The Analytical Overview of the Main Currency Pairs on 2023.06.22

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0919
• Prev. Close: 1.0985
• % chg. over the last day: +0.60%

Two German policymakers from the European Central Bank said Wednesday that eurozone inflation remains resilient, and a longer period of high-interest rates may be needed to contain it, partly because of the exceptionally strong labor market. Economists currently expect a 0.25 percent rate hike at the ECB’s July meeting, and there is a 50 percent chance of another rate hike in September or October. The rate is expected to peak at 4.5%. Trading recommendations

Trading recommendations

• Support levels: 1.0845,1.0785,1.0719,1.0688,1.0659,1.0634
• Resistance levels: 1.0995,1.1185

Alternative scenario:

The EUR/USD currency pair trend on the hourly time frame has changed to bullish. The MACD indicator has become positive, but the divergence has increased. Under such market conditions, buy trades can be considered after a small correction from the support level of 1.0941, but only with additional confirmation on the lower time frames. Sell deals can be considered from the resistance level of 1.0995 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 MACD indicator has become positive, but the divergence has increased. Under such market conditions, buy trades can be considered after a small correction from the support level of 1.0941, but only with additional confirmation on the lower time frames. Sell deals can be considered from the resistance level of 1.0995 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 1.0844 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2751
• Prev. Close: 1.2766
• % chg. over the last day: +0.12%

UK inflation remained unchanged at 8.7% in May (expectation of 8.4%), and as the contribution of energy and food declined, this means core inflation actually rose to 7.1% from 6.8% on an annualized basis. The Bank of England pays the most attention to service sector inflation because it tends to show more stable and less volatile trends. And yesterday’s report showed an increase in this indicator. Such an inflationary shock might prompt the Bank of England to increase interest rates by 0.5% at today’s meeting.

Trading recommendations

• Support levels: 1.2676,1.2627,1.2539,1.2486,1.2421,1.2391,1.2349
• 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 at the level of the moving averages and forming a price corridor. The MACD indicator has become inactive. There is a high probability of correction to the nearest support levels. The most optimal level to buy is 1.2676 but with confirmation. It is best to consider sell deals from the resistance level of 1.2801 but with confirmation.

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: 141.40
• Prev. Close: 141.89
• % chg. over the last day: +0.34%

The US dollar fell against a basket of world currencies on Wednesday after Federal Reserve Chairman Jerome Powell suggested the central bank was nearing the end of its tightening cycle. The divergent policies of the US Federal Reserve and the Bank of Japan are not playing in favor of the Japanese currency. But the yen is approaching price levels where the Japanese government can respond with intervention. With interventions, the national currency strengthens sharply for a short time.

Trading recommendations

• Support levels: 141.47,141.23,140.16,139.85,139.23,138.81
• Resistance levels: 142.12,142.45

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading at the levels of moving averages and forming a volatile corridor. The MACD indicator is inactive, but there is a divergence. The most suitable level to buy would be 141.47 or 141.23 but with confirmation on the lower time frames. Sell trades can be considered from the resistance level of 142.45 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: 1.3231
• Prev. Close: 1.3163
• % chg. over the last day: -0.51%

As the minutes of the monetary policy meeting showed, the Bank of Canada agreed that fresh economic data would determine the need for further rate hikes. The minutes indicate that monetary policy does not look restrictive enough, with household spending picking up, consumer confidence improving, and the disinflationary momentum slowing. There is about a 72% chance that the bank will raise the discount rate by 25 basis points on July 12.

Trading recommendations

• Support levels: 1.3135
• Resistance levels: 1.3200,1.3293,1.3317,1.3357,1.3384,1.3461,1.3503

From the point of view of technical analysis, the trend on the USD/CAD currency pair in the medium term is bearish. The price has been updated to the yearly minimum. The MACD indicator is in the negative territory, and there is a divergence. It is better to buy from the 1.3135 support level but with confirmation on the lower time frames. It is better to look for sell deals from the resistance level of 1.3200 but with confirmation in the form of reverse initiative.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 1.3293, the uptrend will resume with a high probability.