The Analytical Overview of the Main Currency Pairs on 2023.06.29

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0956
• Prev. Close: 1.0912
• % chg. over the last day: -0.40%

The EUR/USD pair declined yesterday amid hawkish statements from US Federal Reserve (Fed) Chairman Jerome Powell, who participated in a discussion with European Central Bank (ECB) President Christine Lagarde. Although both politicians made hawkish remarks, the dollar eventually prevailed. Both politicians hinted at further interest rate increases at the next meetings.

Trading recommendations

• Support levels: 1.0845,1.0785,1.0719,1.0688,1.0659,1.0634
• Resistance levels: 1.0968,1.0995,1.1185

The trend on the EUR/USD currency pair on the hourly time frame is bullish but close to change. The price is trading below the moving averages. The MACD indicator is negative again, while the sellers’ pressure is increasing. Under such market conditions, buy trades can be made from the support level of 1.0845 or 1.0784, but with additional confirmation on the lower time frames. Sell deals can be considered from the resistance level of 1.0968, but with confirmation in the form of a reverse initiative since the level has already been tested.

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: 1.2747
• Prev. Close: 1.27471.2634
• % chg. over the last day: -0.89%

Bank of England Governor Andrew Bailey said yesterday that UK interest rates would likely remain “higher for a long time” due to persistent inflationary pressures. Inflation remains at 8.7% y/y in the UK, and core inflation (excluding food and energy prices) at 7.1% y/y, which Bailey said is a particular problem for the UK economy. Bailey’s comments put pressure on the British pound, increasing the risks of a recession due to excessive policy tightening. Money markets are predicting a final rate of 6.0%. Also, markets are expecting no rate cuts this year and for most of 2024 through September.

Trading recommendations

• Support levels: 1.2627,1.2539,1.2486,1.2421,1.2391,1.2349
• Resistance levels: 1.2678,1.2801,1.2991

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price is correcting, and sales prevail during the day. There is a high probability of a trend change. The MACD indicator has become negative, with no signs of divergence. The most optimal level to buy is 1.2627 or 1.2540 but with confirmation. It is best to consider sell deals from the resistance level of 1.2678 but also with confirmation because 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: 144.05
• Prev. Close: 144.48
• % chg. over the last day: +0.30%

In his speech yesterday, Bank of Japan Governor Ueda said that core inflation is below target and hinted that monetary policy might be revised only if inflation continues to rise. With the BoJ keeping its monetary policy soft and keeping rates in negative territory, the Japanese yen has continued to depreciate and is now as close as possible to the levels that last prompted the BoJ to intervene. If Friday’s Tokyo inflation data shows no sign of picking up, there is a high chance of government intervention to avoid further depreciation of the currency.

Trading recommendations

• Support levels: 143.66,143.27,142.37,141.60,141.23,140.16,139.85,
• 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 slowly but surely going up. The MACD indicator is in the positive zone, but the divergence becomes stronger. The most suitable level to buy is 143.66 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 143.27 support level, with a high probability the downtrend will resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3191
• Prev. Close: 1.3257
• % chg. over the last day: +0.50%

Despite rising oil prices, the Canadian dollar declined against the US dollar yesterday as hawkish comments from US Federal Reserve Chairman Jerome Powell increased the probability of a rate hike in July to 82% from 74% a day earlier. Crude oil inventories fell by -9.6 million barrels last week (forecast -1.4 million), a sign of strong demand. But investors remain concerned that higher interest rates could slow economic growth and reduce oil demand. Some analysts expect the oil market to tighten in the second half of the year, citing continued OPEC+ supply cuts.

Trading recommendations

• Support levels: 1.3176,1.3145,1.3116
• Resistance levels: 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 has changed to a bullish one. The price is trading above the moving averages. The MACD indicator became positive, and the buyer’s pressure remains. It is better to buy from the 1.3176 level but with confirmation on the lower time frames in the form of buyers’ reactions to the level. Sell deals are better to look for from the resistance level of 1.3293 but with confirmation in the form of a reverse initiative.

Alternative scenario:

if the price breaks through and consolidates below the support level of 1.3116, the downtrend will resume with a high probability.