The Analytical Overview of the Main Currency Pairs on 2023.04.17

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1045
• Prev. Close: 1.0992
• % chg. over the last day: -0.48%

The latest data for European countries showed a decline in inflationary pressures in the region. Inflation in France fell from 6.3% to 5.7% y/y. In Germany, the inflation rate fell from 8.7% to 7.4%, and in Spain, consumer prices showed a decline from 6.0% to 3.1% y/y. Inflation data for Italy and the Eurozone will be released this week. Overall inflation is expected to fall further, but the main focus will be on core inflation data (excluding food and energy prices), which still shows no signs of slowing down. If core inflation does not start to decline, the ECB may stay on an aggressive path of rate hikes.

Trading recommendations

• Support levels: 1.0937,1.0894,1.0830,1.0803,1.0770,1.0680
• Resistance levels: 1.1016,1.1041,1.1185

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is correcting. The MACD indicator indicates sellers’ pressure inside the day. Buy trades are best considered after a correction to the support level of 1.0937 or 1.0894, but only with confirmation on the lower time frames. Sell positions can be considered from the resistance level of 1.1016, 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: 1.2519
• Prev. Close: 1.2413
• % chg. over the last day: -0.85%

The Bank of England has a difficult decision to make next month as it considers another potential rate hike. Bank of England spokesman Tenreyro mentioned on Friday that the bank needs to be patient about the impact of past rate hikes on inflation, signaling that there is disagreement within the central bank on a further decision. Implied market probabilities show rising expectations of a 25 basis point hike in May (67% probability).

Trading recommendations

• Support levels: 1.2398,1.2320,1.2267,1.2178,1.2112
• Resistance levels: 1.2469,1.2519,1.2643

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price has corrected to the buying zone, but it is necessary to wait for a change in the structure on the lower time frames to open trades. Buy deals are best considered after a true breakout of the 1.2417 level. Sell trades are best sought on intraday time frames from the resistance level of 1.2469 but with confirmation in the form of a reverse initiative.

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: 132.56
• Prev. Close: 133.75
• % chg. over the last day: +0.90%

Lots of macro statistics will be published this week in Japan. The most interesting thing will be the inflation data at the end of the week. There will also be a trade balance report for March and PMI data for the manufacturing and services sectors. All of these figures will help gauge the country’s economic health. Also, this data may influence the Bank of Japan’s new leadership. In less than two weeks, the Bank of Japan will hold a monetary policy meeting under a new governor, which attracts particular attention from investors.

Trading recommendations

• Support levels: 133.02,131.82,130.62
• Resistance levels: 134.04,135.11,136.07,137.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading above the moving averages again, and there is bullish pressure inside the day. To buy, it is best to wait for a pullback to the nearest support levels, as the price has deviated strongly and indicators are pointing to overbought. Buy deals may be sought from the support level of 133.02, but not before. The best option for entry to sell will be a false breakout of the 134.04 resistance level and confirmation in the form of a change in the price structure on the lower time frames

Alternative scenario:

if the price fixes below the 132.00 support level, the downtrend will be resumed with a high probability.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3335
• Prev. Close: 1.3359
• % chg. over the last day: +0.18%

Bank of Canada Governor Tiff Macklem said on Friday that it is too early to talk about a rate cut, with the Bank of Canada keeping rates high for an extended period. But the banker hinted that once economic growth starts to show signs of slowing, the central bank may reconsider its decision. Also, it should not be forgotten that the Canadian dollar is a commodity currency. Crude oil prices lost much of Friday’s upward momentum after hawkish remarks from Fed member Waller in favor of further rate hikes. This gave some confidence to the dollar late last week.

Trading recommendations

• Support levels: 1.3341,1.3267
• Resistance levels: 1.3396,1.3427,1.3488,1.3515,1.3563,1.3616,1.3644

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bearish. The price is correcting. The MACD indicator has become inactive. It is best to expect the completion of the corrective wave in the premium zone (highlighted on the chart). It is best to look for sell deals from the resistance level of 1.3396 or 1.3427, but only with confirmation in the form of a reverse initiative. Buy trades are best sought from the support level of 1.3341, but only with confirmation on the lower time frames and short targets.

Alternative scenario:

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