The Analytical Overview of the Main Currency Pairs on 2021.02.22

The EUR/USD currency pair

• Prev Open: 1.2089
• Prev Close: 1.2117
• % chg. over the last day: +0.23%.

Positive manufacturing PMI data supported the bulls on Friday. Despite the contraction in the services sector, bullish sentiment prevails as the composite index is also accelerating. In this light, the continuation of the northern trend can be expected.

• Support levels: 1.2081, 1.2023
• Resistance levels: 1.2155, 1.2169

The main scenario for trading the EUR/USD is buying. The 1.2169 level is important as the daily moving average is located there. If the price goes above it, it will indicate the resumption of growth in the long term. On the hourly timeframe, everything seems to be in favor of the bulls. The ADX showed a significant reaction on Friday’s upward momentum, and the price is fixed above the moving averages.

Alternative scenario: if the price manages to consolidate below the level of 1.2081, the pair may return to the decline to 1.2023.

• – German IFO Business Climate Index (Feb) at 10:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3971
• Prev Close: 1.4005
• % chg. over the last day: +0.24%

The sterling continued to break records on Friday. A combination of a significant difference in cash liquidity in favor of the dollar and a positive fundamental background worked in favor of the pound. Growth expectations for the UK economy rose after IHS Markit data. As a result, the GBP/USD has reached three-year highs.

• Support levels: 1.3819, 1.3775
• Resistance levels: 1.4050, 1.4100

The main scenario for trading the GBP/USD is cautious buying. Despite strong growth, it is time for bulls to be vigilant. Technical indicators are starting to signal an impending correction. On the daily timeframe, the ADX hits the overvalued area. The H4 shows a drop in bullish pressure. On the H1, the MACD is showing divergence. Growth can be limited by the round level of 1.4100.

Alternative scenario: if the pair consolidates below 1.3932, it may return to 1.3819.

The USD/JPY currency pair

• Prev Open: 105.66
• Prev Close: 105.43
• % chg. over the last day: -0.22%

The dollar-yen continues its gradual decline following risky assets. The stock market is experiencing a decline in demand for shares, which leads to an appreciation of the yen. But at the same time, investors are not leaving for defensive assets. Gold is not showing an upward trend and bonds continue to lose value. In this light, the pair’s southern movement may be limited.

• Support levels: 105.10, 104.40
• Resistance levels: 106.12, 106.55

The main scenario is trading in a range between 105.80 and 105.10. It is neither fundamentally nor technically possible to indicate a priority in a direction. After a short-term decline, the price sharply returned to the moving averages. The rest of the indicators are near their minimum values.

An alternative scenario implies the price-fixing above 105.80. In this case, the pair may resume growth to 106.12 – 106.55. A breakthrough of 105.10 could trigger a further decline towards 104.40.

The USD/CAD currency pair

• Prev Open: 1.2673
• Prev Close: 1.2613
• % chg. over the last day: -0.47%

The pair continued to decline, following the dollar index. Oil prices are subject to a southern correction, which balances the strength of bulls and bears in the short term. But the medium-term direction remains south.

• Support levels: 1.2590, 1.2550
• Resistance levels: 1.2665, 1.2745

The main scenario is selling up to 1.2550. The ADX and the MACD have shown a significant reaction to the price decline, which indicates an increase in the strength of the bears. But given the correction in the commodity market and the negative fundamentals in Canada, the further decline may be limited.

Alternative scenario: if the price gains a foothold above 1.2665, the pair may rise to 1.2745.