The Analytical Overview of the Main Currency Pairs on 2023.04.25

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0988
• Prev. Close: 1.1045
• % chg. over the last day: +0.52%

The IFO Business Climate Index showed that business sentiment in Germany had improved slightly. The index rose to 93.6 points in April from 93.2 points in March. This was due to improved company expectations. German business worries are easing, but the economy still lacks momentum. But overall, the eurozone’s largest economy has avoided recession this winter. Now the main question is how long business activity will show positive momentum with rising interest rates.

Trading recommendations

• Support levels: 1.0999,1.0895,1.0830,1.0803,1.0770,1.0680
• Resistance levels: 1.1058,1.1185

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The European currency is showing strength again. The price is trading above the moving averages, and the MACD indicator is showing signs of buying strength. Under such market conditions, buy trades are best considered from the moving averages, counting on trend continuation. Sell deals can be considered from the 1.1058 resistance level, but only with confirmation in the form of a false breakout and a change of structure on the lower time frames.

Alternative scenario:

if the price breaks down through the support level of 1.0895 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2432
• Prev. Close: 1.2485
• % chg. over the last day: +0.43%

The British pound remains strong against the US dollar. Improving retail sales and PMIs, strong labor market data, along with solid inflation led to a hawkish review of the Bank of England (BoE) interest rate probability. Markets now expect three additional 0.25% rate hikes this year from the BoE. While this is probably an overestimate, it is clear that the Bank of England will definitely not cut interest rates this year. And with the US Fed likely to hit the pause button in May, the British pound has a fundamental component for medium-term strength against the dollar.

Trading recommendations

• Support levels: 1.2469,1.2391,1.2343,1.2320,1.2267,1.2178,1.2112
• 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 still bullish. The price is trading above the moving averages. The MACD indicator is in the positive zone with no signs of reversal. Buying is best considered from the support level of 1.2469 but with confirmation. Sell trades are best to look for on intraday timeframes from the resistance level of 1.2519 but with confirmation in the form of a false breakout.

Alternative scenario:

if the price breaks down through the 1.2343 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 134.00
• Prev. Close: 134.25
• % chg. over the last day: +0.19%

Bank of Japan Governor Kazuo Ueda said yesterday that the Bank of Japan should maintain monetary easing as trend inflation is still below 2%, and consumer inflation is likely to approach its peak and slow down in the coming months. It is becoming clear that the Bank of Japan will not change its monetary policy settings at its first meeting under the new governor. That’s a negative factor for the JPY, as the interest rate differential with other leading central banks is not in favor of the Japanese currency.

Trading recommendations

• Support levels: 133.09,132.02,131.82,130.62
• Resistance levels: 134.73,135.11,136.07,137.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading at the level of the moving averages. The MACD indicator has become inactive, but buying pressure is still inside the day. Under such market conditions, it is best to look for buy deals from the support level of 134.09. The best option to open the sell positions would be the 134.73 or 135.11 resistance level but with confirmation in the form of a false breakout and a change in the structure on the lower time frames.

Alternative scenario:

if the price fixes below the 133.11 support level, the downtrend will be resumed with a high probability.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3529
• Prev. Close: 1.3540
• % chg. over the last day: +0.08%

The Canadian dollar is a commodity-based currency as oil is Canada’s key export commodity, which makes the country’s economy sensitive to the “black gold” price fluctuations. Oil prices rose on Monday on higher travel demand ahead of the May holidays. This helped stop the decline of the Canadian dollar. According to analysts, the demand for oil will increase every day as summer approaches, so oil prices will continue to rise, which will support the Canadian currency.

Trading recommendations

• Support levels: 1.3484,1.3448,1.3409,1.3341,1.3267
• Resistance levels: 1.3563,1.3616,1.3644

From the point of view of technical analysis, the trend on the USD/CAD currency pair has changed to bullish. The price is trading at the level of the moving averages, and a flat structure is forming. The MACD indicator is in the positive zone, but the buyers’ pressure is weak, which along with the divergence, increases the probability of a corrective movement. It is better to look for buy deals after the pullback from the 1.3484 support level but with confirmation. It is better to buy from the resistance level of 1.3563, but only with a confirmation in the form of a false breakout.

Alternative scenario:

if the price breaks out and consolidates below the support level of 1.3409, the downtrend will likely resume.