The Analytical Overview of the Main Currency Pairs on 2022.04.11

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0875
• Prev. Close: 1.0875
• % chg. over the last day: 0.0%

Russia’s invasion of Ukraine has been going on for a month and a half, and the longer the war lasts, the more likely it is that Europe will face stagflation (lower economic growth with high inflation) amid the energy and food crisis. European politicians are not in a hurry to tighten the monetary policy, which could negatively affect Europe as the dollar index rises significantly amid increasing US government bond yields, which negatively affects the euro quotes.

Trading recommendations

• Support levels: 1.0857,1.0823,1.0633
• Resistance levels: 1.0946,1.0958,1.1027,1.1075,1.1135,1.1196,1.1291

From the technical point of view, the trend on the EUR/USD currency pair in the hourly time frame is bearish. The price has adopted a more flat structure. The MACD indicator is inactive, but the first signs of buyers have appeared. Under such market conditions, it is possible to look for buy trades on intraday timeframes from the support level of 1.0857, but only with short targets and confirmation. Sell trades should be considered from the resistance level of 1.0946 or 1.0958, but only after the additional confirmation.

Alternative scenario:

if the price breaks out through the 1.1075 resistance level and fixes above, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3072
• Prev. Close: 1.3035
• % chg. over the last day: -0.28%

Decreasing yield spreads between UK and US government bonds negatively affects the British pound. The economic indicators released today (GDP, industrial production) have begun to show signs of slowing economic growth, which means that the UK and Europe may face stagflation. However, unlike the ECB, the UK has already raised the interest rate three times to help slow inflation.

Trading recommendations

• Support levels: 1.2976,1.2863
• Resistance levels: 1.3053,1.3107,1.3144,1.3181,1.3244,1.3274

On the hourly time frame, the GBP/USD currency pair trend has changed to bearish. Buyers failed to hold the priority change level. The price has consolidated below the moving averages. The MACD indicator became negative, and the selling pressure intensified, but there are signs of divergence. Under such market conditions, sell trades l should be looked for from the resistance level of 1.3053. For buy deals, traders may consider the level of 1.2976 if the price shows bullish initiative.

Alternative scenario:

if the price breaks down through the 1.3181 resistance level and fixes above, the mid-term uptrend will likely be resumed.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 123.94
• Prev. Close: 124.27
• % chg. over the last day: +0.27%

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). The US Fed will tighten monetary policy more aggressively. The dollar index rose to its highest level in almost two years. The mid-term outlook remains unchanged – analysts see a continuation of the uptrend, as the monetary policy of the US and Japanese central banks are now opposed.

Trading recommendations

• Support levels: 124.66,124.24,122.97,122.63,121.81
• Resistance levels: 125.28,125.82

The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator is positive again. The buyers’ pressure is increasing. But the price has deviated very much from the moving averages. Under such market conditions, it is best to look for buy deals, expecting the continuation of the uptrend, but after the price makes a pullback to the average lines. First of all, it is worth considering the support level of 124.66 or 124.24, but with additional confirmation. A resistance level of 125.28 or 125.82 may be considered for sell deals, but only after the seller’s initiative and only with short targets.

Alternative scenario:

If the price fixes below 121.81, the uptrend will likely be broken.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2584
• Prev. Close: 1.2570
• % chg. over the last day: -0.11%

Canada has an ambitious plan to double the pace of housing construction within a decade. However, the big challenge is finding enough skilled workers as the country has struggled with a tough labor market throughout the history of observation. Building more homes is a key tie-in to the C$9.5 billion ($7.5 billion) in housing expenditures budgeted by Prime Minister Justin Trudeau’s government on Thursday. In the last four months alone, Canada has created more than 100,000 jobs in construction, a historic increase for the sector. The overall unemployment rate fell to a record 5.3% in March. With the Bank of Canada holding its interest rate meeting this week, which is expected to raise interest rates by 0.5% at once, this situation will help strengthen the Canadian currency.

Trading recommendations

• Support levels: 1.2574,1.2476,1.2430
• Resistance levels: 1.2654,1.2713,1.2754,1.2851

In terms of technical analysis, the USD/CAD currency pair has changed to bullish, as the price has consolidated above moving averages. The MACD indicator is in the positive zone, but there are the first signs of weakness of the buyers. Trade is worth it only with short targets as, fundamentally, there are no prerequisites for the medium-term trend on the USD/CAD currency pair. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2574, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2654, but it is better with confirmation.

Alternative scenario:

if the price breaks through and consolidates below 1.2430, the downtrend will likely be resumed.