The Analytical Overview of the Main Currency Pairs on 2022.04.04

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1063
• Prev. Close: 1.1048
• % chg. over the last day: -0.14%

On Friday, non-farm payrolls data showed that the number of jobs in the US increased by 431,000 in March from an expected 490,000. The US unemployment rate fell to 3.6% in March from 3.8%. The inflation rate in the Eurozone jumped sharply from 5.9% to 7.5% year on year. This surge in inflation has increased the likelihood that the ECB will soon announce the end of its quantitative easing program.

Trading recommendations

• Support levels: 1.1037,1.1017,1.0963,1.0917,1.0887,1.0823,1.0633
• Resistance levels: 1.1149,1.1196,1.1291

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. At the moment, the price has corrected and is trading between the moving averages. The MACD indicator is in the negative zone. There are signs of divergence. Under such market conditions, it is better to look for buy trades on intraday timeframes from the support level of 1.1017. Sell trades should be considered from the resistance level of 1.1149, but only after the additional confirmation.

Alternative scenario:

if the price breaks down through the 1.1017 support level and fixes below, the uptrend will likely be broken.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3134
• Prev. Close: 1.3114
• % chg. over the last day: -0.15%

The UK manufacturing activity index remains above 50, which is a positive signal. The UK agrees to join the US in releasing strategic oil reserves. This may soon lead to lower oil prices, which will be negative for the GBP due to the high correlation with Brent oil. Today, investors should pay close attention to the speech of the Governor of the Bank of England, Andrew Bailey. The UK has suspended interest rate hikes, but rising consumer prices may force politicians to reconsider their decision.

Trading recommendations

• Support levels: 1.3074,1.3015,1.2989,1.2863
• Resistance levels: 1.3130,1.3161,1.3244,1.3274

On the hourly time frame, the GBP/USD currency pair trend is bullish. The price movement pattern is beginning to show a flat structure. The MACD indicator became inactive. Under such market conditions, buy trades should be considered from the support level of 1.3074, but better with confirmation. Sell deals should be considered from the resistance level of 1.3130 or 1.3161, but only with short targets.

Alternative scenario:

if the price breaks down through the 1.3074 support level and fixes below, the mid-term uptrend will likely be broken.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 121.84
• Prev. Close: 121.69
• % chg. over the last day: +0.73%

The fundamental picture for the Japanese Yen remains unchanged. The monetary policy of the Bank of Japan is now “ultra-soft” and aims to decrease the national currency rate (USD/JPY growth). Due to the central bank of Japan’s work in the debt market, the Japanese yen temporarily strengthened at the end of last week. However, the mid-term outlook remains unchanged – analysts see a continuation of the uptrend, as the monetary policy of the US and Japanese central banks is now opposed.

Trading recommendations

• Support levels: 121.83,120.88,119.52,117.72
• Resistance levels: 123.44,125.22

The medium-term trend on the USD/JPY currency pair is bullish. The price corrected to the moving averages. The MACD indicator has become positive. Under such market conditions, it is best to look for buy deals, expecting the continuation of the uptrend. First of all, it is worth considering the support level of 121.83, but with additional confirmation. A resistance level of 123.44 may be considered for sell deals, but only after the sellers’ initiative.

Alternative scenario:

If the price fixes below 119.52, the uptrend will likely be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2479
• Prev. Close: 1.2505
• % chg. over the last day: +0.11%

The Canadian dollar is a commodity currency and is highly dependent on the movement of oil prices and the dollar index. The situation in the energy market is difficult now. On the one hand, due to Russia’s invasion of Ukraine, there is a shortage of energy resources on the market, especially in Europe. On the other hand, the US and its partners are ready to release strategic reserves to stop rising oil prices. As a result, volatility in oil quotes is now higher. Oil lost more than 10% last week. Falling oil prices will hurt the Canadian dollar. On the other hand, the Bank of Canada is publishing its business activity review today. Positive data may increase expectations of a half a percent rate hike, which is favorable to the Canadian dollar.

Trading recommendations

• Support levels: 1.2491,1.2453
• Resistance levels: 1.2563,1.2655,1.2713,1.2754,1.2851

In terms of technical analysis, the USD/CAD currency pair trend is bearish. The MACD indicator has become inactive. Trade only with short targets, since on the USD/CAD currency pair fundamentally, there are no prerequisites for the medium-term trend, as the dollar index in the medium term also has the support of the Fed. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2491, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2563.

Alternative scenario:

if the price breaks through and consolidates above 1.2654, the downtrend will likely be broken.