The Analytical Overview of the Main Currency Pairs on 2021.08.19

The EUR/USD currency pair

• Prev Open: 1.1709
• Prev Close: 1.1709
• % chg. over the last day: 0.00%

The EU consumer price index showed that the inflation rate in Europe increased from 1.9% to 2.2%, which is above the ECB target level of 2%. It is not clear now how the ECB will react to this, especially considering the fact that the ECB’s balance sheet is already over 8 trillion euros and now equals 78.1% of Eurozone GDP versus the Fed’s 36.3% and the Bank of England’s 38.5%.

• Support levels: 1.1609
• Resistance levels: 1.1706, 1.1754, 1.1799, 1.1817, 1.1854, 1.1894, 1.1934, 1.1969

From a technical point of view, the general trend on the EUR/USD currency pair is bearish. The price is declining within a bearish trend. Under such market conditions, it is better to look for the sell deals from the resistance levels, when there is an initiative from the sellers. Buy trades can be considered only from the support levels and only after the buyers’ initiative. There is divergence that occured in the MACD indicator, so the price may correct a little bit higher.

Alternative scenario: if the price breaks through the 1.1854 resistance level and fixes above, the mid-term uptrend will likely resume.

• – US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.3734
• Prev Close: 1.3751
• % chg. over the last day: +0.12%

UK inflation decreased from 2.5% to 2%, which is in line with the Bank of England’s target rate. But analysts tend to believe that the UK inflation rate will increase to 4% this year as the National Statistics does not account for the initial spike in prices in the early stages of last year’s quarantine restrictions in its calculations.

• Support levels: 1.3714, 1.3676 ,1.3641, 1.3614, 1.3525
• Resistance levels: 1.3802, 1.3772, 1.3886, 1.3935, 1.4002, 1.4075, 1.4101

The trend of the GBP/USD currency pair is bullish on the hourly timeframe. But the price is close to the priority change level. The MACD indicator is in the negative zone, there are signs of a reversal in the form of divergence. Under such market conditions, traders are better to look for the buy trades from the priority change level. But it is better to enter with confirmation because the sellers’ pressure is very strong.

Alternative scenario: if the price breaks through the 1.3714 support level and consolidates below, the bearish scenario is likely to resume.

The USD/JPY currency pair

• Prev Open: 109.55
• Prev Close: 109.76
• % chg. over the last day: +0.19%

The USD/JPY currency pair is rising amid a strengthening of the dollar index. There is a medium-term trend on the currency pair is expected to be observed, as no significant changes in the monetary policy of Japan are expected in the near future.

• Support levels: 110.04, 109.43, 109.19, 108.65
• Resistance levels: 110.34, 110.66, 110.95, 111.48

The main trend on the USD/JPY currency pair is bullish. The price managed to consolidate above the moving average line. The MACD indicator began to show growth without any signs of a reversal. Under such market conditions, it is better to look for the buy positions from the support level, where the buyers show initiative. Sell positions should be considered only on the lower timeframes from the resistance levels with short targets.

Alternative scenario: if the price falls below 109.19, the uptrend is likely to be broken.

The USD/CAD currency pair

• Prev Open: 1.2523
• Prev Close: 1.2652
• % chg. over the last day: +0.23%

Canada’s annual inflation rate increased to 3.7%, the biggest jump in a decade. Yesterday, oil prices declined slightly and the dollar index rose, as a result, USD/CAD quotations increased by 0.23% and broke through the priority change level.

• Support levels: 1.2663, 1.2642, 1.2602, 1.2561, 1.2518
• Resistance levels: 1.2733, 1.2787, 1.2951

In terms of technical analysis, the trend on the currency pair USD/CAD has changed to bullish. But now the price has deviated strongly from the moving average, the MACD indicator is in the overbought zone with signs of a hidden divergence. Under such market conditions, traders are better to look for sell positions from the resistance levels, after the sellers’ initiative appears. Buy positions should be considered from the support levels after a slight pullback below.

Alternative scenario: if the price breaks through the 1.2562 support level and fixes below, the uptrend is likely to be broken.