The Analytical Overview of the Main Currency Pairs on 2023.07.26

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1063
• Prev. Close: 1.1054
• % chg. over the last day: -0.08%

Today the US Federal Reserve will hold a meeting on monetary policy, where the future course of the US Central Bank will be determined. Investors are now mixed on the long-term outlook for the Central Bank’s monetary policy. According to forecasts, the US Fed is expected to raise the rate by 0.25%. But this increase has already been factored into prices, so the focus will be on the FOMC statement, as well as Jerome Powell’s comments at the press conference. The hawkish stance of the US Fed will increase the probability of another rate hike this fall, which will be a strengthening factor for the dollar.

Trading recommendations

• Support levels: 1.1025,1.1001,1.0958,1.0925,1.0866
• Resistance levels: 1.1186,1.1147,1.1198,1.1240,1.1272,1.1334

The trend on the EUR/USD currency pair on the hourly time frame is bearish. There is still weak selling pressure in the market. The MACD indicator is in the negative zone, but there are signs of divergence. An upward correction is possible under these market conditions. Buy trades can be considered from the support level of 1.1025 or 1.1001 but with confirmation in the form of a false breakdown. Sell deals can be considered from the resistance level of 1.1086 or 1.1147 but with confirmation in the form of sellers’ initiative.

Alternative scenario:

if the price breaks through the resistance level of 1.1147 and fixes above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2816
• Prev. Close: 1.27471.2901
• % chg. over the last day: +0.66%

According to economists, the Bank of England will raise the interest rate by 0.25% to 5.25% at its meeting on August 3. At the same time, it is predicted that the Bank of England will maintain its hawkish stance and conduct at least two more 0.25% rate hikes, bringing the rate to a peak of 5.75% before the end of the year. The probability of such a scenario is more than 70%, and if it is realized, the British pound will gain an advantage over the US dollar and the euro due to the change in the interest rate differential.

Trading recommendations

• Support levels: 1.2862,1.2802,1.2762,1.2646
• 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 bearish. But the price is trading above the levels of moving averages, and the initiative of buyers is present. The MACD indicator has become positive, and momentum is ascending. The most optimal level for buying is 1.2862 but with confirmation on the lower time frames. Sell trades are best considered after a false breakout of the 1.2905 resistance level.

Alternative scenario:

if the price breaks through the resistance level 1.2963 and fixes above it, the uptrend will most likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 141.41
• Prev. Close: 140.90
• % chg. over the last day: -0.36%

The closer to Friday’s monetary policy meeting of the Bank of Japan, the more predictions and opinions there are. But overall, the general tone has not changed. Analysts still believe that despite a solid recovery in economic growth and above-target inflation, the BOJ will maintain all monetary policy settings and hint at maintaining this stance in the longer term. The Bank of Japan is not confident enough and is even concerned that premature policy changes may mean a return to disinflation.

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 has been trading flat for the last two days, forming a balance accumulation of liquidity. The MACD indicator shows no signs of reversal, and traders should expect at least one upward wave. The most suitable level for buying will be 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: 1.3165
• Prev. Close: 1.3171
• % chg. over the last day: +0.04%

Yesterday, oil prices hit a 3-month-high due to supply cuts. In China, the world’s second-largest oil consumer, politicians pledged to increase support for the economy. Stimulating the economy tends to increase demand for oil, which pushes black gold prices higher when supply is tight. The Canadian dollar, being a commodity currency, strengthens due to these factors.

Trading recommendations

• Support levels: 1.3153,1.3131,1.3108
• 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. Now the price is forming a wide-volatile price corridor. Such balance accumulation will demonstrate an impulse shot sooner or later. The MACD indicator has become inactive, and there is weak buying pressure intraday. Buying is best sought from the support level of 1.3153 but with confirmation on the lower time frames. Sell trades are best sought from the resistance level of 1.3243 but better with confirmation in the form of a false breakout.

Alternative scenario:

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