The Analytical Overview of the Main Currency Pairs on 2023.06.27

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0902
• Prev. Close: 1.0904
• % chg. over the last day: +0.01%

According to the Ifo, Germany’s business climate index fell to 88.5 in June from 91.5 in May. The report points out that weaker-than-expected economic performance in China after it resumed after a tough COVID-19 shutdown, an impending recession in the US and continued monetary tightening are weighing on German company sentiment. The German economy faces the prospect of a long recession as domestic demand and exporter expectations weaken.

Trading recommendations

• Support levels: 1.0845,1.0785,1.0719,1.0688,1.0659,1.0634
• Resistance levels: 1.0932,1.0995,1.1185

The trend on the EUR/USD currency pair on the hourly time frame is bullish, but there are all preconditions for the reversal. The MACD indicator has become negative, and the trend structure on the low time frames is descending. Under such market conditions, buy trades are possible from the support level of 1.0845 or 1.0785, but only with an additional confirmation on the lower time frames, as the levels have already been tested. Sell deals can be considered from the resistance level of 1.0932 but with confirmation in the form of a reverse initiative.

Alternative scenario:

if the price breaks through the support level of 1.0845 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2705
• Prev. Close: 1.2710
• % chg. over the last day: +0.04%

The latest analyst poll suggests that the Bank of England will raise the bank rate to 5.50% at the next two meetings. Meanwhile, the final rate is projected to be in the 5.75%-6.0% range. Yesterday, British Finance Minister Jeremy Hunt said that banks have been too slow to pass on central bank interest rate hikes to depositors, a problem that needs to be addressed. Banks have moved quickly to higher interest rates for their mortgage customers but have been much slower to move to higher yields for depositors. This leads to imbalances and sustained inflationary pressures.

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 forms a wide-volatile corridor with slight signs of bearish pressure. The MACD indicator has become inactive. The most optimal level to buy is the level of 1.2677 but with confirmation. Sell deals are best considered from the resistance level of 1.2801 but also with confirmation since the level has already been tested.

Alternative scenario:

if the price breaks through the support level 1.2627 and fixes below it, the downtrend will most likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 143.56
• Prev. Close: 143.50
• % chg. over the last day: -0.04%

One of BOJ’s policymakers called for an urgent review of yield curve controls. He also added that a review of YCC controls should be discussed now, taking into account the need to prevent sharp interest rate swings in the future phase of the exit from the current monetary policy. The announcement came just after Japan’s top currency diplomat stepped up his warning against the yen’s decline, signaling to markets that the authorities may be conducting another currency intervention to support the currency.

Trading recommendations

• Support levels: 143.27,142.37,141.60,141.23,140.16,139.85,139.23,138.81
• Resistance levels: 145.16

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is forming a flat with signs of bullish pressure. The MACD indicator is in the positive zone, but there are signs of divergence. The most suitable level to buy would be 143.27 but with confirmation on the lower time frames. Sell trades can be considered from the resistance level of 145.16 but with confirmation in the form of a bearish initiative.

Alternative scenario:

if the price fixes below the 141.60 support level, with a high probability the downtrend will resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3176
• Prev. Close: 1.3154
• % chg. over the last day: -0.17%

Inflation data will be released today in Canada. Analysts are predicting that inflationary pressures will continue to decline. The core CPI is expected to fall from 4.4% to 3.4%, while the core indicator (which excludes food and energy prices) will fall from 4.1% to 3.9%. This situation will increase the likelihood that the Bank of Canada will end its current tightening cycle as the current interest rate of 4.75% is already above the current rate of inflation, and it’s a restrictive territory.

Trading recommendations

• Support levels: 1.3098
• Resistance levels: 1.3145,1.3246,1.3317,1.3357,1.3384,1.3461,1.3503

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, and sellers’ pressure is still present. It is better to buy from the level of 1.3098 but with confirmation on the lower time frames in the form of buyers’ reaction to the level and change of the structure on the lower time frames. Sell trades are better to look for from the resistance level of 1.3145 but with confirmation in the form of a reverse initiative.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 1.3246, the uptrend will resume with a high probability.