The Analytical Overview of the Main Currency Pairs on 2021.09.01

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1796
• Prev. Close: 1.1808
• % chg. over the last day: +0.10%

The inflation rate in Europe increased to 3% on a year-on-year basis, which is much higher than the target indicator of the European Central Bank of 2%. The new ECB program implies some deviation from the target, but what kind of deviation is acceptable and what is not – it’s all up to the officials. Therefore, a 50% jump in prices might cause some concern for investors as the central bank might start taking action to suppress inflation.

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 tried to break through the priority change level, but failed to consolidate higher. 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: 1.3759
• Prev. Close: 1.3755
• % chg. over the last day: -0.03%

In July, The UK consumer credit did not increase for the first time since February, indicating a slowing recovery from the crisis. Business confidence reached a four-year high, but companies expressed concerns about staff shortages, which could eventually lead to wage increases in the coming months.

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. The MACD indicator became negative. 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: 109.92
• Prev. Close: 109.98
• % chg. over the last day: +0.05%

Japan is still struggling with an outbreak of infection. Many regions have suspended vaccination because of the problems with the Moderna vaccine. Moreover, a group of Japanese researchers have discovered a new mutation of the Delta strain. Japan’s economic situation is complicated before the election of a new prime minister.

Trading recommendations

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

The main trend of the USD/JPY currency pair is bullish. Due to the strengthening of the dollar index, the price managed to break above the flat structures yesterday. The MACD indicator has become positive. 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 the lower time frames 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: 1.2601
• Prev. Close: 1.2612
• % chg. over the last day: +0.09%

Canada’s growth indicators data turned out to be disappointing: GDP unexpectedly decreased by 0.3% in the last quarter. 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. Yesterday, the dollar index slightly strengthened, while oil remained at the same level. As a result, the USD/CAD currency pair restored it’s position.

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. The price was testing the priority change level yesterday. But it couldn’t break through the level, and failed to consolidate below. A false breakdown zone was formed. It is better to look for buy positions from the priority change level where 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.