The Analytical Overview of the Main Currency Pairs on 2022.02.01

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1142
• Prev. Close: 1.1232
• % chg. over the last day: +0.80%

The Fed comments seem to have lowered the probability of a 50 basis point hike in March, with three rate hikes planned for 2022, rather than the 4-5 forecasted by analysts. As a result of these statements, the dollar index fell sharply, pushing major currencies higher against the dollar, especially the euro.

Trading recommendations

• Support levels: 1.1183,1.1121
• Resistance levels: 1.1243,1.1277,1.1308

From a technical point of view, the EUR/USD on the hour time frame is bearish. However, yesterday, the price showed rapid local growth and is approaching the priority change level. Under such market conditions, it is better to consider sell trades from the resistance levels of 1.1243 or 1.1277. There are no optimal entry points for buy deals now.

Alternative scenario:

if the price breaks out through the 1.1277 resistance level and fixes above, the mid-term uptrend will be renewed.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3390
• Prev. Close: 1.3444
• % chg. over the last day: +0.40%

On Thursday, the Bank of England will hold its meeting this week, where analysts forecast a 0.25% interest rate hike. Such a move will directly support the British pound, but before that time, the price may show another wave of decline amid the fact that the interbank lending market has seen a rise in dollar rates, indicating investor interest in the US currency.

Trading recommendations

• Support levels: 1.3415,1.3352
• Resistance levels: 1.3468,1.3524,1.3583,1.3633,1.3662

On the hourly time frame, the trend on GBP/USD is bearish. The MACD indicator became positive, but the growth dynamic of quotes is weak. Under such market conditions, sell deals are best to look at from the resistance levels of 1.3468. Buy trades should be considered from the support level of 1.3352, but only with an additional confirmation in the form of buyers’ initiative.

Alternative scenario:

if the price breaks out through the 1.3524 resistance level and consolidates above, the bearish scenario will be broken.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 115.25
• Prev. Close: 115.13
• % chg. over the last day: -0.10%

On Friday, Bank of Japan Governor Haruhiko Kuroda said that it was premature to raise the bank’s target rate. The monetary policy of the Bank of Japan is now aimed at making the Japanese Yen cheaper because of the maximum economic stimulus, while the Fed is tightening monetary policy. Japan’s unemployment rate fell to 2.7% in December from 2.8%. Published data showed a recovery in the country’s labor market despite a rise in COVID-19 in the last two months.

Trading recommendations

• Support levels: 114.77,114.37
• Resistance levels: 115.55,115.73

The global trend on the USD/JPY currency pair is bullish. The MACD indicator has become negative, but the dynamics of the decrease have a corrective nature. It is best to buy from the support level of 114.77 on the lower time frames. There are no optimal entry points for sell deals now.

Alternative scenario:

if the price fixes below 114.37, the uptrend will likely be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2769
• Prev. Close: 1.2706
• % chg. over the last day: -0.49%

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. Oil has been stable for the last few days and has traded at its highs for the last seven years, while the dollar index decreased yesterday, which caused a slight correction in USD/CAD quotes.

Trading recommendations

• Support levels: 1.2679,1.2649,1.2613,1.2586,1.2506
• Resistance levels: 1.2729,1.2792

From a technical point of view, the USD/CAD currency pair is bullish. The MACD indicator became negative, and the price decreased to the moving average. Under such market conditions, it is better to look for buy trades from the support level 1.2649. Sell trades can be considered on intraday time frames with short targets.

Alternative scenario:

if the price breaks through the 1.2613 support level and fixes below, the downtrend will be likely to resume.