The Analytical Overview of the Main Currency Pairs on 2023.04.27

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0970
• Prev. Close: 1.1038
• % chg. over the last day: +0.62%

The US will publish the quarterly GDP report today, as well as weekly labor market data. GDP is expected to show growth of 2% for the quarter, while jobless claims are expected to remain flat. The way to interpret this data is that if GDP is better than expected and jobless claims are not increasing, it is a sign of a solid economy, which will act as a factor for the dollar to strengthen in a period of rising rates. GDP growth, along with rising jobless claims, would be a mixed report. If GDP and labor market data come out worse than forecast, it could cause the dollar to sell off amid an increased likelihood of a recession scenario.

Trading recommendations

• Support levels: 1.1015,1.0993,1.0895,1.0830,1.0803,1.0770,1.0680
• Resistance levels: 1.1075,1.1185

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is trading above the moving averages, and the MACD indicator is in the positive zone but with signs of divergence. At the same time, the price failed to consolidate above the level of 1.1075 yesterday. Under such market conditions, buy trades should be considered from the support level of 1.1015 or 1.0993. Sell deals can be considered from the resistance level of 1.1075, but only with confirmation in the form of reverse initiative and short targets.

Alternative scenario:

if the price breaks down through the support level of 1.0963 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2403
• Prev. Close: 1.2467
• % chg. over the last day: +0.51%

Last year the UK recorded zero annual growth in output per hour worked. The Office for National Statistics figures underscores the challenges facing the UK after the COVID-19 pandemic and its long-term struggles with productivity. Weak business investment, higher trade barriers due to Brexit, and a lack of human resources and management skills are among the reasons for the decline in productivity.

Trading recommendations

• Support levels: 1.2420,1.2391,1.2343,1.2320,1.2267,1.2178,1.2112
• Resistance levels: 1.2506,1.2519,1.2643

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The buyer’s pressure is back. The price has updated the weekly maximum. The MACD indicator is in the positive zone again, but there are signs of divergence. It is better to buy from the support level of 1.2420 but with confirmation in the form of a bullish initiative. Sell deals are best to look for on intraday time frames from the resistance level of 1.2506 or 1.2519 but with confirmation in the form of a structure change on the lower time frames.

Alternative scenario:

if the price breaks down through the 1.2386 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 133.72
• Prev. Close: 133.65
• % chg. over the last day: -0.05%

A former senior Japanese currency diplomat believes that the Bank of Japan (BOJ) intends to maintain its monetary policy settings on Friday and will face difficulties in raising interest rates from ultra-low levels in the future due to the weak economy. Given that inflation is above the BOJ’s 2% target, some market participants are betting that the central bank will gradually abandon its controversial yield-control policy. The new Governor of the Bank of Japan, Kazuo Ueda, has repeatedly pointed to the possibility of an adjustment to the YCC. It will be a strong strengthening factor for the Japanese yen.

Trading recommendations

• Support levels: 133.39,132.70,132.02,131.82,130.62
• Resistance levels: 133.92,134.73,135.11,136.07,137.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price has reached the support level and demonstrated a bullish reaction. The MACD indicator is in the negative zone, but there are signs of the strength of buyers. Under such market conditions, it is best to look for buy deals from the support level of 133.39 or after a true breakout of 133.91. The best option to enter to sell would be the resistance level of 134.73 or 135.11 but with confirmation in the form of a false breakdown 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: 1.3625
• Prev. Close: 1.3634
• % chg. over the last day: +0.07%

According to published meeting minutes, the Bank of Canada (BoC) did not raise interest rates earlier this month as it wanted to wait for more evidence of the effect of previous monetary tightening on economic growth and inflation. While leaving rates unchanged this month, the BoC also said it would need to stay restrictive longer and that money market expectations of a rate cut later this year are not a likely scenario. Core inflation in Canada (excluding food and energy costs) is expected to remain above 3% through the fourth quarter of this year.

Trading recommendations

• Support levels: 1.3615,1.3563,1.3468,1.3448,1.3409,1.3341,1.3267
• 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 moving averages support the trend. The price is now forming a narrow flat. 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. But without a reverse initiative, it is premature to talk about a correction. It is better to look for buy deals from the support level of 1.3615 but with confirmation. Sell positions are better to look for from the resistance level of 1.3695, but only with confirmation in the form of a false breakdown.

Alternative scenario:

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