The Analytical Overview of the Main Currency Pairs on 2023.07.24

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1127
• Prev. Close: 1.1124
• % chg. over the last day: -0.03%

Until Wednesday, the volatility in the financial markets will be lower in anticipation of the US Fed meeting. The ECB meeting will also take place on Thursday. The scenario of a 0.25% rate hike in both cases is already factored into prices, so traders and investors will focus on the future plans of the US Fed and ECB. The hawkish bias of both banks will maintain parity in interest rates, which will not lead to significant price changes. But if the US Fed hints at the end of the tightening cycle, there are growth prospects for the euro.

Trading recommendations

• Support levels: 1.1070,1.1001,1.0958,1.0925,1.0866
• Resistance levels: 1.1198,1.1240,1.1272,1.1334

The trend on the EUR/USD currency pair on the hourly time frame has changed to bearish. There is still weak selling pressure in the market. The MACD indicator became negative, but there are the first signs of divergence. Volatility is low. Under such market conditions, buy trades can be considered from the support level of 1.1071 but with confirmation and short targets. Sell trades can be considered from the resistance level of 1.1198 but with confirmation in the form of sellers’ initiative.

Alternative scenario:

if the price breaks through the resistance level of 1.1240 and fixes above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2864
• Prev. Close: 1.27471.2848
• % chg. over the last day: -0.12%

UK inflation fell more than expected in June, dampening expectations that the Bank of England will raise interest rates by more than 6% this year. This led to a sharp decline in yields on UK securities, which put pressure on sterling against a range of currencies. The Bank of England is now expected to raise rates by 25 basis points at its next meeting and another 50 basis points by the end of the year, leaving the final rate at 5.75%.

Trading recommendations

• Support levels: 1.2848,1.2802,1.2762,1.2646
• Resistance levels: 1.2905,1.2964,1.3011,1.3072,1.3140,1.3308

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is already bearish. The price is trading below the levels of moving averages. The MACD indicator is in the negative zone, but there are signs of divergence. The most optimal level for buying is 1.2802 but with confirmation on the lower time frames. Sell trades are best considered after a false breakout of 1.2964.

Alternative scenario:

if the price breaks through the resistance level 1.3122 and fixes above it, the uptrend will most likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 140.07
• Prev. Close: 141.76
• % chg. over the last day: +1.20%

On Friday, the media got information from sources close to the Bank of Japan that the Japanese Central Bank will maintain all monetary policy settings this week, including yield curve controls. This led to a sharp sell-off in the yen at the end of the trading day. According to preliminary information, many policymakers do not see the need to take new steps on this issue as there is no consensus. But the BoJ is expected to revise its inflation forecasts upward.

Trading recommendations

• Support levels: 140.30,139.60,138.49,137.93,137.25,136.56
• Resistance levels: 142.61,142.99

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is moving steadily upward along the moving averages, but the buyers’ pressure remains. The MACD indicator shows no signs of reversal, and traders should expect at least one upward wave. The most suitable level for buying is 140.30 but with confirmation in the form of buyers’ initiative on the lower time frames. Sell trades can be considered from the 142.61 resistance level but with confirmation in the form of a false breakout.

Alternative scenario:

if the price fixes above the 139.09 resistance level, with a high probability, the uptrend will resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3172
• Prev. Close: 1.3223
• % chg. over the last day: +0.38%

Banks are betting on the Canadian Dollar strengthening against the US Dollar to 1.3 by the end of this year. The CAD has benefited from narrowing short-term interest rate differentials against the USD in recent months but is struggling to make additional progress as both central banks near the end of their tightening cycles. But thanks to rising oil prices, the CAD has an additional advantage against the dollar.

Trading recommendations

• Support levels: 1.3158,1.3108
• Resistance levels: 1.3243,1.3329,1.3383,1.3426

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bearish but close to the shift. The price is approaching the priority change level, and the buyers’ pressure is increasing. The MACD indicator has become positive. Buying is best sought from the support level of 1.3196 but with confirmation in the form of initiative. Sell trades are best considered from the resistance level of 1.3243 but better with confirmation in the form of a false breakdown.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 1.3243, the uptrend will resume with a high probability.