The Analytical Overview of the Main Currency Pairs on 2021.12.22

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1277
• Prev. Close: 1.1285
• % chg. over the last day: +0.07%

The ECB balance sheet continues to grow steadily. Yesterday, the balance reached a new absolute record of €8,511.5 trillion. However, it should be noted that the increase was by €14.8 billion against the increase of €26.7 billion a week earlier, which indicates a temporary volume contraction. This could provide short-term support for the European currency.

Trading recommendations

• Support levels: 1.1243,1.1230,1.1168
• Resistance levels: 1.1323,1.1360,1.1436,1.1535,1.1613,1.1667,1.1717

From a technical point of view, the EUR/USD on the hour time frame is still bearish. The MACD indicator has become inactive. The price is trading in the corridors, both on the higher time frames and on the lower ones. These are complex conditions for trading. It is better to consider sell deals from the resistance level of 1.1323. Buy trades can be considered on the lower time frames from the support level of 1.1243, but only with additional confirmation.

Alternative scenario:

if the price breaks out through the 1.1360 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: 1.3207
• Prev. Close: 1.3268
• % chg. over the last day: +0.46%

The British currency is supported by rising oil prices as well as the monetary policy of the Bank of England, which has already raised the interest rate and intends to start reducing its stimulus program as the wave of “Omicron” decreases.

Trading recommendations

• Support levels: 1.3220
• Resistance levels: 1.3272,1.3301,1.3365,1.3434,1.3507,1.3575,1.3685

On the hourly time frame, the trend on GBP/USD is still bullish. The price is trading near the moving average. The MACD indicator is in the positive zone with no signs of reversal. Under such market conditions, traders should consider buy positions from the 1.3220 support level but only with additional confirmation in the form of a buyers’ initiative. Sell trades can be considered from the resistance level of 1.3301.

Alternative scenario:

if the price breaks down through the 1.3189 support level and consolidates below, the bearish scenario will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 113.54
• Prev. Close: 114.08
• % chg. over the last day: +0.47%

The minutes of the monetary policy meeting of the Bank of Japan showed that, in general, the weakening yen is having a positive effect on the Japanese economy. From a fundamental point of view, the situation on the USD/JPY currency pair remains the same. The monetary policy of the Bank of Japan is aimed at active economic stimulation, while the US Federal Reserve, on the contrary, accelerated the reduction of the quantitative easing program last week. Such a situation is in favor of further growth of USD/JPY quotes.

Trading recommendations

• Support levels: 113.95,113.76,113.30,112.62,112.30
• Resistance levels: 114.17,115.15,115.50

The global trend on the USD/JPY currency pair is bearish. But the price has once again reached the priority change level, and this time the sellers’ reaction is much weaker. The probability of breakout is increasing. Buy positions should be considered from the 113.30 support level, but with additional confirmation in the form of a buyers’ initiative or after the price breaks out the priority change level. Sell positions should be considered if the price makes a false breakout of 114.17 level and returns back to the wide corridor with the 113.30-114.17 price range.

Alternative scenario:

if the price rises above 114.17, the uptrend will likely resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2936
• Prev. Close: 1.2912
• % chg. over the last day: -0.19%

Positive retail sales data and rising oil prices are now supporting the Canadian currency. Currently, the dollar index is stable as concerns about the Omicron strain are easing. From the fundamental point of view, this situation leads to the fact that the USD/CAD quotes do not have a single dynamic.

Trading recommendations

• Support levels: 1.2828,1.2721,1.2677,1.2638
• Resistance levels: 1.2918,1.2951

From a technical point of view, the USD/CAD currency pair trend is bullish. The MACD indicator has become inactive. Under such market conditions, it is better to look for buy deals from the support levels near the moving average on the lower time frames. Sell deals should be considered from the resistance level of 1.2918, but with additional confirmation in the form of a sellers’ initiative.

Alternative scenario:

if the price breaks down through the 1.2783 support level and fixes below, the downtrend will likely resume.