The Analytical Overview of the Main Currency Pairs on 2023.08.02

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0994
• Prev. Close: 1.0983
• % chg. over the last day: -0.10

The US service sector continues to perform relatively well, while the US labor market is slowly starting to cool down. Job openings fell more than expected in June to 9.58 million from 9.61 million in May. Signs of weakening labor demand are likely to reinforce expectations that rate hikes by the US Federal Reserve are unlikely to be renewed in September. According to the CME FedWatch Tool, the probability of a rate hike remaining is 82% at the September meeting and 67% at the November meeting. This is a negative factor for the dollar index, so the euro has a prospect of strengthening in the coming weeks.

Trading recommendations

• Support levels: 1.0967,1.0925,1.0866
• Resistance levels: 1.1072,1.1102,1.1147,1.1198,1.1240,1.1272,1.1334

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The price is still trading at the daily support level, from which the buyers are showing initiative. The MACD indicator has become inactive, but the selling pressure is weak. Under such market conditions, buy trades can be considered from the support level of 1.0967 but with confirmation on the lower time frames. Sell deals trades can be considered from the resistance level of 1.1072 or 1.1102 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: 1.2832
• Prev. Close: 1.27471.2775
• % chg. over the last day: -0.44%

The UK Manufacturing PMI rose from 45 to 45.3. Despite the small gain, the index is near a seven-month low. A more detailed report indicated increasing signs of weakness in the manufacturing sector. But manufacturers expect output to rise over the coming year. Confidence is linked to expected improvement in market conditions, new product launches, planned investment spending, and marketing strategies.

Trading recommendations

• Support levels: 1.2741,1.2646
• Resistance levels: 1.2804,1.2870,1.2913,1.2962,1.3011,1.3072,1.3140,1.3308

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price has reached the daily support level. The MACD indicator is in the negative zone, but the signs of divergence are observed on several time frames. The most optimal level for buying is 1.2741 but with confirmation on the lower time frames. Sell trades are best considered from the resistance level of 1.2879 but with confirmation in the form of sellers’ initiative.

Alternative scenario:

if the price breaks through the resistance level of 1.2962 and fixes above it, the uptrend will most likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 142.26
• Prev. Close: 143.32
• % chg. over the last day: +0.74%

On Tuesday, USD/JPY rose to its highest level in almost four weeks. The Bank of Japan’s recent decision to adjust its yield curve adjustment program proved to be a short-term source of strength for the yen, as markets concluded that the central bank would not significantly change its ultra-soft policy in the near term. As the US dollar regained temporary confidence, the USD/JPY pair has the potential to continue its upward trajectory.

Trading recommendations

• Support levels: 141.58,140.98,139.56,138.07,137.78,137.25,136.56
• Resistance levels: 142.68,142.99

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading above the moving averages but has reached the daily resistance level. The MACD indicator is in the positive zone with signs of overbought, as well as with signs of divergence. There is a high probability of corrective downward movement. The most suitable level for buying will be 141.58 or 140.98 but with confirmation in the form of buyers’ initiative on the lower time frames. Sell trades can be considered from the resistance level of 143.43 but with confirmation on the lower time frames.

Alternative scenario:

if the price fixes below the 138.86 support level, with a high probability that the downtrend will resume.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3185
• Prev. Close: 1.3281
• % chg. over the last day: +0.73%

Since mid-July, the Canadian dollar has been steadily declining against the US dollar, despite the fact that crude oil prices are rising. Money market pricing indicates that the Bank of Canada has no plans for additional rate hikes, but there is a chance of a possible rate hike if economic data deems it necessary. As inflationary pressures are easing globally, Canadian inflation will follow a similar trend, which means that the Bank of Canada is at the peak of its rate hike cycle.

Trading recommendations

• Support levels: 1.3224,1.3199,1.3150,1.3131
• Resistance levels: 1.3329,1.3383,1.3426

From the point of view of technical analysis, the trend on the USD/CAD currency pair has changed to a bullish one. The price managed to consolidate above the priority change level. Now the price is trading above the moving averages. The MACD indicator is showing buying pressure with no signs of reversal. It is better to buy from the support level of 1.3224 or 1.3199. Sell trades are best sought from the resistance level of 1.3329, subject to a reversal and change of structure on the lower time frames.

Alternative scenario:

if the price breaks through and consolidates below the support level of 1.3150, the downtrend will resume with a high probability.