The Analytical Overview of the Main Currency Pairs on 2021.10.11

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1551
• Prev. Close: 1.1574
• % chg. over the last day: +0.20%

Europe may face gas shortages this winter if cold weather exhausts reserves to zero, making the region completely dependent on additional flows from Russia. In turn, some European politicians blame Russia for the low volume of gas stored in the region, which has led to record increases in gas and electricity prices.

Trading recommendations

• Support levels: 1.1502,1.1453
• Resistance levels: 1.1583,1.1671,1.1717,1.1772,1.1802,1.1835

From the technical point of view, the EUR/USD trend is bearish. The MACD has become positive. Under such market conditions, traders should consider sell deals from the resistance levels near the moving average, as the price has deviated from the middle line. Buy trades should be considered only from the support levels with additional confirmation in the form of a buyers’ initiative.

Alternative scenario:

if the price breaks out through the 1.1671 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: 1.3606
• Prev. Close: 1.3611
• % chg. over the last day: +0.04%

In addition to problems with truck drivers, Britain also faces a pilot shortage, which can prevent the resumption of the travel industry after hundreds of airline crew retired or changed careers during the pandemic. Britain’s business secretary, Kwasi Kwarteng, says that inflation is a concern, but the country’s central bank will do its best to keep it at a moderate level.

Trading recommendations

• Support levels: 1.3532,1.3457,1.3360,1.3282
• Resistance levels: 1.3639,1.3685,1.3759,1.3812,1.3886

On the hourly time frame, the GBP/USD trend is bearish. But the British currency looks more confident than the euro due to a direct correlation with oil prices. The MACD indicator is in the positive zone but with signs of divergence. There are also signs of narrowing liquidity in the form of a triangle pattern. Buy trades should be considered only within the day and only after the buyer’s initiative upward from the triangle. It is best to look for sell trades after the price breaks down the triangle.

Alternative scenario:

if the price breaks out through the 1.3759 resistance level and consolidates above, the bullish scenario will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 111.61
• Prev. Close: 112.21
• % chg. over the last day: +0.53%

Japan’s new Prime Minister, Fumio Kishida, says he has no plans to change capital gains and dividend taxes, as he intends to take other steps to distribute wealth better, such as raising healthcare workers’ salaries. The Japanese yen was declining all week as investors were concerned that the new prime minister may go ahead with a capital gains tax hike and move away from the investor-friendly economic policies conducted by Japanese Prime Minister Shinzo Abe from 2013 to 2020.

Trading recommendations

• Support levels: 112.19,111.53,110.99,110.65,109.95,109.63
• Resistance levels: 113.35

The main trend of the USD/JPY currency pair is bullish. The Japanese yen is rapidly declining against the US dollar; the last time such a price was in April 2019. The MACD indicator is positive again, and there are signs of overbuying but no signs of reversal. Under such market conditions, it’s better to look for buy positions from the support levels near the moving average, as the price has deviated strongly from the average line. Sell positions should be considered only throughout the day from the resistance levels, given there is sellers’ initiative.

Alternative scenario:

if the price falls below 110.99, the uptrend is likely to be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2546
• Prev. Close: 1.2470
• % chg. over the last day: -0.61%

The Canadian dollar is a commodity currency, so USD/CAD is highly dependent on the dynamics of the dollar index and oil prices. The dollar index declined on Friday. Oil prices hit a new price record of $80 a barrel for the first time since 2014. Canada’s unemployment rate decreased from 7.1% to 6.9%, and the number of jobs increased by 157.1k (expected 59.2k). As a result, USD/CAD quotes continued to decline due to the strengthening of the Canadian currency.

Trading recommendations

• Support levels: 1.2425
• Resistance levels: 1.2518,1.2565,1.2628,1.2729,1.2774,1.2891

From the technical point of view, the trend of the USD/CAD currency pair is bearish. Liquidity compression occurred in the direction of sales. The downtrend has accelerated. But the MACD indicator is in the oversold zone, and there are signs of divergence on higher timeframes. Under such market conditions, it is better to look for sell deals from the resistance levels near the moving average, as the price has strongly deviated from the average values. Buy trades should be considered only on lower timeframes from the resistance levels, given there is a buyers’ initiative.

Alternative scenario:

if the price breaks out through the 1.2628 resistance level and fixes above, the uptrend will likely resume.