The Analytical Overview of the Main Currency Pairs on 2022.10.17

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 0.9772
• Prev. Close: 0.9720
• % chg. over the last day: -0.53%

On Friday, ECB representative Mārtiņš Kazāks pointed out that the ECB no longer needs to hang on to a large balance, so a rate hike of 75 basis points in October is appropriate, 50 BPS or 75 BPS in December. Other ECB representatives, namely Chief Economist Philip Lane and Klaas Knot from the Netherlands, are of the same opinion. At the same time, Mr. Knot said that the ECB needs to raise rates above the neutral level of 2%. At the moment, the ECB is keeping the rate at 1.25%.

Trading recommendations

• Support levels: 0.9701
• Resistance levels: 0.9856,0.9961,1.0058,1.0111,1.0162,1.0230

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is trading at the level of the moving averages. The MACD indicator has become inactive, but the pressure of buyers remains. Buy trades should be considered from the support level of 0.9701, but with additional confirmation in the form of reverse initiative. Sell deals can be considered from the resistance level of 0.9856, but only with confirmation.

Alternative scenario:

if the price breaks down through the support level of 0.9666 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1318
• Prev. Close: 1.1161
• % chg. over the last day: -1.41%

British government bonds will trade this week without the support of the Bank of England’s emergency bond-buying program, which ended on Friday. Britain’s new chancellor Jeremy Hunt said over the weekend that he could restore the country’s public finances. Reports that the government is preparing to dramatically alter planned tax cuts helped ease fears about public finances, but that must translate into concrete plans to avoid another bond sell-off. According to analysts, the British economy is at risk of slipping into recession next year. Bank governor Andrew Bailey said Saturday that he believes a significant rate hike will be needed in early November.

Trading recommendations

• Support levels: 1.1186,1.1093,1.0915,1.0817
• Resistance levels: 1.1353,1.1478,1.1693,1.1816,1.1901

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price is trading at the level of the moving averages. The MACD indicator has become inactive, but buyers’ pressure remains. Under such market conditions, buy trades can be considered from the support level of 1.1186 or 1.1229, but better after confirmation. It is better to look for sell trades on intraday time frames. The nearest resistance level is 1.1353.

Alternative scenario:

if the price breaks down of the 1.0915 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 147.07
• Prev. Close: 148.74
• % chg. over the last day: +1.14%

The Bank of Japan may take new steps to strengthen the currency. Bank of Japan Deputy Governor Masazumi Wakatabe said Saturday that recent fluctuations in the yen have been “too fast and too one-sided,” indicating concerns about the possible economic consequences of the currency falling to a 32-year low against the dollar. Japan intervened in the currency market in September to stop the yen’s plummet. However, the divergence in monetary policy between the US Federal Reserve and the Bank of Japan is still pushing the USD/JPY quotes up. BoJ governor Kuroda said on Saturday that inflation in Japan is rising mainly because of cost-push factors, so the Bank of Japan will continue to maintain its soft monetary policy.

Trading recommendations

• Support levels: 147.67,146.21,145.93,144.91,144.16,143.00,140.60,139.61
• Resistance levels: 149.00,150.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading above the moving levels. The price is trading above the moving levels. The MACD indicator is in the positive zone, and the pressure of buyers remains. Under such market conditions, buy trades can be searched for on intraday time frames from the support level of 147.67, but with confirmation. Sell deals can be searched from the resistance level of 149.00 or 150.00, but only with additional confirmation in the form of a reverse initiative.

Alternative scenario:

If the price fixes below 145.95, the downtrend will likely resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3740
• Prev. Close: 1.3881
• % chg. over the last day: +1.03%

Bank of Canada Governor Tiff Macklem pointed out at the International Monetary Fund meeting in Washington that overall inflation in Canada has declined by about a percentage point over the past couple of months. Still, there is not yet a reversal in the core inflation components as inflation continues to rise for goods and services. Macklem also added that short-term inflation expectations are rising along with inflation, and the longer inflation remains high, the greater the risk that short-term inflation expectations will turn into longer-term inflation expectations. However, the Governor of the Bank of Canada added that investors should not expect a recession in Canada, only a slowdown in growth.

Trading recommendations

• Support levels: 1.3816,1.3619,1.3583,1.3535,1.3454
• Resistance levels: 1.3858,1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is trading above the moving average lines. The MACD indicator is positive, but buyer pressure is decreasing. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3816, but after confirmation in the form of an impulse initiative. For sell deals, it is better to consider the resistance level of 1.3854, but only after additional confirmation in the form of a reverse initiative.

Alternative scenario:

if the price breaks down and consolidates below the support level of 1.3706, the downtrend will likely resume.