The Analytical Overview of the Main Currency Pairs on 2022.12.30

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0608
• Prev. Close: 1.0661
• % chg. over the last day: +0.50%

The dollar index may find some support in the final days of 2022 as geopolitical tensions, and the ban on Chinese travelers continue to escalate. Many countries have already announced rules for inbound Chinese, including India, Malaysia, Italy, and the United States. It should also be noted that many investors are closing their positions in anticipation of the long holiday before the US tax season closes.

Trading recommendations

• Support levels: 1.0638,1.0589,1.0483,1.0361,1.0332,1.0284,1.0193
• Resistance levels: 1.0695

The trend on the EUR/USD currency pair on the hourly time frame is still bullish. The price forms a wide price corridor, and the MACD indicator has become inactive, but buyers dominate inside the day. Volatility on the eve is low. Under such market conditions, buy trades are best considered from the support level of 1.0638 on intraday time frames. Sell deals can be considered from the resistance level of 1.0695, but better with a confirmation in the form of a reverse initiative or a false breakout since 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: 1.2015
• Prev. Close: 1.2053
• % chg. over the last day: +0.31%

The British pound is behaving rather indecisively in the last days of 2022, which is to be expected at this time of year with minimal trading volumes and no fundamental stimulus. After China lifted its quarantine rule for inbound travelers starting January 8, the United States, Japan, India, and other countries said they would require COVID tests for travelers from China. This could raise concerns about new strains of COVID that could again disrupt global recovery. Such a situation could cause investors to start buying dollars again.

Trading recommendations

• Support levels: 1.1999,1.1979,1.1684,1.1476,1.1418
• Resistance levels: 1.2074,1.2167,1.2218,1.2308,1.2431,1.2519

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The MACD indicator became inactive, and the price formed a narrow price corridor. Under such market conditions, it is better to look for buy deals on intraday time frames from the support level of 1.1999 or 1.1979, but with confirmation. Sell trades are best sought from the resistance level of 1.2167 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: 134.39
• Prev. Close: 133.00
• % chg. over the last day: -1.05%

Analysts’ views on the Bank of Japan’s recent measures have changed. Now experts think that these measures aimed at doubling the limit of government bond yields lead to a continuation of a stimulus rather than a change in the trajectory of monetary policy. Representatives of the bank’s board of directors are worried about the deterioration of the Japanese market of government bonds. And the problem is in liquidity. After this decision of the Bank of Japan, 10-year bonds were not traded for four days in a row, indicating the low liquidity in the market. Thus, investors should not hope for a reversal of monetary policy, at least until the spring of 2023.

Trading recommendations

• Support levels: 132.59,132.27,131.22
• Resistance levels: 133.59,134.45,135.88,137.03,138.00,139.09

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The price is now trading below the moving averages, while the MACD indicator has become inactive. During the day, there is a slight seller’s pressure. Buy trades are best considered on intraday time frames from the support level of 132.59, but only with confirmation. Sell deals can be looked for from the resistance level of 133.59, 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: 1.3600
• Prev. Close: 1.3547
• % chg. over the last day: -0.39%

In addition to the fact that some countries have already announced special requirements for Chinese travelers, crude oil inventories increased by 700,000 barrels last week, putting further pressure on oil prices. The Canadian dollar is a commodity currency that highly depends on oil price movements. However, the dollar index also declined yesterday amid uncertainty over China, so USD/CAD quotes were slightly down at the end of the day.

Trading recommendations

• Support levels: 1.3529,1.3438,1.3386,1.3360,1.3281,1.3212
• Resistance levels: 1.3614,1.3656,1.3700,1.3776,1.3855

From the point of view of technical analysis, the trend on the USD/CAD currency pair is still bullish. The price failed to consolidate below the priority level and is trading above the level. The MACD indicator became negative, and sellers prevailed throughout the day yesterday. Buy trades should be considered from the support level of 1.3529, but with confirmation. Sell deals are better to look for on the intraday time frames from the resistance level of 1.3614, but with confirmation in the form of reverse initiative on the lower time frames.

Alternative scenario:

if the price breaks down and consolidates below the support level of 1.3529, the downtrend will likely resume.