The Analytical Overview of the Main Currency Pairs on 2023.03.28

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0773
• Prev. Close: 1.0796
• % chg. over the last day: +0.21%

In Germany, the Ifo Business Activity Index has increased for the sixth month in a row. Last month the index rose from 91.1 to 93.3. Lower wholesale gas prices and the opening of the Chinese economy boosted economic confidence. The component of current estimates and expectations has increased significantly. But it should be noted that the Ifo index can react with a delay of one to two months, so there is a high probability that the risk of a banking crisis as well as the current transportation worker strikes, have not yet been accounted for.

Trading recommendations

• Support levels: 1.0680,1.0519,1.0482
• Resistance levels: 1.0814,1.0862,1.0924

Alternative scenario:

The EUR/USD currency pair trend on the hourly time frame is still bullish. The price is back above the moving averages, but the buyers’ pressure is extremely weak. The MACD indicator is in the positive zone but has no upward momentum. Buy trades are best considered after completing this correction from the support level of 1.0680. It is better to buy after confirmation on the intraday time frames in the form of a structure change. Sell deals can be considered from the resistance level of 1.0814 or from 1.0862 in case of a false breakout.

Technical indicators of the currency pair:

Trading recommendations

The EUR/USD currency pair trend on the hourly time frame is still bullish. The price is back above the moving averages, but the buyers’ pressure is extremely weak. The MACD indicator is in the positive zone but has no upward momentum. Buy trades are best considered after completing this correction from the support level of 1.0680. It is better to buy after confirmation on the intraday time frames in the form of a structure change. Sell deals can be considered from the resistance level of 1.0814 or from 1.0862 in case of a false breakout.

Alternative scenario:

if the price breaks down through the support level of 1.0680 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2219
• Prev. Close: 1.2286
• % chg. over the last day: +0.54%

Risky assets such as the euro and pound sterling started the week positively, backed by improving market sentiment. Ahead of the European session yesterday, there was a sale of Silicon Valley Bank to another bank First Citizens Bancshares, one of the most famous regional banks in the US. It also emerged that US authorities are considering expanding emergency lending programs to support troubled regional financial institutions in need of liquidity. This also contributed to the improvement in investor sentiments towards risky assets.

Trading recommendations

• Support levels: 1.2178,1.2112,1.2009,1.1963,1.1929,1.1843
• Resistance levels: 1.2326,1.2415

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price is trading above the moving averages, and the MACD indicator is in the positive zone, but there is weak buying pressure inside. This is not a good time to buy, as all support levels are far away from the price right now. It is better to look for sell trades on the intraday time frames from the resistance level of 1.2326, with a confirmation in the form of a false breakout.

Alternative scenario:

if the price breaks down through the 1.2112 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 130.60
• Prev. Close: 131.54
• % chg. over the last day: +0.72%

The Bank of Japan is now actively working to control the yield curve. If interest rates worldwide rise, it will put a lot of pressure on the BoJ to keep 10-year JGB yields at or below 50 basis points. On the other hand, if rates start to fall, it will put much less pressure on the BoJ, and hence the Japanese yen will start to strengthen because the central bank of Japan will not have to step in and print more currency to buy more bonds. In the medium term, things are likely to develop according to the second scenario.

Trading recommendations

• Support levels: 130.50,129.80
• Resistance levels: 131.68,133.00,133.75,135.16,136.07,137.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The price is forming a wide corridor. The MACD indicator is negative again. Such market conditions are quite difficult to find good entry points. It is best to look for buy trades from the support level of 130.50, but only with a confirmation in the form of a reverse reaction or a false breakdown. Sell positions can be looked for from the resistance level of 131.68, but also with an additional confirmation in the form of a false breakout, as the level has already been tested.

Alternative scenario:

if the price fixes above the 133.75 resistance level, the uptrend will be resumed with a high probability.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3729
• Prev. Close: 1.3659
• % chg. over the last day: -0.51%

Oil prices declined on Friday amid falling European indices and after US Energy Secretary Jennifer Granholm said it could take several years to replenish the country’s Strategic Petroleum Reserve (SPR), which worsens demand prospects. The Canadian dollar is a commodity currency, so a decline in oil prices is negative for CAD. But analysts still expect a recovery in demand from China, especially ahead of the summer, so considering the dollar index losing support from the US Federal Reserve, the Canadian dollar could take over the initiative in the medium term.

Trading recommendations

• Support levels: 1.3630,1.3590,1.3515
• Resistance levels: 1.3665,1.3721,1.3786,1.3814,1.3862

From the point of view of technical analysis, the trend on the USD/CAD currency pair is still bullish. The price has consolidated below the moving averages and below the priority change level. Under such market conditions, it is best to buy from the support level of 1.3630 but with a confirmation in the form of a false breakdown. Sell deals may be searched from the resistance level of 1.3665 but also with a confirmation in the form of a false breakout. A false break is important in the case of a reversal, as the captured liquidity must be taken away to the opposite side.

Alternative scenario:

if the price breaks out and consolidates above the resistance level of 1.3800, the uptrend will likely resume.