The Analytical Overview of the Main Currency Pairs on 2023.06.05

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0760
• Prev. Close: 1.0707
• % chg. over the last day: -0.49%

The monthly Nonfarm Payrolls report showed that the US economy added 339,000 jobs in May (forecast 190K, previous 294K). The unemployment rate rose to 3.7% (forecast 3.5%, previous 3.4%). Year-on-year wage growth slowed to 4.3%. Labor market data came out mixed, with signs of weakness. For the US Fed, this is a sign that interest rates are starting to have a negative impact on the labor market. The probability of a pause in June rose to 75% after the news was released.

Trading recommendations

• Support levels: 1.0693,1.0683,1.0659,1.0634
• Resistance levels: 1.0800,1.0836,1.0875,1.0904,1.0956

Alternative scenario:

The EUR/USD currency pair trend on the hourly time frame has changed to bullish. The price has been corrected to the Fibonacci buy zone. The MACD indicator is in the negative zone, but the sellers’ pressure is disappearing. Under such market conditions, buy trades can be considered from the support level of 1.0693 or 1.0683, but only with additional confirmation in the form of a buyers’ initiative. Sell deals can be considered from the resistance level of 1.0800 but with confirmation in the form of a false breakout and a change in the structure on the lower time frames.

Technical indicators of the currency pair:

Trading recommendations

The EUR/USD currency pair trend on the hourly time frame has changed to bullish. The price has been corrected to the Fibonacci buy zone. The MACD indicator is in the negative zone, but the sellers’ pressure is disappearing. Under such market conditions, buy trades can be considered from the support level of 1.0693 or 1.0683, but only with additional confirmation in the form of a buyers’ initiative. Sell deals can be considered from the resistance level of 1.0800 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 breaks through the support level of 1.0634 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2523
• Prev. Close: 1.2447
• % chg. over the last day: -0.61%

Leading economists are predicting that the Bank of England will raise the cost of borrowing at its June meeting, and most expect rates to be raised to at least 5.00% (current level 4.5%). Analysts are predicting two 0.25% hikes through the fall. General yield expectations continue to support the British currency in global markets.

Trading recommendations

• Support levels: 1.2432,1.2392,1.2322
• Resistance levels: 1.2546,1.2569,1.2612

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame has changed to bullish. The situation is similar to the eurodollar. The price has corrected to the buy zone according to Fibonacci. The MACD indicator is in the negative zone, but sellers’ pressure is weak. The best level to buy is the 1.2432 level but with confirmation. It is better to look for sell deals from the resistance level of 1.2545 but with a confirmation in the form of a false breakout and a change of the initiative on the lower time frames.

Alternative scenario:

if the price breaks through the support level 1.2349 and fixes below it, the downtrend will most likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 138.77
• Prev. Close: 139.95
• % chg. over the last day: +0.85%

Bank of Japan Governor Kazuo Ueda said Friday that the central bank has no set deadline for reaching the 2% inflation target but will aim to reach it as soon as possible. Speaking to parliament, Ueda said the country’s trend inflation is likely to strengthen in the future, but it will take time to reach the bank’s 2% target. Analysts expect that the Bank of Japan will not change its monetary policy before the end of the year. The medium-term outlook looks rather gloomy for the Japanese yen.

Trading recommendations

• Support levels: 139.48,138.81,138.00,137.54,136.52,135.66,135.15,134.67
• Resistance levels: 140.38,140.70,141.07

From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bullish. On Friday, buyers defended their positions, and the price showed a bullish reaction. The MACD indicator is in the positive zone, with no signs of a reversal. To buy, it is best to wait for a pullback to the support level of 139.48. Sell trades can be considered from the resistance level of 140.38 but with confirmation in the form of a bearish initiative.

Alternative scenario:

if the price fixes below the 138.80 support level, with a high probability the downtrend will resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3445
• Prev. Close: 1.3425
• % chg. over the last day: -0.15%

According to preliminary data, OPEC+ countries have agreed to cut oil production by 3.66 million BPD. What does this mean for ordinary traders? With demand picking up in the summer months, the production cut will be a factor in strengthening oil in the coming weeks. OPEC+ countries will try by all means to keep oil above $70 a barrel. The fundamental bias for oil remains bullish. The Canadian dollar, being a commodity currency, will benefit from higher oil prices.

Trading recommendations

• Support levels: 1.3436,1.3397,1.3267
• Resistance levels: 1.3503,1.3589,1.3647,1.3667,1.3695

From the point of view of technical analysis, the trend on the USD/CAD currency pair in the medium term is bearish. The price is now forming a flat accumulation in the form of a narrowing (symmetric) triangle – a trend continuation pattern. The MACD indicator is in the negative zone with signs of divergence. Under such market conditions, it is better to look for sell deals after the true break of any sides of the triangle. Buying is best sought from the resistance level of 1.3397, but only with confirmation in the form of a change in the structure on the lower time frames.

Alternative scenario:

by JustMarkets, 2023.06.05