The Analytical Overview of the Main Currency Pairs on 2022.03.22

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1056
• Prev. Close: 1.1018
• % chg. over the last day: -0.34%

The ECB and the Fed will not work synchronously as the war in Ukraine affects regional economies in different ways, European Central Bank President Christine Lagarde said on Monday. The ECB head also added that the US economy is less dependent on imports of commodities than the European economy. Climate change issues were also touched. Christine Lagarde noted that Europe’s efforts to combat climate change and reduce its dependence on fossil fuels will increase inflation in the short and medium-term but will lead to lower prices in the long run.

Trading recommendations

• Support levels: 1.0917,1.0887,1.0823,1.0633
• Resistance levels: 1.1079,1.1112,1.1291

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is still bearish. At the moment, the price is trading in a wide corridor. The MACD indicator has become negative, indicating a strengthening of sellers. Under such market conditions, it is better to look for sell trades on the intraday time frames from the resistance level of 1.1079. Buy trades should be considered from the support level of 1.0917, but only with short targets.

Alternative scenario:

if the price breaks out through the 1.1112 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: 1.3167
• Prev. Close: 1.3164
• % chg. over the last day: -0.02%

US government bond yields show significant growth as the Fed begins to raise interest rates. Rising US government bond yields widen the spread between UK and US bonds, putting pressure on the British pound quotes. In terms of monetary policy, both the US Fed and the Bank of England are already raising interest rates, so traders should not expect a trend on the GBP/USD currency pair in the medium term.

Trading recommendations

• Support levels: 1.3087,1.2989,1.2863
• Resistance levels: 1.3208,1.3274

On the hourly time frame, the trend on the GBP/USD currency pair is bearish. At the moment, the price is trading in a wide corridor. The MACD indicator has become negative, which indicates an intensification of sellers. Under such market conditions, buy trades should be considered from the support level of 1.3087, but better with confirmation. The best way to sell is to consider the resistance level of 1.3208, but only with a confirmation in the form of a false breakout.

Alternative scenario:

if the price breaks out through the 1.3208 resistance level and fixes above, the mid-term uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 119.13
• Prev. Close: 119.45
• % chg. over the last day: +0.27%

The Bank of Japan’s monetary policy is now aimed at large-scale economic stimulation, harming the national currency. Given that the US Federal Reserve System has already started to raise the interest rates and plans to do another 6-7 more at each meeting, the situation leads to rising USD/JPY quotes in the mid-term.

Trading recommendations

• Support levels: 119.52,119.00,118.58,118.03,117.34,116.95,116.32
• Resistance levels: 120.42

The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator is in the positive zone. There are signs of overbought and divergence on several time frames, which means that a corrective move down is close. Under such market conditions, it is best to look for buy deals after a pullback, as the price has strongly deviated from the moving averages. A support level of 119.52 or 119 would be the best, but with additional confirmation. The resistance level of 120.42 can be considered for sell deals, but only after the sellers’ initiative.

Alternative scenario:

if the price fixes below 118.03, the uptrend will likely be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2602
• Prev. Close: 1.2591
• % chg. over the last day: -0.09%

The Canadian dollar is a commodity currency, so it is highly dependent not only on the monetary policy of the Bank of Canada but also on the oil prices and the dollar index. Oil prices continue to rise as Europe tries to cut oil and gas supplies from Russia. Crude oil inventories are very low by historical standards, so any disruption in global supplies will significantly impact prices. At the same time, rising inflation in Canada increases the likelihood of more aggressive interest rates increases. All these factors contribute to strengthening the Canadian currency (decrease of USD/CAD quotes).

Trading recommendations

• Support levels: 1.2555,1.2517
• Resistance levels: 1.2655,1.2713,1.2754,1.2851

In terms of technical analysis, the USD/CAD currency pair trend is bearish. The MACD indicator has become inactive, sellers’ pressure is decreasing, there are signs of divergence. It is worth trading only with short targets because on the USD/CAD currency pair fundamentally, there are no prerequisites for a medium-term trend, as the dollar index also has the support of the Fed in the medium term. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2555, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2655.

Alternative scenario:

if the price breaks through and consolidates above 1.2713, the downtrend will likely be broken.