The Analytical Overview of the Main Currency Pairs on 2022.01.17

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1454
• Prev. Close: 1.1414
• % chg. over the last day: -0.35%

France’s Consumer Price Index reached 3.4% in annual terms, the highest level in 13 years. On Friday, ECB spokeswoman Schnabel said that the ECB would not raise interest rates too quickly since such a step risked slowing down the recovery of the Eurozone. It is very likely that the ECB will not raise interest rates until the end of 2022.

Trading recommendations

• Support levels: 1.1394,1.1369,1.1330,1.1305,1.1288,1.1271
• Resistance levels: 1.1436,1.1457,1.1514,1.1613,1.1667,1.1717

From a technical point of view, the EUR/USD on the hour time frame is bullish. But on Friday, a correctional movement began. The MACD indicator became negative. Under such market conditions, it is better to consider sell deals from the daily resistance level of 1.1436, but with additional confirmation. Buy trades can be considered on the lower time frames from the support level 1.1394 or 1.1369, but only with additional confirmation in the form of the buyers’ initiative.

Alternative scenario:

if the price breaks down through the 1.1369 support level and fixes below, the mid-term uptrend will be broken.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3707
• Prev. Close: 1.3673
• % chg. over the last day: -0.25%

The UK GDP increased by 0.9% in November relative to the previous month and exceeded the pre-pandemic level for the first time. British industrial production jumped by 1% in November, significantly exceeding the market forecasts. The statistics indicate that the UK economy is recovering even despite the high level of Omicron disease.

Trading recommendations

• Support levels: 1.3667,1.3633,1.3581,1.3551
• Resistance levels: 1.3708,1.3732,1.3753,1.3786

On the hourly time frame, the GBP/USD trend is bullish. But on Friday, a correctional movement began. The MACD indicator became negative. Under such market conditions, traders should consider buy positions from the support level of 1.3667 or 1.3633 but only with additional confirmation in the form of a buyers’ initiative. Sell trades can be considered on the lower time frames from the resistance level of 1.3708, but only with short targets.

Alternative scenario:

if the price breaks down through the 1.3633 support level and consolidates below, the bearish scenario will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 114.13
• Prev. Close: 114.18
• % chg. over the last day: +0.04%

Analysts at Morgan Stanley believe that the Bank of Japan’s existing forecast that price risk is “shifted towards lowering” may now be revised to “balanced.” But investors should still expect the BoJ to maintain its current policy. Other analysts emphasize the risk of worsening the Japanese economy as the country prepares to intensify the current wave of Omicron infection among the population, where almost no one has received the third vaccination. The likely imposition of restrictions on restaurants, bars, and other businesses could limit broad-based economic growth in the current quarter.

Trading recommendations

• Support levels: 114.40,113.99,113.72,114.18,113.95
• Resistance levels: 115.04,115.35,115.64

The global trend on the USD/JPY currency pair is bearish. However, on the back of the dollar index growth on Friday, the Japanese Yen started to decrease, which caused the quotes’ growth. Buy deals are best to look at the lower time frames near the support level of 113.99 or 113.72. Sell trades can be considered from the priority change level but only with confirmation in the form of a sellers’ initiative since the monetary policy of the Bank of Japan is now aimed at decreasing the Japanese yen.

Alternative scenario:

if the price fixes above 115.04, the uptrend will likely resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2511
• Prev. Close: 1.2546
• % chg. over the last day: +0.28%

The Canadian dollar is a commodity currency, so it depends not only on the monetary policy of the Bank of Canada but also on the oil prices and the dollar index. Both the dollar index and oil prices increased on Friday, which led to a slight increase in the USD/CAD quotes. From a fundamental point of view, both the Bank of Canada and the US Federal Reserve intend to raise interest rates soon, which will lead to a strengthening of both national currencies. Given that oil prices are balanced now, the USC/CAD quotes will show a wide corridor without any advantage from both currencies.

Trading recommendations

• Support levels: 1.2490,1.2427
• Resistance levels: 1.2558,1.2628,1.2678,1.2715

From a technical point of view, the USD/CAD currency pair is bearish. The price has found support on the higher time frame, the rebound occurred. The MACD indicator became positive. Under such market conditions, it is better to look for buy trades on the lower time frames from 1.2490 support level. Sell deals it is better to look from the resistance levels around the moving average.

Alternative scenario:

if the price breaks through the 1.2628 resistance level and fixes above, the downtrend is likely to be broken.