The Analytical Overview of the Main Currency Pairs on 2021.10.26

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1639
• Prev. Close: 1.1610
• % chg. over the last day: -0.25%

Germany’s business climate index continues to decline. Against the background of rising prices, the weakness spread to the service sector. Data from the Ifo Institute indicates that the index was 97.7 (forecast 98.2, previous 98.9). Germany’s economic growth is likely to slow significantly in the 4th quarter.

Trading recommendations

• Support levels: 1.1580,1.1548,1.1502,1.1453
• Resistance levels: 1.1616,1.1655,1.1671,1.1717,1.1772,1.1802,1.1835

From the technical point of view, the EUR/USD on the hour timeframe is bullish, but the price fell sharply yesterday amid the rising dollar index and approached the priority change level. The MACD indicator has become negative. Under such market conditions, traders should consider buying positions from the priority change level, but after an additional confirmation in the form of a buyers’ initiative. It is best to look for sell trades from the resistance levels above the moving average.

Alternative scenario:

if the price breaks down through the 1.1580 support level and fixes below, the mid-term uptrend will likely be broken.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3736
• Prev. Close: 1.3764
• % chg. over the last day: -0.20%

Fitch Ratings believes that the UK inflation rate will reach 4.3% by the end of 2021 and peak above 5% next April. Global manufacturing pressure on the supply chain is pushing core commodity prices higher.

Trading recommendations

• Support levels: 1.3736,1.3685,1.3648,1.3617,1.3532,1.3457,1.3360
• Resistance levels: 1.3831,1.3886

On the hourly time frame, the GBP/USD trend is bullish. The British currency looks more confident than Euro due to its direct correlation with oil prices. The MACD indicator has become inactive. Buy trades should be considered only within the day and only from the initiative zone of the buyers. It is better to look for sell deals from the resistance levels on the higher timeframe, but after an additional confirmation in the form of a sellers’ initiative.

Alternative scenario:

if the price breaks down through the 1.3685 support level and consolidates below, the bullish scenario will likely be broken.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 113.51
• Prev. Close: 113.71
• % chg. over the last day: +0.18%

On Tuesday, Japanese Prime Minister Fumio Kishida said that he had instructed the government’s economic policy group to prepare urgent proposals by early November to specify his vision of the “new capitalism.” Proposals should include the promotion of advanced technologies for digitalization and decarbonization and economic security issues, including securing the supply of semiconductors as top priorities. The Minister of Economy of Japan said the government is preparing help for people and sectors affected by the pandemic.

Trading recommendations

• Support levels: 113.42,112.30,111.53,110.99,110.65
• Resistance levels: 114.48,115.15

The main trend of the USD/JPY currency pair is bullish. The price corrected in the moving average area to the resistance level, where the rebound took place. The price has now broken through the local downtrend line, indicating the growing pressure of buyers. The MACD indicator has become inactive. Under such market conditions, it’s better to look for buy positions from the buyers’ initiative zones on the lower timeframes. Sell positions should be considered from the resistance levels of a higher timeframe, given sellers’ initiative.

Alternative scenario:

if the price falls below 112.30, the uptrend is likely to be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2363
• Prev. Close: 1.2379
• % chg. over the last day: +0.13%

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 increased yesterday, while oil slightly decreased. As a result, the USD/CAD currency pair has risen slightly due to the strengthening of the US currency.

Trading recommendations

• Support levels: 1.2306,1.2260
• Resistance levels: 1.24251.2518,1.2565,1.2628,1.2729,1.2774

From the technical point of view, the trend of the USD/CAD currency pair is bearish. The price is once again beginning to show a narrowing of liquidity in the form of a triangle. Under such market conditions, it is better to look for sell deals from the resistance levels above the moving average. Buy trades should be considered only on lower time frames from the initiative zone of buyers or from support levels of a higher timeframe.

Alternative scenario:

if the price breaks through and consolidates above 1.2518, the uptrend will likely resume.