The Analytical Overview of the Main Currency Pairs on 2023.06.19

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0941
• Prev. Close: 1.0941
• % chg. over the last day: 0.0%

In the Eurozone, the inflation rate has not changed compared to the previous month. Consumer inflation remained at 6.1% y/y, while core inflation (excluding food and energy prices) remained at 5.3% y/y. ECB spokesman Francois Villeroy de Galo said yesterday that ECB rates are already in restrictive territory. That means the ECB is nearing the end of its tightening cycle. Most likely, the rate hike at the July or September meeting will be the last hike in this tightening cycle.

Trading recommendations

• Support levels: 1.0845,1.0785,1.0719,1.0688,1.0659,1.0634
• Resistance levels: 1.0942,1.0956,1.0968,1.0995

Alternative scenario:

The EUR/USD currency pair trend on the hourly time frame has changed to bullish. The price tested the resistance level of 1.0956, where the sellers showed a reaction. The MACD indicator is in the positive zone but with divergence. Under such market conditions, buy trades can be considered after a small correction from the support level of 1.0845, but only with additional confirmation on the lower time frames. Sell deals can be considered from the resistance level of 1.0942 or 1.0968 but with confirmation 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 tested the resistance level of 1.0956, where the sellers showed a reaction. The MACD indicator is in the positive zone but with divergence. Under such market conditions, buy trades can be considered after a small correction from the support level of 1.0845, but only with additional confirmation on the lower time frames. Sell deals can be considered from the resistance level of 1.0942 or 1.0968 but with confirmation on the lower time frames.

Alternative scenario:

if the price breaks through the support level of 1.0785 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2776
• Prev. Close: 1.2784
• % chg. over the last day: +0.32%

The British pound has risen to a fourteen-month high against the US dollar, and economic events this week seem likely to encourage further gains. This week will see official inflation data for May on Wednesday and the Bank of England’s June monetary policy decision on Thursday. Economists expect a moderate decline in inflation and a quarter percentage point increase in the key bank rate this week. That would raise the rate to 4.75%, the highest level since April 2008.

Trading recommendations

• Support levels: 1.2677,1.2627,1.2539,1.2486,1.2421,1.2391,1.2349
• Resistance levels: 1.2801,1.2991

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 buyers’ pressure is weakening, the price is technically overbought, plus there is a divergence. There is a high probability of a small correction. The best level to buy is the level of 1.2677 but with confirmation. It is better to look for sell deals after the impulse return under the level of 1.2801.

Alternative scenario:

if the price breaks through the support level 1.2538 and fixes below it, the downtrend will most likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 140.25
• Prev. Close: 141.79
• % chg. over the last day: +1.09%

Trading recommendations

Alternative scenario:

The USD/JPY currency pair rose on Friday, breaking through 141.50 and reaching new multi-month highs after the Bank of Japan maintained its ultra-soft stance and left unchanged its Yield Curve Control Program (YCC). The Japanese Central Bank’s approach to protecting the country’s weak recovery and nascent inflation trend after decades of deflation is likely to put pressure on the Japanese yen in the near term. But if the yen continues to weaken rapidly, the Japanese government can intervene and support the national currency through intervention, as it did last year.

Technical indicators of the currency pair:

The USD/JPY currency pair rose on Friday, breaking through 141.50 and reaching new multi-month highs after the Bank of Japan maintained its ultra-soft stance and left unchanged its Yield Curve Control Program (YCC). The Japanese Central Bank’s approach to protecting the country’s weak recovery and nascent inflation trend after decades of deflation is likely to put pressure on the Japanese yen in the near term. But if the yen continues to weaken rapidly, the Japanese government can intervene and support the national currency through intervention, as it did last year.

Trading recommendations

• Support levels: 140.16,139.85,139.23,138.81
• Resistance levels: 142.45

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 moving averages. The MACD indicator is in the positive zone, there are the first signs of divergence, but the price is likely to make one more bullish wave. To buy, it is best to wait for a correction. The most suitable support level will be 140.16, but with confirmation on the lower time frames. Sell trades can be considered from the 142.45 resistance level but with confirmation in the form of a bearish initiative.

Alternative scenario:

if the price fixes below the 139.85 support level, with a high probability the downtrend will resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3214
• Prev. Close: 1.3195
• % chg. over the last day: -0.14%

According to a survey by Nanos Research Group, about 64% of Canadians believe that higher interest rates have a negative or somewhat negative effect on their personal spending. This is at odds with retail reports, which point to a rebound in consumption. The latest gross domestic data showed that household consumption rebounded in the first quarter, rising at an annualized rate of 5.7%, the fastest pace since early last year. The Canadian dollar strengthened last week on the back of a lower dollar index and higher oil prices.

Trading recommendations

• Support levels: 1.3135
• Resistance levels: 1.3226,1.3293,1.3317,1.3357,1.3384,1.3461,1.3503

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. The MACD indicator is in the negative zone, but there is still a divergence on several time frames. Sellers’ pressure is weakening. It is best to look for purchases from the 1.3226 level, but only after the price impulsively returns behind the level. It is better to look for sell deals from the resistance level of 1.3226 or 1.3293 but with confirmation in the form of a reverse initiative.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 1.3355, the uptrend will resume with a high probability.