The Analytical Overview of the Main Currency Pairs on 2023.04.14

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0991
• Prev. Close: 1.1046
• % chg. over the last day: +0.50%

ECB Governing Council representative Boštjan Vasle, who heads the Central Bank of Slovenia, said yesterday that the ECB should continue to raise rates, given the persistence of core inflation in the eurozone. The politician added that the labor market and wage developments are the most important factors in assessing inflation, and they will have the final say on whether to opt for a 0.25% or 0.5% increase at the May meeting. The European currency continues to strengthen on the back of the dollar index weakness.

Trading recommendations

• Support levels: 1.1032,1.0991,1.0937,1.0894,1.0830,1.0803,1.0770,1.0680
• Resistance levels: 1.1185

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price made a new monthly maximum, and it is steadily going up and breaking through all the resistance levels. The MACD indicator points to buying pressure, but there are first signs of weakness. Buy trades are best considered after the correction to the support level of 1.0991 or 1.0937, but only with confirmation on the lower time frames. It is also possible to join the trend from the levels of the moving averages. Sell positions can be considered from the resistance level of 1.1185, but only with a confirmation in the form of a false breakout.

Alternative scenario:

if the price breaks down through the support level of 1.0894 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2482
• Prev. Close: 1.2522
• % chg. over the last day: +0.32%

The latest data showed that the UK economy did not show any growth over the last month, but in annual terms, GDP was up by 0.5%. Over the last quarter, GDP added 0.1%. Industrial production fell by 0.2% (-3.1% y/y), and manufacturing output was flat in February (-2.4% y/y). But analysts believe that the worst for the UK economy is over, and the second quarter will be more productive, with a GDP forecast of plus 0.3%.

Trading recommendations

• Support levels: 1.2476,1.2428,1.2398,1.2320,1.2267,1.2178,1.2112
• Resistance levels: 1.2519,1.2643

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, the MACD indicator is positive, and buying pressure remains, but the divergence is starting to form, which means that upside potential is starting to weaken. Under such market conditions, it is best to buy from the support level of 1.2476 or 1.2428, but with a confirmation in the form of reverse initiative. Sell trades are best sought on intraday time frames from the resistance level of 1.2519 but with confirmation in the form of an impulse return below the level.

Alternative scenario:

if the price breaks down through the 1.2398 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 133.11
• Prev. Close: 132.56
• % chg. over the last day: -0.41%

The Japanese yen is strengthening on the back of a dollar index weakness. The dollar declined yesterday as the producer price index, which shows the rate of inflation between factories and plants, declined by 0.5% over the last month, indicating that inflationary pressures in the US are easing. The Japanese yen has also received support from new rumors that the new Governor of the Bank of Japan, Kazuo Ueda, is considering options to change monetary policy toward normalization.

Trading recommendations

• Support levels: 131.82,130.62
• Resistance levels: 133.02,133.74,135.11,136.07,137.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The MACD indicator is in the positive zone, and there is buying pressure inside the day. Now the price has deviated strongly from the moving averages, so it is better to wait for a downward correction wave to buy. Sell deals can be sought from the resistance level of 133.74, but only with additional confirmation on the lower time frames and short targets.

Alternative scenario:

if the price fixes below the 131.82 support level, the downtrend will be resumed with a high probability.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3441
• Prev. Close: 1.3338
• % chg. over the last day: -0.77%

Bank of Canada Governor Tiff Macklem said yesterday that interest rates could still be raised if inflation stalls on the way to the 2% target. Macklem also added that, at the moment, there is little spread of financial stress in Canada. The Canadian dollar is on a path of strengthening due to a lower dollar index and higher oil prices in the medium term. But yesterday, black gold prices were down due to negative OPEC forecasts for summer oil demand.

Trading recommendations

• Support levels: 1.3267
• Resistance levels: 1.3387,1.3488,1.3515,1.3563,1.3616,1.3644

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bearish. The price is trading below the moving averages. The MACD indicator is in the negative zone, but the indicator is oversold, and the divergence begins to form on several time frames. Given that there are no significant support levels to be seen here, the price may continue to fall to the support level of 1.3267. Sell deals can be sought from the resistance level of 1.3387, but only with a confirmation in the form of a reverse initiative. It is best to look for deals to buy after the appearance of any initiative of buyers, which is not observed at the moment.

Alternative scenario:

if the price breaks out and consolidates above the resistance level of 1.3488, the uptrend will likely resume.