The Analytical Overview of the Main Currency Pairs on 2022.02.14

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1425
• Prev. Close: 1.1347
• % chg. over the last day: -0.68%

The European currency may fall sharply soon because, in addition to the growth of the dollar due to the aggravated situation in Eastern Europe, the dollar index will also receive support from the Fed amid rising inflation in the United States. Investors expect the Fed to act more aggressively in monetary policy. The probability of raising interest rates immediately by 0.5% at the Fed meeting in March increased to 90%. Meanwhile, some Fed officials are already pushing for quantitative tightening for the Fed to cut its balance sheet, which hit a new record last week.

Trading recommendations

• Support levels: 1.1329,1.1275
• Resistance levels: 1.1392,1.1423,1.1481,1.1534,1.1617

From the technical point of view, the EUR/USD on the hourly time frame is bullish. But on Friday, the price decreased sharply to the priority change level. The MACD indicator is negative, the selling pressure remains. Under such market conditions, buy trades should be looked at from the priority change level of 1.1329. Sell trades are better to look for on intraday time frames from the resistance level of 1.1392.

Alternative scenario:

if the price breaks out through the 1.1329 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: 1.3554
• Prev. Close: 1.3554
• % chg. over the last day: 0.0%

UK GDP has grown by 1% over the past three months. The UK economy grew by 7.5% over the previous year, the fastest growth since 1941. On Friday, industrial production statistics showed an increase of 0.2-0.3%. The British pound is now more stable than the euro, as the Bank of England raised interest rates twice.

Trading recommendations

• Support levels: 1.3533,1.3475,1.3457,1.3434
• Resistance levels: 1.3594,1.3639,1.3662

Against the background of the dollar index growth on Friday, the GBP/USD quotes declined, but the price is still trading in a wide corridor. Under such market conditions, buy trades should be looked at from the support level 1.3475 or 1.3533. The resistance level of 1.3594 may be considered for opening sell deals, but only with additional confirmation in the form of sellers’ initiative.

Alternative scenario:

if the price breaks out through the 1.3475 support level and consolidates below, the bullish scenario will be broken.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 116.04
• Prev. Close: 115.41
• % chg. over the last day: -0.54%

The monetary policy of the Bank of Japan is now aimed at making the Japanese yen cheaper because of the maximum stimulus. At the same time, the Fed plans to tighten its monetary policy aggressively. Such opposite policies of central banks contribute to the growth of USD/JPY quotes. However, it should be noted that the Japanese yen is considered a safe-haven currency in case of panic in the market. Investors began to buy JPY, which resulted in a temporary decline in USD/JPY quotes due to a sharply deteriorating situation in Eastern Europe.

Trading recommendations

• Support levels: 115.15,114.76
• Resistance levels: 115.85,116.12,116.50

The global trend on the USD/JPY currency pair is bullish. On Friday, the price reached the priority change level, but buyers managed to protect their positions. The MACD indicator became negative. Under such market conditions, it is best to look for buy deals on the lower time frames from the support level of 115.15, but with an additional confirmation, as the price has already tested this level. Sell positions can be looked at from the resistance level 115.85, but only with short targets and additional confirmation.

Alternative scenario:

if the price fixes below 115.15, the uptrend will likely be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2719
• Prev. Close: 1.2735
• % chg. over the last day: +0.12%

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. The sharp increase in the dollar index after negative news from Eastern Europe led to a temporary decline in the USD/CAD quotes on Friday. However, oil prices increased sharply on Monday morning, which boosted the Canadian dollar. As a result, the USD/CAD currency pair is trading in a wide corridor, and both currencies now have fundamental support.

Trading recommendations

• Support levels: 1.2685,1.2649,1.2600,1.2506
• Resistance levels: 1.2752,1.2792

From a technical point of view, the USD/CAD currency pair is bullish. The price is in a wide flat with high volatility. It is worth trading only with short targets, as both oil and the dollar index are inclined to grow now. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2685. For sell deals, it is better to consider the resistance level of 1.2792, but with an additional confirmation in the form of an initiative of sellers.

Alternative scenario:

if the price breaks through the 1.2649 support level and fixes below, the downtrend will likely resume.