The Analytical Overview of the Main Currency Pairs on 2023.04.26

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1045
• Prev. Close: 1.0973
• % chg. over the last day: -0.65%

In the US, a Conference Board survey showed that consumer confidence fell to a nine-month low. The US Federal Reserve Richmond’s Manufacturing Index also fell to minus 10 in April, the fourth consecutive month of decline. The weak consumer confidence report and lower manufacturing data increased the dollar’s appeal as a safe haven. The euro temporarily lost momentum. ECB board spokeswoman Isabel Schnabel said a 50 basis point rate hike is not out of the question and will depend on inflation data due out two days before the May meeting.

Trading recommendations

• Support levels: 1.0895,1.0830,1.0803,1.0770,1.0680
• Resistance levels: 1.1015,1.1033,1.1058,1.1185

The trend on the EUR/USD currency pair on the hourly time frame is still bullish. The European currency has temporarily lost the initiative. The price is trading below the moving averages, and the MACD indicator has become negative. Under such market conditions, it is best to buy from the moving averages of the uptrend line. A breakdown of this line can trigger a sell-off to the support at 1.0895. Sell positions can be considered from the resistance level of 1.1015 or 1.1033, but only with confirmation and short targets.

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: 1.2478
• Prev. Close: 1.2409
• % chg. over the last day: -0.55%

Growth in the dollar index led to a decrease in GBP/USD yesterday. But there is no talk about a reversal. The US Federal Reserve (Fed) is expected to raise its key borrowing rate by 25 basis points on May 3, and there is a high chance that the Fed will then suspend its rate hike cycle. For its part, the Bank of England (BoE) also plans to raise the rate by 0.25% at its May 11 meeting and plans for more hikes thereafter. Thus, from a monetary policy perspective, the interest rate differential will start to narrow after the May meetings, which is positive for the British currency.

Trading recommendations

• Support levels: 1.2391,1.2343,1.2320,1.2267,1.2178,1.2112
• Resistance levels: 1.2417,1.2469,1.2519,1.2643

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is still bullish. The price has corrected and is trading below the moving averages. The MACD indicator is in the negative zone. Buy deals are best considered from the support level of 1.2391 but with confirmation in the form of a bullish initiative. Sell trades are best to look for on intraday time frames from the resistance level of 1.2469 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: 134.19
• Prev. Close: 133.72
• % chg. over the last day: -0.35%

Despite the increase in the USD/JPY index, the USD/JPY currency pair dropped yesterday. This indicates that the Japanese yen, as a defensive asset, was bought more than the USD. It is quite possible that the Bank of Japan may still have a surprise for its Friday meeting. The new governor of the BoJ indicated this week that the BoJ would keep all monetary policy settings. However, if there are mentions that the BoJ is planning to phase out its stimulus program or is planning to lift its control of the government bond yield curve, that will be a strong factor for the JPY to strengthen.

Trading recommendations

• Support levels: 133.12,132.02,131.82,130.62
• Resistance levels: 134.02,134.73,135.11,136.07,137.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price has corrected to the buy zone. The MACD indicator is in the negative zone, but there are signs of reversal. Under such market conditions, it is best to look for buy deals from the support level of 133.12 or after a true breakout of 134.02. The best option to enter the sell positions would be the resistance level of 134.73 or 135.11, but with a confirmation in the form of a false breakout and 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: 1.3540
• Prev. Close: 1.3625
• % chg. over the last day: +0.63%

The Canadian dollar is a commodity currency which depends not only on the monetary policy of the Bank of Canada but also on oil prices. Oil fell by 2% on Tuesday as growing concerns about slowing US economic growth and a stronger dollar outweighed hopes for higher demand in China and a decline in US oil inventories. This situation is very negative for the Canadian currency. The US will release crude oil inventories today, where a decline is again forecast. A drop in inventories usually leads to a temporary jump in oil prices.

Trading recommendations

• Support levels: 1.3563,1.3484,1.3468,1.3448,1.3409,1.3341,1.3267
• Resistance levels: 1.3695,1.3814

From the point of view of technical analysis, the trend on the USD/CAD currency pair has changed to bullish. The price is steadily growing, breaking through all resistance levels on its way, while the support levels are increasing. The MACD indicator is in the positive zone, but there are signs of divergence on several timeframes, which increases the probability of a corrective movement. It is best to look for buy deals after a pullback to the 1.3564 support level but with confirmation. Sell deals are best to look for from the resistance level of 1.3695, 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.