors a reason to buy the Japanese yen.

Trading recommendations

• Support levels: 138.94,138.80,138.00,137.54,136.52,135.66,135.15,134.67
• Resistance levels: 139.62,140.45,141.07

From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bullish, but it is close to changing. The price has reached the priority change level, but the buyers have shown interest. The MACD indicator is in the negative zone, and the pressure is neutral. The best way to buy is to use the support level of 138.94 but with confirmation on the lower time frames. Sell trades can be considered from the resistance level of 139.92 but with confirmation in the form of a bearish initiative.

Alternative scenario:

if the price fixes below the 138.80 support level, with a high probability the downtrend will resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3367
• Prev. Close: 1.3356
• % chg. over the last day: -0.08%

Bank of Canada Deputy Governor Paul Beaudry yesterday cited the factors that led to the Central Bank’s decision to raise the rate after a 4-month pause. The main factors are unexpectedly strong household spending, a recovery in the housing market, a tight labor market, and solid core inflation. Beaudry gave no hint in his speech that the Bank of Canada is thinking about its next meeting in July. But money markets estimate a 64% chance of another rate hike in July.

Trading recommendations

• Support levels: 1.3321,1.3300,1.3267
• Resistance levels: 1.3411,1.3504,1.3589,1.3647,1.3667,1.3695

From the point of view of technical analysis, the trend on the USD/CAD currency pair in the medium term is bearish. The price is trading at the level of moving averages, and a price corridor is forming. The MACD indicator has become inactive, and divergence on several time frames remains. It is better to buy from the support level of 1.3321, but only with a confirmation in the form of a false breakdown and a change of the structure on the lower timeframes. It is better to look for sell deals after a false breakout of the 1.3411 resistance level.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 1.3504, the uptrend will resume with a high probability.