The Analytical Overview of the Main Currency Pairs on 2023.06.14

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0753
• Prev. Close: 1.0792
• % chg. over the last day: +0.36%

The US inflation slowed to more than a year’s low, reinforcing expectations of a halt in the Fed’s rate hike. There is a 93% chance that the US Fed will keep rates unchanged today. The US consumer prices fell from 5.5% to 5.3% year-over-year. Core inflation fell sharply from 4.9% to 4%. This was the eleventh consecutive month of decline in overall inflation and the lowest level since early 2021, but it is still double the Fed’s stated target of 2%.

Trading recommendations

• Support levels: 1.0765,1.0718,1.0688,1.0659,1.0634
• Resistance levels: 1.0762,1.0800,1.0836,1.0875,1.0904,1.0956

Alternative scenario:

The EUR/USD currency pair trend on the hourly time frame has changed to bullish. The price is trading above the moving averages. The MACD indicator is in the positive zone, but there are first signs of divergence and first signs of weakness of buyers. There is a high probability of a corrective movement. Under such market conditions, buy trades can be considered from the support level of 1.0765 or 1.0718, but only with additional confirmation on the lower time frames. Sell deals can be considered from the resistance level of 1.0800 but with confirmation in the form of 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 is trading above the moving averages. The MACD indicator is in the positive zone, but there are first signs of divergence and first signs of weakness of buyers. There is a high probability of a corrective movement. Under such market conditions, buy trades can be considered from the support level of 1.0765 or 1.0718, but only with additional confirmation on the lower time frames. Sell deals can be considered from the resistance level of 1.0800 but with confirmation in the form of a change in the structure on the lower time frames.

Alternative scenario:

if the price breaks through the support level of 1.0688 and fixes below it, the downtrend will resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2508
• Prev. Close: 1.2610
• % chg. over the last day: +0.82%

The UK labor market data yesterday pleased investors. Jobless claims fell by 13.6k, while wage growth increased from 6.1% to 6.5% year-over-year. The unemployment rate fell from 3.9% to 3.8%. All the data came out better than forecasts. A resilient labor market leaves more room for the Bank of England to tighten policy. That is why the British pound looks confident.

Trading recommendations

• Support levels: 1.2539,1.2486,1.2421,1.2391,1.2349
• Resistance levels: 1.2627

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price is trading above the moving averages. The MACD indicator is in the positive zone, but there is a cumulative divergence effect. There is a high probability of a downward correction movement. The most optimal level to buy is 1.2539, but with confirmation. It is better to look for sell deals from the 1.2627 resistance level but with confirmation in the form of reverse initiative.

Alternative scenario:

if the price breaks through the support level 1.2486 and fixes below it, the downtrend will most likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 139.60
• Prev. Close: 140.22
• % chg. over the last day: +0.44%

The soft policy of the Bank of Japan has strengthened the yen’s status as the most attractive funding currency for carry traders (carry trade is a strategy to make a profit due to different interest rates). Thanks to BoJ’s negative interest rate policy, the Japanese yen has the lowest cost of financing among 30 currencies. Even lower than the Swiss franc, another popular funding currency. And this only strengthens the fact that the yen is weakening.

Trading recommendations

• Support levels: 139.65,138.94,138.80,138.00,137.54,136.52,135.66
• Resistance levels: 140.23,140.45,141.07

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading above the levels of the moving averages. The MACD indicator has become positive again. The best way to buy is to use the support level of 139.65 but with confirmation on the lower time frames. Sell trades can be considered from the resistance level of 140.23 but with confirmation in the form of a bearish initiative. At the moment, there is no sellers’ initiative, and there is a high probability of a liquidity test above the 140.45 level.

Alternative scenario:

if the price fixes below the 138.94 support level, with a high probability the downtrend will resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3363
• Prev. Close: 1.3314
• % chg. over the last day: -0.37%

Crude oil prices rose more than 3% on Tuesday after the People’s Bank of China (PBoC) cut its short-term lending rate for the first time in 10 months, bolstering hopes that the government will take additional stimulus measures to support the slowing global economic recovery. Soft US inflation data also helped support oil prices. The Canadian dollar is a commodity currency, so rising oil prices is a factor in the strengthening of the Canadian currency.

Trading recommendations

• Support levels: 1.3293,1.3263
• Resistance levels: 1.3344,1.3384,1.3461,1.3503,1.3589,1.3647,1.3667

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 trading below the moving averages but has reached the resistance level. The MACD indicator is in the negative zone, but the divergence remains on several time frames. There is a high probability of a corrective move-up. It is better to buy from the support level of 1.3293, but only with confirmation in the form of the buyers’ initiative on the lower time frames. It is better to look for sell deals after a false breakout of the 1.3384 resistance level but with confirmation in the form of a reverse initiative.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 1.3384, the uptrend will resume with a high probability.