The Analytical Overview of the Main Currency Pairs on 2023.06.28

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0905
• Prev. Close: 1.0960
• % chg. over the last day: +0.50%

European Central Bank President Christine Lagarde said on Tuesday that inflation is still too high and it is too early to stop raising rates. The hawkish comments of the ECB president at the Central Bank symposium in Sintra, as well as positive US data, put pressure on the dollar yesterday. Heads of other central banks are expected to speak today, including a speech by the head of the US Federal Reserve. Powell’s hawkish rhetoric on further rate hikes may give confidence back to the dollar index.

Trading recommendations

• Support levels: 1.0911,1.0845,1.0785,1.0719,1.0688,1.0659,1.0634
• Resistance levels: 1.0968,1.0995,1.1185

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is trading at the resistance level. The MACD indicator is positive again, but buyer pressure is weak. Under such market conditions, buy trades can be considered from the support level of 1.0911, but there is also a probability of falling to 1.0785. Sell positions can be considered from the resistance level of 1.0968 but with confirmation in the form of reverse initiative.

Alternative scenario:

if the price breaks through the support level of 1.0845 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2706
• Prev. Close: 1.2747
• % chg. over the last day: +0.32%

Today, the head of the Bank of England, Andrew Bailey, will speak at the central bank forum. Bailey’s speech, in many ways, may affect the price of the British pound. As the UK continues to struggle with rampant inflation, there are reports that the government may not implement the recommendations to raise public sector wages. This could trigger a new wave of strikes. There is also information that the UK will have to give up tax cuts this year as this will spur demand and consumption growth and increase inflation.

Trading recommendations

• Support levels: 1.2677,1.2627,1.2539,1.2486,1.2421,1.2391,1.2349
• Resistance levels: 1.2801,1.2991

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price forms a wide-volatile corridor with slight signs of bearish pressure. The MACD indicator has become inactive. The most optimal level to buy is the level of 1.2677 but with confirmation. Sell deals are best considered from the resistance level of 1.2801 but also with confirmation since the level has already been tested.

Alternative scenario:

if the price breaks through the support level 1.2627 and fixes below it, the downtrend will most likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 143.45
• Prev. Close: 144.06
• % chg. over the last day: +0.42%

The situation with JPY remains the same. As the Bank of Japan maintains its soft monetary policy, while central banks around the world are on the path of raising interest rates to combat stubbornly high inflation, the Japanese yen remains under pressure. The only factor strengthening the yen could be the intervention of the Bank of Japan. The USD/JPY is just around the price level where the Japanese government can intervene again. A step with removing yield curve controls is also possible, but at the moment, such a scenario is unlikely.

Trading recommendations

• Support levels: 143.66,143.27,142.37,141.60,141.23,140.16,139.85,
• Resistance levels: 145.16

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is slowly but surely going up. The MACD indicator is in the positive zone, but the divergence becomes stronger. The most suitable level for buy deals is 143.66 but with confirmation on the lower time frames. Sell trades can be considered from the resistance level of 145.16 but with confirmation in the form of a bearish initiative.

Alternative scenario:

if the price fixes below the 141.60 support level, with a high probability the downtrend will resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3145
• Prev. Close: 1.3191
• % chg. over the last day: +0.35%

Inflationary pressures in Canada continue to decline. Inflation in Canada has slowed to its lowest level in two years. The Consumer Price Index fell from 4.4% to 3.4% year-over-year for May. Core inflation (which excludes food and energy prices) declined from 4.1% to 3.7%. The slowdown in price growth in May is a welcome change for the Bank of Canada, but policymakers could still resort to another rate hike in July if the gross domestic product (GDP) and jobs indicators point to an overheated economy.

Trading recommendations

• Support levels: 1.3145,1.3098
• Resistance levels: 1.3224,1.3246,1.3317,1.3357,1.3384,1.3461,1.3503

From the point of view of technical analysis, the trend on the USD/CAD currency pair in the medium term is bearish, but there are prerequisites for a reversal. The price is trading above the moving averages. The MACD indicator has become positive, and the buyers’ pressure is increasing. It is better to buy from the level of 1.3145 but with confirmation on the lower time frames in the form of buyers’ reactions to the level. Sell deals are best sought from the resistance level of 1.3224 or 1.3246 but with confirmation in the form of a reverse initiative.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 1.3246, the uptrend will resume with a high probability.