The Analytical Overview of the Main Currency Pairs on 2022.07.11

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0161
• Prev. Close: 1.0185
• % chg. over the last day: +0.23%

The euro fell to a new low for two decades against the US dollar on Friday amid fears the Eurozone economy is sliding into recession. Last week investors were focused on FOMC protocol and US nonfarm payrolls data. The FOMC meeting minutes showed that the Fed is likely to raise rates by 0.75% at the July meeting, and the strong jobs report only increased the prospects of a 75bp Fed rate hike. The interest rate differential between the US Fed and the ECB has already resulted in 1 dollar being almost equal to 1 euro.

Trading recommendations

• Support levels: 1.0135
• Resistance levels: 1.0221,1.0284,1.0365,1.0415,1.0504,1.0564,1.0611

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. Currently, the price is trading below the moving averages, and the MACD indicator has become inactive, but there is a strong divergence. Under such market conditions, sell deals can be considered from the resistance level of 1.0221 or 1.0284, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.0135, but only with confirmation and short targets.

Alternative scenario:

if the price breaks out through the 1.0415 resistance level and fixes above, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2021
• Prev. Close: 1.2026
• % chg. over the last day: +0.04%

The fight for the Prime Minister’s seat in the UK begins. Boris Johnson will remain in power until a new leader is elected, which will take about six weeks. This week, investors are waiting for UK GDP data. It may add to the problematic fundamental background for the pound sterling. The Governor of the Bank of England will give a speech today and may clarify on the state of the UK economy and how the Bank of England will respond to the current market pricing.

Trading recommendations

• Support levels: 1.1960,1.1929
• Resistance levels: 1.2065,1.2095,1.2137

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. In contrast to the euro, the pound is showing more stability. Currently, the price is trading between the moving averages, the MACD indicator is positive, and there is slight pressure from the buyers. Under such market conditions, sell deals can be considered from the resistance level of 1.2065, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.1960 or 1.1929, but only with confirmation and short targets.

Alternative scenario:

if the price breaks out through the 1.2137 resistance level and fixes above, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 136.01
• Prev. Close: 136.03
• % chg. over the last day: +0.01%

Bank of Japan Governor Kuroda said that Japan’s financial system is generally stable despite economic uncertainty. At the same time, the Bank of Japan will continue to stick to the ultra-soft monetary policy and is prepared to soften policy without hesitation further as necessary. And even though the core inflation rate has already consolidated above the Bank of Japan’s target of 2%. Against the backdrop of these statements, the Japanese Yen started to decline further, and USD/JPY quotes renewed its multi-year historical high.

Trading recommendations

• Support levels: 136.48,135.92,135.40,134.64,134.11
• Resistance levels: 137.48,138.89

From the technical point of view, the medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator became positive, and the price continued its upward trend. Under such market conditions, buy trades can be considered from the support level of 136.48, but with confirmation. A resistance level of 137.48 is good for sell deals, but only with additional confirmation and short targets.

Alternative scenario:

If the price fixes below 134.64, the downtrend will likely resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2975
• Prev. Close: 1.2936
• % chg. over the last day: -0.30%

Labor market data on Friday showed that the number of jobs in Canada fell by 43,200 last month. At the same time, the unemployment rate dropped from 5.1% to 4.9%. The country’s inflation rate is currently about four times the Bank of Canada’s 2% target, which points to a 0.75% interest rate hike this week rather than a 0.5% increase. The Bank of Canada is scheduled to meet on July 13.

Trading recommendations

• Support levels: 1.2934,1.2959,1.2894
• Resistance levels: 1.3021,1.3052

In terms of technical analysis, the trend on the USD/CAD currency pair is bullish. The price has corrected to the average values, and the MACD indicator has become inactive. Under such market conditions, it is best to look for buy trades on the lower time frames from the support level of 1.2959 or 1.2934. For sell deals, it is best to consider the resistance level of 1.3021, but it is also better with confirmation and short targets.

Alternative scenario:

if the price breaks through and consolidates below the 1.2894 support level, the downtrend will likely resume.