The Analytical Overview of the Main Currency Pairs on 2022.12.28

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0635
• Prev. Close: 1.0638
• % chg. over the last day: +0.03%

President of the European Central Bank, Luis de Guindos, believes that the economic situation in the Eurozone is very complicated. The politician believes that the Eurozone will go through a brief and shallow recession before the economy starts growing again in the second quarter of 2023. At this point, the ECB is expected to continue to raise interest rates for at least two more meetings. ECB Governing Council spokesman and Dutch Governor Klaas Knot believes the ECB is only halfway through its tightening cycle.

Trading recommendations

• Support levels: 1.0550,1.0483,1.0361,1.0332,1.0284,1.0193
• Resistance levels: 1.0667,1.0695

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is forming a price corridor. The price is forming a wide price corridor. The MACD indicator has become inactive, but buyers prevail during the day. Under such market conditions, buy trades are best considered from support levels on intraday time frames, but with additional confirmation. Sell deals can be considered from the resistance level of 1.0667 or 1.0695, but better with a confirmation in the form of a reverse initiative or a false breakout because the level has already been tested.

Alternative scenario:

if the price breaks down through the support level of 1.0549 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2048
• Prev. Close: 1.2028
• % chg. over the last day: -0.17%

Since the UK markets were closed yesterday due to a public holiday, volatility on the GBP/USD currency pair was low. Analysts believe that the pound sterling will face renewed selling pressure as we approach 2023 as fears of a UK recession intensify and there is every chance that market participants are likely to look for safe-haven assets later in the year, so the dollar will benefit from this.

Trading recommendations

• Support levels: 1.1999,1.1979,1.1684,1.1476,1.1418
• Resistance levels: 1.2072,1.2218,1.2308,1.2431,1.2519

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The MACD indicator is in the negative zone, but sellers’ pressure is weak. The price is trading below the moving averages again. Under such market conditions, buy trades are better to look for from the support level of 1.1999 or 1.1979, but with confirmation on intraday time frames. Sell trades are best sought from the resistance level of 1.2072 but also better with confirmation.

Alternative scenario:

if the price breaks out through the 1.2308 resistance level and fixes above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 132.85
• Prev. Close: 133.53
• % chg. over the last day: +0.51%

Although Bank of Japan Governor Haruhiko Kuroda denied yesterday’s rumors that the bank is going to change its monetary policy, the undeniable fact is that by the end of 2022, something has started to change in Japan. Analysts believe that by the end of 2023, the Bank of Japan will abandon its soft stimulative policy, and the main changes will begin after Kuroda’s resignation in the spring of 2023. And on the USD/JPY currency pair, it is already clearly seen how some of these expectations are factored in. But it should be noted that there is still a chasm between the interest rates of the US Federal Reserve and the Bank of Japan, and the Japanese yen still lacks the fundamental support of the central bank.

Trading recommendations

• Support levels: 133.53,132.68,132.27,131.22
• Resistance levels: 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. But the price has consolidated above the moving averages, while the MACD indicator has become positive. Buying pressure is observed within the day. Buy trades are best considered on intraday time frames from a support level of 133.53 or 132.68, but only with confirmation. Sell deals can be looked for from the resistance level of 134.73, provided 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: 1.3579
• Prev. Close: 1.3522
• % chg. over the last day: -0.42%

Oil hit a 3-week high on loosening COVID restrictions in China, with US production levels down due to the winter storm. The Canadian dollar is a commodity currency, so rising oil prices lead to a stronger Canadian. But it should be understood that at the end of the year, investors and traders often close their positions and move portfolios into a save-have currency, which is usually the dollar index.

Trading recommendations

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

From the point of view of technical analysis, the uptrend trend on the USD/CAD currency pair is close to a break. The price is trading below the moving averages, the MACD indicator is in the negative zone, and sellers dominate the intraday. But yesterday, the price failed to consolidate below the priority change level and formed a false-breakdown zone. Buy trades should be considered from the support at 1.3521, but with confirmation. Sell deals are better to look for on the intraday time frames from the resistance level of 1.3590, but with confirmation in the form of reverse initiative on the lower time frames. If the price fails again below 1.3522, there will be a trend change.

Alternative scenario:

if the price breaks down and consolidates below the support level of 1.3521, the downtrend will likely resume.