The Analytical Overview of the Main Currency Pairs on 2023.07.10

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0884
• Prev. Close: 1.0967
• % chg. over the last day: +0.76%

Friday’s Nonfarm report showed that the US labor market remains robust, but there are early signs of a slowdown. Over the past month, the US economy added 209,000 jobs, less than the consensus estimate of 224,000. This is also a slowdown from the previous month’s reading, which was revised downward by 33,000 to 306,000. The unemployment rate fell from 3.7% to 3.6%. The report shows that the increase in jobs was accompanied by solid wage growth. Despite some signs of weakness, this data increases the likelihood that the US Federal Reserve will raise interest rates this month.

Trading recommendations

• Support levels: 1.0925,1.0869,1.0834,1.0795,1.0719,1.0688,1.0659,1.0634
• Resistance levels: 1.0976,1.0995,1.1185

The trend on the EUR/USD currency pair on the hourly time frame is still bullish. The price is trading above the moving averages. The MACD indicator is in the positive zone and shows no signs of divergence. One more upward wave is expected before a pullback. Under such market conditions, buy trades can be considered from the support level of 1.0925 but with additional confirmation on the lower time frames. Sell deals may be considered from the resistance level of 1.0976 or 1.0995 but with confirmation in the form of a bearish initiative.

Alternative scenario:

if the price breaks through the support level of 1.0869 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2731
• Prev. Close: 1.27471.2837
• % chg. over the last day: +0.83%

The Bank of England is hopeful that tomorrow’s labor market data will be positive. The Bank of England needs to raise rates further as the country’s inflation rate is the highest among advanced economies, with recent data showing consumer price stability. The Bank of England is expected to raise interest rates to 6% by the end of the year (the current level is 5%) and will keep the rate at that level for at least three quarters of 2024 to suppress inflation. But much will also depend on GDP, business activity, and labor market data.

Trading recommendations

• Support levels: 1.2762,1.2682,1.2646,1.2583,1.2539,1.2486,1.2421,1.2391,1.2349
• Resistance levels: 1.2848,1.2991

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price did not react to the false breakout area and continued the bullish trend. The MACD indicator is in the positive zone with no signs of divergence. The most optimal level to buy is 1.2762, but with confirmation. It is best to consider sell deals from the resistance level of 1.2848 but with confirmation on the lower time frames in the form of a change in the structure.

Alternative scenario:

if the price breaks through the support level 1.2682 and fixes below it, the downtrend will most likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 144.03
• Prev. Close: 142.10
• % chg. over the last day: -1.35%

This time, verbal interventions from Japanese government officials were able to stop the yen’s fall. A Tankan survey showed that business inflation expectations would remain above 2% for the next three years, and the wage data was twice what was expected. All these factors contributed to closing positions against the yen, which temporarily strengthened the Japanese currency against the dollar. However, traders should not forget that the monetary policy vector of the BoJ is going in a different direction, which taking into consideration the interest rates differential, shows that fundamentally the JPY does not have any factor for appreciation.

Trading recommendations

• Support levels: 142.08,141.42,140.16,139.85,
• Resistance levels: 143.66,144.50,144.72,145.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is in a downtrend now, as the price has broken through the priority change level and is trading below the moving averages. The MACD indicator is in the negative zone with no signs of divergence, so another wave of decline is not excluded. The most suitable level to buy would be 142.08 or 141.42 in a deeper correction, but with confirmation, as the levels have already been tested. Sell trades can be considered from the resistance level of 143.66, but also with confirmation on the lower time frames.

Alternative scenario:

if the price fixes above the 144.50 resistance level, with a high probability, the uptrend will resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3363
• Prev. Close: 1.3276
• % chg. over the last day: -0.66%

Canadian labor market data was mixed. Behind an impressive gain in employment of 60k, there are signs of a weakening in wage growth. At the same time, the unemployment rate rose from 5.2% to 5.4%. Overall, the data indicate that the labor market is still resilient, though the margin of that resilience is gradually shrinking. But it will be enough for another 0.25% rate hike at Wednesday’s Bank of Canada meeting.

Trading recommendations

• Support levels: 1.3243,1.3184,1.3145,1.3116
• Resistance levels: 1.3329,1.3383,1.3426,1.3461,1.3503

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is correcting to the nearest support level. The MACD indicator became negative. Within the day, there is sellers’ pressure. It is better to buy from the 1.3242 support level but with confirmation on the lower time frames in the form of buyers’ reactions to the level. Sell trades are best looked for on intraday time frames from the moving averages or from the 1.3329 resistance level but with confirmation in the form of sellers’ initiative.

Alternative scenario:

if the price breaks through and consolidates below the support level of 1.3202, the downtrend will resume with a high probability.