The Analytical Overview of the Main Currency Pairs on 2021.08.31

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1792
• Prev. Close: 1.1796
• % chg. over the last day: +0.03%

In Germany, inflation jumped to a 13-year high of 3.4%. Companies are struggling with supply shortages, which is putting pressure on prices. Other European countries will also report on the level of inflation today. Economists expect consumer prices to reach 2.7% on a year-on-year basis in Europe, which is significantly higher than the 2% target of the ECB.

Trading recommendations

• Support levels: 1.1799,1.1759,1.1704,1.1620
• Resistance levels: 1.1817,1.1854,1.1894,1.1934,1.1969

From a technical point of view, the general trend of the EUR/USD currency pair is bearish. But the price is trading above the moving average and has approached the priority change level. The MACD is signaling a divergence in the opposite direction. Under such market conditions, it is best to look for sell trades from the resistance levels, where sellers show initiative. Buy trades can be considered only after a pullback or after a breakthrough of the priority change level.

Alternative scenario:

if the price breaks through the 1.1817 resistance level and fixes above, the mid-term uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3755
• Prev. Close: 1.3756
• % chg. over the last day: +0.01%

There was a bank holiday in the UK yesterday, so the pound sterling maintained its position amid the stabilization of the dollar index. Today, at the opening of trading, the dollar index is slightly decreasing, which plays in favor of the British currency strengthening. But the divergence on the technical indicators shows that there is a possibility of a temporary decline.

Trading recommendations

• Support levels: 1.3741,1.3692,1.3632,1.3614,1.3525
• Resistance levels: 1.3793,1.3772,1.3886,1.3935,1.4002

On the hourly time frame, the GBP/USD trend is bearish but the price is trading above the moving average; the local trend is upward. The MACD indicator became positive, but there is a divergence on the higher timeframe, which indicates an impending downward movement. Under such market conditions, it is better to look for sell trades from the resistance level, where sellers show initiative. Buy positions can be considered only with short targets throughout the day.

Alternative scenario:

if the price breaks through the 1.3885 resistance level and consolidates above, the bullish scenario will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 109.80
• Prev. Close: 109.91
• % chg. over the last day: +0.10%

Japan’s unemployment rate fell to 2.8% (previous - 2.9%). But industrial production decreased in July, which is not surprising since the surge of the Delta strain made the government introduce restrictions that caused interruptions in supply chains, especially semiconductor products and components for automakers.

Trading recommendations

• Support levels: 109.43,109.19,108.65
• Resistance levels: 110.11,110.34,110.66,110.95,111.48

The main trend of the USD/JPY currency pair is bullish. The price is now trading in a wide corridor with the range of 109.43-110.11, inside which other smaller fled structures are formed. The MACD indicator has become inactive again. Under such market conditions, traders should look for buy trades from the support level, where the buyers show initiative. Sell positions should be considered only on lower timeframes from the resistance levels with short targets.

Alternative scenario:

if the price falls below 109.18, the uptrend is likely to be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2615
• Prev. Close: 1.2604
• % chg. over the last day: -0.09%

The Canadian dollar is a commodity currency, so the USD/CAD currency pair is highly dependent on the dynamics of the dollar index and oil prices. The dollar index is slowly decreasing, while oil is increasing. As a result, the USD/CAD currency pair is declining, which increases the probability of priority change. Canada will report its GDP for the quarter today.

Trading recommendations

• Support levels: 1.2602,1.2554
• Resistance levels: 1.2656,1.2713,1.2812,1.2891,1.2951

In terms of technical analysis, the USD/CAD trend is still bullish but the price returned to the priority change level. The probability of a breakthrough of the support level is increasing. It is better to look for buy positions from the priority change level but after buyers show initiative. Sell positions can be considered from the resistance levels, or after the breakthrough of the 1.2602 support level.

Alternative scenario:

if the price breaks through the 1.2602 support level and fixes below, the uptrend will likely be broken.