The Analytical Overview of the Main Currency Pairs on 2023.07.04

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0906
• Prev. Close: 1.0912
• % chg. over the last day: +0.05%

The US industrial production fell in June to levels last seen when the economy was still recovering from the first wave of the COVID-19 pandemic. The Manufacturing Business Activity Index fell from 46.9 to 46.0, the lowest reading since May 2020. For the eighth month in a row, the PMI is below the 50 level, indicating a contraction in manufacturing. But the odds of a US Federal Reserve rate hike at the July meeting have not changed much at 88%.

Trading recommendations

• Support levels: 1.0858,1.0785,1.0719,1.0688,1.0659,1.0634
• Resistance levels: 1.0922,1.0976,1.0995,1.1185

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price failed to close below the priority change level of 1.0845. The price is now trading at the level of the moving averages. The MACD indicator has become inactive. Under such market conditions, buy trades can be considered from the support level of 1.0858 but with additional confirmation on the lower time frames. Sell deals can be considered from the resistance level of 1.0922 or 1.0976, but with confirmation in the form of a false breakout since the levels have 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: 1.2686
• Prev. Close: 1.27471.2689
• % chg. over the last day: +0.02%

The UK Manufacturing Business Activity Index rose from 46.2 to 46.5. But a more detailed report showed that production, new orders, and employment levels continued to decline. Although 53% of manufacturers still expect growth over the next 12 months, the overall degree of optimism has fallen to a six-month low. Concerns about growing market uncertainty temper optimism, the impact of the cost-of-living crisis, and fears that customers may move to cheaper competing markets. For the economy and the national currency, these are factors of weakness.

Trading recommendations

• Support levels: 1.2646,1.2583,1.2539,1.2486,1.2421,1.2391,1.2349
• Resistance levels: 1.2727,1.2757,1.2836

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 on the moving average lines, forming a flat structure. The MACD indicator has become inactive. The best level to buy is 1.2646 or 1.2583 but with confirmation. It is best to consider sell deals from the resistance level of 1.2727 or 1.2757, but also with confirmation on the lower time frames in the form of a false breakout, as the level has already been tested.

Alternative scenario:

if the price breaks through the support level 1.2583 and fixes below it, the downtrend will most likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 144.27
• Prev. Close: 144.65
• % chg. over the last day: +0.26%

On Monday, the dollar changed slightly against a basket of major trading currencies but rose against the yen. The currency pair is now under scrutiny due to a possible intervention. Last week the Minister of Finance of Japan warned that the government wouldn’t allow the yen to depreciate too much. The last time the decision to interfere was when the Japanese yen dropped below 145 against the dollar.

Trading recommendations

• Support levels: 143.66,143.27,142.37,141.60,141.23,140.16,139.85,
• Resistance levels: 144.73,145.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is forming a flat structure right before the important resistance level of 145. The MACD indicator has become inactive. The most suitable level to buy would be 143.66 or 143.27 in a deeper correction. Sell trades can be considered from the resistance level of 144.73 but with confirmation in the form of a reverse 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: 1.3239
• Prev. Close: 1.3249
• % chg. over the last day: +0.07%

Yesterday Canada had a bank holiday. And today, the USA is celebrating Independence Day. Therefore, the main factor that will bring the dynamics in the USD/CAD pricing is oil. The Canadian dollar is the commodity currency and is directly correlated with oil quotes. This week there will be a meeting of OPEC+ countries, where new surprises on further reduction of production are possible. This primarily concerns Saudi Arabia, which wants to extend additional production cuts for a few more months. Typically, production cuts are taken to support oil prices.

Trading recommendations

• Support levels: 1.3184,1.3145,1.3116
• Resistance levels: 1.3267,1.3293,1.3317,1.3357,1.3384,1.3461,1.3503

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is trading at the level of the moving averages and forming a flat structure. The MACD indicator has become inactive. There are signs of bearish pressure inside the day, so a correction is possible. Buy deals are best sought from the level of 1.3184 but with confirmation on the lower time frames in the form of buyers’ reactions to the level. Sell trades are best sought on intraday time frames but with confirmation in the form of sellers’ 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.