The Analytical Overview of the Main Currency Pairs on 2023.06.30

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0911
• Prev. Close: 1.0863
• % chg. over the last day: -0.44%

Inflationary pressures are increasing again in Germany. The consumer price level in the country rose from 6.1% to 6.4% year-on-year. Core inflation was the main driver – excluding energy and food, increased by 0.3% m/m and returned to 5.8% y/y. Eurozone’s inflation data will be released today. Overall inflation is expected to fall from 6.1% to 5.6% y/y, but core inflation is expected to rise from 5.3% to 5.5% y/y. With the ECB focusing most of its attention on core inflation, this will increase the likelihood of further rate hikes.

Trading recommendations

• Support levels: 1.0845,1.0785,1.0719,1.0688,1.0659,1.0634
• Resistance levels: 1.0919,1.0968,1.0995,1.1185

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 1.0919 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: 1.2634
• Prev. Close: 1.27471.2611
• % chg. over the last day: -0.18%

Bank of England spokeswoman Silvana Tenreyro made a statement yesterday that stands in stark contrast to Bank of England Governor Andrew Bailey’s statement the day before. According to Tenreyro, the Bank of England does not need to raise interest rates further to curb inflation and will be forced to turn around if it tightens policy further. Tenreyro has opposed interest rate hikes since December and voted against a Bank of England rate hike last week.

Trading recommendations

• Support levels: 1.2583,1.2539,1.2486,1.2421,1.2391,1.2349
• Resistance levels: 1.2646,1.2684,1.2801,1.2991

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. But the price is correcting, and sales prevail during the day. There is a high probability of trend change. The MACD indicator has become negative but with signs of divergence. The most optimal level to buy is 1.2683 or 1.2539 but with confirmation. Sell deals are best considered from the resistance level of 1.2646 or 1.2684, but also with confirmation on the lower time frames in the form of the sellers’ initiative.

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: 144.46
• Prev. Close: 144.77
• % chg. over the last day: +0.21%

Deputy Governor of the Bank of Japan (BOJ) Ryozo Himino said yesterday that recent price growth was stronger than previously forecast, and inflation expectations are rising, a sign that the economy is getting closer to reaching the bank’s 2% inflation target. Stressing the need to maintain an ultra-soft monetary policy for now, Himino said that the economy is beginning to see a combination of cost-led inflation and domestic demand-driven price growth. This suggests that the Bank of Japan is slowly preparing for a policy shift toward normalization.

Trading recommendations

• Support levels: 144.42,143.66,143.27,142.37,141.60,141.23,140.16,139.85,
• 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 steadily rising and has approached the daily resistance level. The MACD indicator is in the positive zone, but the divergence becomes stronger. The most appropriate level to buy is 144.42 or 143.66 in case of a deeper correction. 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: 1.3255
• Prev. Close: 1.3250
• % chg. over the last day: -0.04%

The Canadian Central Bank is concerned that the Canadian economy is doing too well for inflation to return to the 2% target, and if it is slow to act, inflation expectations could rise, making things worse. A hard landing of the economy, or recession, could lead to higher unemployment, something the Bank of Canada hopes to avoid. It could also lead to a reversal of rate hikes, possibly as early as next year. Canada will release last month’s GDP data today, as well as the Business Outlook Survey with further projections.

Trading recommendations

• Support levels: 1.3176,1.3145,1.3116
• Resistance levels: 1.3261,1.3293,1.3317,1.3357,1.3384,1.3461,1.3503

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 at the level of moving averages. The MACD indicator has become inactive, and the buyers’ pressure remains, but a slight correction is possible. It is better to buy from the 1.3176 support level but with confirmation on the lower time frames in the form of buyers’ reactions to the level. It is better to look for sell deals from the resistance level of 1.3261 but with confirmation in the form of a false breakout since the level has already been tested.

Alternative scenario:

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