The Analytical Overview of the Main Currency Pairs on 2023.07.07

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0852
• Prev. Close: 1.0891
• % chg. over the last day: +0.35%

The Nonfarm payroll data will be released today. Economists forecast that the US economy will add 200,000 jobs in June. The unemployment rate is expected to be 3.6% (now 3.7%), and average hourly earnings are expected to be up by 0.3%. Signs of continued strength in the labor market will strengthen the US Fed’s stance on further policy tightening. For the US Fed to stop raising rates, the Central Bank first wants to see a decline in labor market activity and falling average wages. Therefore, strong labor market data will be positive for the dollar and negative for other risky assets like the euro and the pound.

Trading recommendations

• Support levels: 1.0834,1.0795,1.0719,1.0688,1.0659,1.0634
• Resistance levels: 1.0901,1.0933,1.0976,1.0995,1.1185

The trend on the EUR/USD currency pair on the hourly time frame is still bullish. The price again failed to consolidate below the priority change level. A wide-volatile flat is forming now. The MACD indicator has become positive. Inside the day, the bias has become bullish. Under such market conditions, buy trades can be considered from the support level of 1.0834 but with an additional confirmation in the form of a false breakdown, as the level has already been tested. Sell deals can be considered from the resistance level of 1.0901 or 1.0933 but with confirmation in the form of a bearish initiative.

Alternative scenario:

if the price breaks through the support level of 1.0834 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2693
• Prev. Close: 1.27471.2738
• % chg. over the last day: +0.35%

The UK construction PMI declined from 51.6 to 48.9. The level of 50 separates growth from contraction, so business activity in the construction sector has started to contract. A more detailed report showed that a sharp and accelerated downturn in housing construction had affected the overall workload. The latest data also showed a decline in new orders for the first time since January. On a more positive note, lower demand and supply bottlenecks led to a sharp improvement in the timing of construction deliveries. But despite the decline in business activity, the British pound strengthened yesterday. The growth of the British pound is supported by the Bank of England’s intention to raise interest rates to 6%.

Trading recommendations

• Support levels: 1.2646,1.2583,1.2539,1.2486,1.2421,1.2391,1.2349
• Resistance levels: 1.2762,1.2836

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. But yesterday, the price made a false breakout of the resistance level and changed the structure on the lower time frames to the downside. There is a high probability of a corrective movement. The most optimal level to buy is the level of 1.2646 but with confirmation. Sell deals are best considered from the resistance level of 1.2762, but also with confirmation on the lower time frames in the form of reverse initiative.

Alternative scenario:

if the price breaks through the support level 1.2583 and fixes below it, the downtrend will most likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 144.54
• Prev. Close: 144.05
• % chg. over the last day: -0.34%

The Japanese yen is under pressure again. Yesterday the representative of the Bank of Japan Uchida said that there is a long way to go before the repeal of the negative rate, and this decision will be tantamount to a 0.1% rate hike. Short positions on the Japanese currency have returned among investors as falling treasuries encourage investors to sell the yen in favor of the higher-yielding dollar. The yen is among the top 10 worst-performing currencies this year after falling 9% against the US dollar. But a drop in the yen into the 145-150 yen-dollar range could lead to intervention, as Japanese policymakers have repeatedly warned.

Trading recommendations

• Support levels: 143.66,143.27,142.37,141.60,141.23,140.16,139.85,
• Resistance levels: 144.50,144.72,145.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. But the price is trading below the moving averages. Sellers again intercept the initiative within the day. The MACD indicator is still in the negative zone. The most suitable level for buy deals will be 143.66 or 143.27 in case of a deeper correction, but with confirmation since the levels have already been tested. Sell trades can be considered from the resistance level of 144.50, but also with confirmation on the lower time frames.

Alternative scenario:

if the price fixes below the 143.27 support level, with a high probability the downtrend will resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3277
• Prev. Close: 1.3367
• % chg. over the last day: +0.68%

Canadian goods imports rose by 3.0% in May, and exports declined by 3.8%. As imports and exports show swings in opposite directions, Canada’s trade balance increased from a surplus of $894 million in April to a deficit of $3.4 billion in May, the most significant deficit since October 2020. This is a negative for the Canadian currency. Oil is also getting cheaper, leading to Canadian weakness. Therefore, against the background of the dollar index growth, the USD/CAD quotes are now steadily rising.

Trading recommendations

• Support levels: 1.3290,1.3243,1.3184,1.3145,1.3116
• Resistance levels: 1.3354,1.3383,1.3426,1.3461,1.3503

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price has resumed growth and is trading above the moving averages. The MACD indicator is in the positive zone, and the buyers’ pressure remains. It is best to look for buy deals from the 1.3290 level but with confirmation on the lower time frames in the form of buyers’ reactions to the level. Sell deals are best to look for on intraday time frames from 1.3354 or 1.3383 but with confirmation in the form of sellers’ initiative and structure change on the lower time frames.

Alternative scenario:

if the price breaks through and consolidates below the support level of 1.3116, the downtrend will resume with a high probability.