The Analytical Overview of the Main Currency Pairs on 2023.01.30

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0889
• Prev. Close: 1.0867
• % chg. over the last day: -0.20%

The core Personal Consumption Expenditure Price Index declined from 4.7% to 4.4%. This indicator is on the US Federal Reserve’s list of monitored inflation indicators and influences monetary policy. It is clear that inflationary pressures in the US are declining, and the peak of inflation is behind us. The next move is up to the US Fed. A 0.25% rate hike this week is pretty much a done deal. The only uncertainty remains as to when the Fed will make its last rate hike and take a long pause.

Trading recommendations

• Support levels: 1.0834,1.0801,1.0781,1.0710,1.0650,1.0597,1.0535
• Resistance levels: 1.0882,1.0926

The trend on the EUR/USD currency pair on the hourly time frame is still bullish. The price is forming a price range again, which makes it difficult to find good entry points. The MACD indicator is in the negative zone, the sellers’ pressure remains, but it is weak. Under such market conditions, buy trades are best considered from the support level of 1.0833 with confirmation in the form of a false breakdown on intraday time frames. Sell deals can be considered from the resistance level of 1.0882, but better with a confirmation in the form of a reverse initiative.

Alternative scenario:

if the price breaks down through the support level of 1.0801 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2397
• Prev. Close: 1.2393
• % chg. over the last day: -0.03%

There will be a lot of economic data on the UK this week. The main event will be the Bank of England’s monetary policy meeting, where an interest rate hike of 0.5% is expected. The British pound has been holding steady during the last trading week, but economists are not optimistic about the prospects of the UK economy and forecast a decrease in the quotes in the near future. According to experts, the UK economy is already in recession, and raising the rate will only increase the negative pressure.

Trading recommendations

• Support levels: 1.2344,1.2292,1.2263,1.2220,1.2080,1.2000,1.1928,1.1875,1.1684
• Resistance levels: 1.2413,1.2446,1.2519

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is still bullish. The price forms a narrow price range. The MACD indicator has become inactive, and buying pressure is decreasing, with liquidity narrowing into a triangle. This often happens before an impulse movement. Under such market conditions, it is better to look for buy trades on intraday time frames from the support level of 1.2344 but with a confirmation in the form of a false breakdown. It is better to look for sell trades from the resistance level of 1.2413, but it is also better to confirm in the form of a reverse initiative because a false breakout has already occurred.

Alternative scenario:

if the price breaks down through the 1.2263 support level and fixes above it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 130.21
• Prev. Close: 129.83
• % chg. over the last day: -0.29%

Despite good economic data last week showing US GDP and Michigan sentiment outperforming expectations, the USD/JPY quotes were unable to move above 131.00. This suggests that investors are anticipating dollar weakness ahead of this week’s interest rate decision. Also, last week the IMF suggested that the Bank of Japan (BoJ) should be prepared to end economic stimulus quickly if inflation continues to rise and provide clear guidance to the market on any future policy changes.

Trading recommendations

• Support levels: 129.05,128.16,127.53,126.19
• Resistance levels: 130.27,130.58,131.10,130.61,131.58,132.37,132.95,133.23

From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bearish. The price is trading in the price corridor. The MACD indicator has become inactive, but within the day, sellers prevail. It is better to look for buy trades from the support level of 129.05, but only with confirmation on the lower time frames. Sell deals can be searched for from the resistance level of 130.27 in case of a false breakout.

Alternative scenario:

If the price fixes above the resistance level of 131.58, the uptrend will be renewed with a high probability.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3315
• Prev. Close: 1.3310
• % chg. over the last day: -0.04%

OPEC+ countries will meet this week. Delegates expect the advisory committee of ministers to recommend that production levels remain unchanged as global demand shows signs of potential recovery. Given current production and increasing Chinese demand, fundamentally, this could serve as the basis for a further rise in oil prices. Rising oil prices contribute to the strength of the Canadian currency.

Trading recommendations

• Support levels: 1.3303,1.3212
• Resistance levels: 1.3376,1.3428,1.3445,1.3496,1.3520,1.3554,1.3595,1.3632

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bearish. The price is trading at the level of moving averages. The MACD indicator is in the negative zone, but there is a divergence. The return of the price above the trend line may provoke a sharp rise in quotes. Under such market conditions, buy trades can be considered when the price returns above 1.3325, but with additional confirmation in the form of an impulse initiative. Sell deals should be considered from the resistance level of 1.3376, but only with confirmation.

Alternative scenario:

if the price breaks out and consolidates above the resistance level of 1.3513, the uptrend will likely resume.