The Analytical Overview of the Main Currency Pairs on 2021.07.23

The EUR/USD currency pair

• Prev Open: 1.1791
• Prev Close: 1.1771
• % chg. over the last day: -0.17%

The ECB is more tolerant of rising inflation. Also, the ECB assumes that there will be a “transitory period” of inflation when it may be moderately above the target level. But the seriousness and duration of this deviation is not specified. Many economists said that this policy has no teeth.

• Support levels: 1.1761, 1.1746, 1.1609
• Resistance levels: 1.1822, 1.1834, 1.1879, 1.1934, 1.1969

From the technical point of view, the trend is still bearish. There was a widening of the price range with the release of the ECB news, and the price decreased by 0.17% compared to yesterday. Investors evaluate the further policy of the ECB negatively, which will put pressure on the EUR/USD quotes. Under such market conditions, traders should look for sell positions from the resistance levels. It is better to put buy positions aside for a while or consider intraday trading with very short targets.

Alternative scenario: if the price breaks through the 1.1879 resistance level and fixes above, the general uptrend is likely to be resumed.

• – France Manufacturing PMI (m/m) at 10:15 (GMT+3);
• – Germany Manufacturing PMI (m/m) at 10:30 (GMT+3);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
• – Eurozone Service PMI (m/m) at 11:00 (GMT+3);
• – US Manufacturing PMI (m/m) at 16:45 (GMT+3);
• – US Service PMI (m/m) at 16:45 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.3707
• Prev Close: 1.3767
• % chg. over the last day: +0.44%

The British pound gained more confidence than the euro. Because of the Brexit deal, relations between Britain and the EU are becoming more complicated from the economic and trading perspectives. This is especially true for Ireland, where many families from Britain live and which remains in the European Union.

• Support levels: 1.3745, 1.3676 ,1.3641, 1.3614, 1.3525
• Resistance levels: 1.3805, 1.3899, 1.3923, 1.4002, 1.4075, 1.4101

The trend on the GBP/USD currency pair is downward on the H1 timeframe. But the buyers have been showing initiative for the second day in a row and do not allow the price to roll back. The MACD indicator is in the positive zone, but with signs of weakness. Under such market conditions, traders are better to look for both sell deals from the resistance levels within the trend and buy deals from the support levels, but only on the intraday timeframes and with short targets.

Alternative scenario: if the price breaks through the 1.3839 resistance level and consolidates above, the bearish scenario is likely to be canceled.

• – UK Retail Sales (m/m) at 09:30 (GMT+3);
• – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
• – UK Service PMI (m/m) at 11:30 (GMT+3);
• – UK Composite PMI (m/m) at 11:30 (GMT+3).

The USD/JPY currency pair

• Prev Open: 110.26
• Prev Close: 110.15
• % chg. over the last day: -0.10%

The situation with the USD/JPYcurrency pair didn’t change much. The price is accumulating near the priority change level now, which is one of the signs of the emerging breakthrough. It’s also a bank holiday in Japan today (Sports Day), so the movement will depend on the dollar index.

• Support levels: 109.70, 109.19, 108.65
• Resistance levels: 110.41, 110.73, 111.06, 111.48, 110.73, 112.18

From the point of view of technical analysis, the situation has not changed. There is a downward trend on the H1 timeframe, as the price is still trading below the priority change level. But the price managed to rise above the moving average, which indicates some buying pressure. The MACD indicator became inactive. Under such market conditions, traders can look for sell trades from the resistance levels. Buy positions should be considered from the support levels after a pullback below or after a breakthrough of 110.41 level.

Alternative scenario: if the price rises above 110.41, the uptrend is likely to be resumed.

The USD/CAD currency pair

• Prev Open: 1.2564
• Prev Close: 1.2560
• % chg. over the last day: -0.03%

The situation with the USD/CAD currency pair has not changed. The Canadian dollar is a commodity currency and is highly dependent on oil price movements. Oil price reached the resistance level yesterday, while the USD/CAD currency pair dropped to the support level, which is also the priority change level.

• Support levels: 1.2561, 1.2519, 1.2448, 1.2404, 1.2347, 1.2312
• Resistance levels: 1.2649, 1.2787, 1,2951

Technically, the trend remains bullish. But the price is trading right at the priority change level. This behavior often occurs before a breakthrough. But it is better for traders to play it safe and take action only after the price moves to one side of the narrow price range.

Alternative scenario: if the price breaks through the 1.2561 support level and fixes below, the downtrend is likely to be resumed.

• – Canada Retail Sales (m/m) at 15:30 (GMT+3).