The Analytical Overview of the Main Currency Pairs on 2023.04.07

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0899
• Prev. Close: 1.0920
• % chg. over the last day: +0.19%

Many countries are celebrating the Good Friday holiday today, and almost all global financial exchanges will be closed. All except the US stock exchange, which will work part-time. However, an important monthly labor market report will be published today – Nonfarm Payrolls. Analysts forecast that the US economy will add 238,000 jobs in March after an increase of 311,000 in February. The unemployment rate is forecast to remain at a low of 3.6%. With low liquidity due to the closure of other financial exchanges in Asia and Europe, this report may cause a significant spike in volatility.

Trading recommendations

• Support levels: 1.0881,1.0839,1.0770,1.0680,1.0519,1.0482
• Resistance levels: 1.0937,1.0924,1.0988,1.1032

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price tested a false-breakout zone yesterday. The MACD indicator has become inactive, and the price is forming a narrow flat. It is better to buy from the support level of 1.0881 or 1.0839, but only with a false breakdown confirmation. Sell positions can be considered from the resistance level of 1.0937, but only on the condition of a false breakout.

Alternative scenario:

if the price breaks down through the support level of 1.0770 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2455
• Prev. Close: 1.2437
• % chg. over the last day: +0.15%

March’s data showed another rise in construction output in the UK, helped by a modest increase in new orders. The office construction category saw the fastest rise in business activity, while residential construction was the weakest area. The overall PMI for the construction sector fell from 54.6 to 50.7 and moved closer to contraction territory, which is below the 50 level.

Trading recommendations

• Support levels: 1.2422,1.2359,1.2320,1.2267,1.2178,1.2112,1.2009,1.1963
• Resistance levels: 1.2519

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The MACD indicator is in the negative zone, but volatility has reduced to a minimum. Under such market conditions, it is best to consider buying from the support level of 1.2422 but with a confirmation in the form of a false breakdown, as the level has already been tested. Or, in the case of a deeper correction, look for buys from the 1.2359. Sell trades are best looked for on intraday time frames but with confirmation in the form of a downward structure on lower timeframes and with short targets.

Alternative scenario:

if the price breaks down through the 1.2267 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 131.29
• Prev. Close: 131.77
• % chg. over the last day: +0.36%

The Japanese yen could remain firm against the US dollar amid fears of a global economic slowdown following a deluge of disappointing macroeconomic data. The G10 economic activity index has fallen sharply since late March to its lowest level since early February, raising the risk that the months-long string of optimistic data has run out of steam. The Japanese yen also often acts as a safe haven currency, especially when the dollar index is losing strength. But it is always worth remembering that the interest rate differential between the Bank of Japan and the US Federal Reserve is still widening, which deprives the Japanese yen of fundamental support in the medium term.

Trading recommendations

• Support levels: 130.62,127.80
• Resistance levels: 131.91,132.35,133.83,133.16,135.11,136.07,137.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. A price consolidation below the 130.91 support level will change the trend in the current time frame. The MACD indicator is positive again. Under such market conditions, buy trades should be sought after a downtrend line breakout. Sell positions can be sought from the resistance level of 132.35 or 133.15, but only with additional confirmation and short targets.

Alternative scenario:

if the price fixes below the 130.91 support level, the downtrend will be resumed with a high probability.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3451
• Prev. Close: 1.3491
• % chg. over the last day: +0.30%

Canadian labor market data showed surprising strength for the fourth consecutive month, rebutting expectations of a slowing economy. The economy added 34,700 jobs in March, and the unemployment rate remained at 5%, close to a record low. The data came in better than forecasts. According to analysts for the Bank of Canada, a robust labor market will keep the door open for new interest rate hikes.

Trading recommendations

• Support levels: 1.3456,1.3400
• Resistance levels: 1.3535,1.3564,1.3616,1.3644,1.3694,1.3722,1.3786

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bearish. The price forms a “flag” pattern, which is a trend continuation pattern, not a reversal. The MACD indicator has become positive, but there is no buying pressure, and there are signs of divergence. Under such market conditions, purchases are best sought from the support level of 1.3456 but with confirmation on the lower time frames. Sell deals can be sought from the resistance level of 1.3535, but only with confirmation in the form of reverse initiative. Also, selling will be appropriate in case of an impulse breakdown of the lower flag line.

Alternative scenario:

if the price breaks out and consolidates above the resistance level of 1.3564, the uptrend will likely resume.