The Analytical Overview of the Main Currency Pairs on 2023.03.10

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0541
• Prev. Close: 1.0581
• % chg. over the last day: +0.38%

The monthly Nonfarm Payrolls report will be released in the US today. The US economy is expected to grow by 200,000 jobs last month, down significantly from 517,000 in January. The unemployment rate is forecast at 3.4%. Yesterday’s weekly labor market data showed that US employers announced 77,770 job cuts in February, down 24% from the 102,943 cuts announced in January. This points to a resilient labor market. Therefore, strong data today could give even more confidence to the dollar index. On the other hand, if the NFP data is worse than expected and there are signs that the labor market is starting to cool, it will give confidence to major currencies such as the euro and the pound.

Trading recommendations

• Support levels: 1.0545,1.0519,1.0482
• Resistance levels: 1.0618,1.0656,1.0704,1.0804,1.0906

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The price returned to the zone above the moving averages, but the price growth is extremely slow, indicating that it is difficult for the buyers to push the price higher. The MACD indicator has become positive. Under such market conditions, it is worth looking for trades in the continuation of the downtrend. Sell deals can be considered from the resistance level of 1.0618, provided that there is a reverse reaction. Buy trades are best considered from the support level of 1.0545 but with intraday confirmation.

Alternative scenario:

if the price breaks down through the resistance level of 1.0656 and fixes above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1833
• Prev. Close: 1.1922
• % chg. over the last day: +0.75%

Lots of macro statistics will be released today in the UK. The most important report will be the GDP data for the last month. Analysts forecast growth of 0.1%. But there may be surprises. If the GDP figure is negative (contraction), it will be very negative for the GBP, which means that the economy is close to a technical recession. Industrial production data is also worth paying attention to. Growth in production is positive for the economy and the currency, while a decline in industrial output is a sign of problems.

Trading recommendations

• Support levels: 1.1843,1.1799,1.1603
• Resistance levels: 1.1929,1.1956,1.1993,1.2086,1.2147

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price has been corrected to the middle lines. The MACD indicator has become positive, but buyer pressure is weak. Under such market conditions, it is best to look for sell deals from a resistance level of 1.1929 or 1.1956 but with confirmation in the form of a false breakout or a reverse reaction. Buy trades are best looked for from the support level of 1.1843 but better with confirmation on intraday time frames.

Alternative scenario:

if the price breaks out through the 1.2050 resistance level and fixes above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 137.32
• Prev. Close: 136.14
• % chg. over the last day: +0.87%

The Japanese yen fell sharply against the US dollar on Friday after the Bank of Japan left interest rates unchanged and kept its current bond yield curve control (YCC) policy settings. This was the last meeting in the office for Haruhiko Kuroda. Incoming Governor Kazuo Ueda said that the central bank should maintain its current ultra-soft policy for now until there are signs that inflation will not exceed the Bank of Japan’s 2% target. Ueda tried to cool rumors of an earlier-than-expected normalization of interest rates. However, analysts still believe a policy adjustment could come sooner, given the distortions caused by yield curve control policies and four decades of high inflation.

Trading recommendations

• Support levels: 136.08,135.25,134.04,133.47,
• Resistance levels: 137.23,137.91,138.15,138.88

From the technical point of view, the medium-term trend on the currency pair USD/JPY is upward. The bullish trend continues, and the correctional wave is over. The MACD indicator is negative, but there is no seller pressure. Under such market conditions, it is best to look for buy deals from the support level of 136.09, but only with intraday confirmation. Sell deals can be sought from the 137.23 resistance level, but only with short targets and additional confirmation in the form of a reverse initiative on the lower timeframes.

Alternative scenario:

if the price fixes below the 135.25 support level, the downtrend will be resumed with a high probability.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3796
• Prev. Close: 1.3826
• % chg. over the last day: +0.21%

Fears of more aggressive interest rate hikes from the US Federal Reserve and disappointing inflation data from China have caused oil to fall. The Canadian dollar is a commodity currency, so a decrease in oil prices is a negative factor for the Canadian currency. Canada will also release fresh labor market data today. The economy is expected to add only 8,500 jobs compared to 150,000 last month, and the unemployment rate is expected to rise from 5.0 to 5.1%. If the actual data is in line with or worse than expected, it will be negative for the Canadian dollar.

Trading recommendations

• Support levels: 1.3805,1.3777,1.3711,1.3664,1.3645,1.3515
• Resistance levels: 1.3853

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 averages, but it is approaching the resistance level. The MACD indicator is in the positive zone, but there are signs of divergence. Under such market conditions, buy trades should be sought from the support level of 1.3777 or 1.3806, but only with confirmation in the form of reaction on the lower time frames. Sell deals can be searched from the resistance level of 1.3853, but only with short targets and after confirmation in the form of a false breakout.

Alternative scenario:

if the price breaks down and consolidates below the support level of 1.3711, the downtrend will likely resume.