The Analytical Overview of the Main Currency Pairs on 2022.12.22

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0624
• Prev. Close: 1.0603
• % chg. over the last day: -0.19%

The Conference Board Consumer Confidence Index in the US jumped to 108.3 from 101.4, beating economists’ forecast of 101.0. The rise in consumer sentiment has eased fears of a US recession. Investors are now waiting for US GDP data for the latest quarter and data on the PCE Index, which is among the US Federal Reserve’s monitored inflation indicators. Growing inflationary pressures may bring panic moods back to the market, which will cause EUR/USD quotes to fall against the background of the dollar’s strengthening.

Trading recommendations

• Support levels: 1.0549,1.0483,1.0361,1.0332,1.0284,1.0193
• Resistance levels: 1.0647,1.0695

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is forming a price corridor. The MACD indicator became positive. Inside the day, purchases prevail. Under such market conditions, buy trades are best considered from the moving averages but with additional confirmation. Sell deals can be considered from the resistance level of 1.0647, but it is better with confirmation in the form of a reverse initiative or false breakout because the level has already been tested.

Alternative scenario:

if the price breaks down through the support level of 1.0446 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2171
• Prev. Close: 1.2082
• % chg. over the last day: -0.74%

Today, the UK will release GDP data for the last quarter of 2022. Analysts are predicting that the economy will contract by 0.2%, which will be the second quarter of decline, which will mean a technical recession. The UK’s economic outlook remains murky: record inflation, the energy crisis, and strikes suggest that economic indicators will decline throughout the winter.

Trading recommendations

• Support levels: 1.2091,1.2177,1.2024,1.1964,1.1684,1.1476,1.1418
• Resistance levels: 1.2218,1.2308,1.2431,1.2519

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. Yesterday, the price tested the priority change level but failed to consolidate higher. A false breakdown area was formed. The MACD indicator has become inactive, and the volatility on the threshold of the holidays is low. Under such market conditions, it is better to look for buy trades from the support level at 1.2092 but with a confirmation at the intraday time frames. Sell trades are best sought from the resistance level of 1.2218 but also better with confirmation.

Alternative scenario:

if the price breaks down from the 1.2092 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 131.51
• Prev. Close: 132.45
• % chg. over the last day: +0.71%

Japan is the world’s largest holder of US Treasuries outside the United States, and benchmark 10-year bond yields rose about 13 basis points in two sessions following the Bank of Japan’s decision. Investors are shorting yen positions and selling them in bond markets around the world. According to analysts, the sale of Japanese bonds could trigger a panicked influx of cash back into Japan, but so far, this is not happening. The overall fundamental picture is starting to change and comes down to expectations that the Bank of Japan will join other central banks in tightening monetary policy next year.

Trading recommendations

• Support levels: 131.22
• Resistance levels: 133.53,134.73,135.88,137.03,138.00,139.09

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The MACD indicator has become inactive, forming a narrow price range. It is better to look for buy trades on intraday time frames from the support level of 131.22, but only with confirmation. Sell deals can be looked for from the resistance level of 133.53, provided that there is a reverse reaction.

Alternative scenario:

If the price fixes above 137.00, the uptrend will likely resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3610
• Prev. Close: 1.3612
• % chg. over the last day: +0.01%

Yesterday, new inflation data was released in Canada. The report showed that year-over-year consumer prices fell from 6.9% to 6.8%, while core inflation (which excludes food and energy prices) remained at 5.8% y/y. The key point is that the main components of core price pressures have shown an upward trend, and core inflation remains well above the Bank of Canada’s target, keeping the likelihood of a rate hike at the January meeting high.

Trading recommendations

• Support levels: 1.3590,1.3521,1.3438,1.3386,1.3360,1.3281,1.3212
• Resistance levels: 1.3656,1.3700,1.3776,1.3855

From the point of view of technical analysis, the trend on the USD/CAD currency pair has changed to bullish. But the price is trading below the moving averages, and the MACD indicator is negative, indicating selling pressure inside the day. At the same time, volatility is decreasing in anticipation of the holidays. Buy trades should be considered from the support level of 1.3590, but with a confirmation in the form of a reversal, currently, there is none. Sell deals are best to look for on the intraday time frames from the resistance level of 1.3656, but with a confirmation in the form of a reverse initiative or after a false breakout, since the level has already been tested.

Alternative scenario:

if the price breaks down and consolidates below the support level of 1.3386, the downtrend will likely resume.