The Analytical Overview of the Main Currency Pairs on 2023.07.06

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0878
• Prev. Close: 1.0853
• % chg. over the last day: -0.23%

The FOMC minutes were relatively quiet. There were no surprises. At the June meeting, all Fed officials voted to maintain the restrictive monetary policy and expect further rate hikes, but at a slower pace. In fact, all this was voiced by the head of the US Federal Reserve, Jerome Powell, at the press conference after the last meeting. But this was enough for the dollar index to strengthen against the major basket of currencies.

Trading recommendations

• Support levels: 1.0834,1.0795,1.0719,1.0688,1.0659,1.0634
• Resistance levels: 1.0858,1.0881,1.0933,1.0976,1.0995,1.1185

The trend on the EUR/USD currency pair on the hourly time frame is bullish but is close to changing. The price has fallen back to the priority change level, and there has been no reaction from the buyers. The MACD indicator has become negative. Inside the day, the bias is bearish. Under such market conditions, buy trades can be considered from the support level of 1.0834 but with additional confirmation in the form of a false breakdown. Sell deals may be considered from the resistance level of 1.0858 or 1.0881 but with confirmation in the form of a bearish initiative.

Alternative scenario:

if the price breaks through the support level of 1.0834 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2710
• Prev. Close: 1.27471.2703
• % chg. over the last day: -0.05%

The service sector PMI was 53.7 in June, down from 55.2 in May, signaling a slowdown in manufacturing growth to its lowest level since March. The latest reading in the index marked five months of uninterrupted growth in business activity in the services sector. Survey respondents generally reported solid business and consumer spending despite pressure on budgets from elevated inflationary pressures. The report noted weak customer demand in the real estate and construction sectors, largely due to rising interest rates.

Trading recommendations

• Support levels: 1.2647,1.2583,1.2539,1.2486,1.2421,1.2391,1.2349
• Resistance levels: 1.2756,1.2836

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The British pound looks more confident than the euro. The price is trading on the lines of the moving averages, forming a flat structure. The MACD indicator is still inactive. The best level to buy is the level of 1.2647 but with confirmation. Buy deals can also be sought on intraday time frames. Sell trades are best considered from the resistance level of 1.2756 but also with confirmation on the lower time frames in the form of a false breakout.

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: 144.43
• Prev. Close: 144.64
• % chg. over the last day: +0.14%

The Japanese yen strengthened on Thursday, proving slightly more resilient amid ongoing speculation over government intervention in the currency markets. Concerns over rising US interest rates, combined with a dovish outlook for the Bank of Japan in recent weeks, weakened the yen, bringing it closer to levels that triggered intervention in late 2022.

Trading recommendations

• Support levels: 143.66,143.27,142.37,141.60,141.23,140.16,139.85,
• Resistance levels: 144.50,144.72,145.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading below the moving averages. The MACD indicator has become negative, and the sellers’ pressure has increased. The most appropriate level to buy would be 143.66 or 143.27, in a deeper correction. Sell trades can be considered from the resistance level of 144.50 but with confirmation on the lower time frames.

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: 1.3218
• Prev. Close: 1.3282
• % chg. over the last day: +0.48%

Tomorrow the labor market report will be published in Canada. The number of jobs in Canada is usually overshadowed by the NFP data for the US, which comes out at the same time. But given the context of what’s been going on in Canada lately, the jobs data could overturn BOC expectations. A strong labor market is typically a green flag for the central bank to tighten monetary policy further. Conversely, weak labor market data is the first factor in the negative impact of high-interest rates.

Trading recommendations

• Support levels: 1.3243,1.3184,1.3145,1.3116
• Resistance levels: 1.3260,1.3293,1.3317,1.3357,1.3384,1.3461,1.3503

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price has resumed growth and is trading above the moving averages. The MACD indicator is in the positive zone, and the buyers’ pressure remains. It is best to look for buy deals from the 1.3243 level 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 from the level of 1.3317 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.