The Analytical Overview of the Main Currency Pairs on 2022.01.11

The EUR/USD currency pair

• Prev Open: 1.1355
• Prev Close: 1.1328
• % chg. over the last day: -0.24%

Any increase in the ECB’s inflation forecast at its upcoming meeting in March could raise expectations of earlier monetary policy tightening by the ECB, but amid the Fed’s aggressive interest rate hike, most analysts are leaning toward a bearish EUR/USD outlook over the medium term of several months.

• Support levels: 1.1305, 1.1288, 1.1271
• Resistance levels: 1.1350, 1.1369, 1.1436, 1.1535, 1.1613, 1.1667, 1.1717

From a technical point of view, the EUR/USD on the hour time frame is bullish. The price is traded in a wide range, which is clearly visible on the daily chart. Yesterday, the price again tested the priority change level, but the buyers again defended their positions. Under such market conditions, it is better to consider sell deals from the 1.1350 resistance level, but with additional confirmation. Buy trades can be considered on the lower time frames from the support level 1.1305, but only with additional confirmation in the form of the buyers’ initiative.

Alternative scenario: if the price breaks down through the 1.1288 support level and fixes below, the mid-term uptrend will be broken.

• – ECB President Lagarde’s Speech at 12:20 (GMT+2);
• – US FOMC Member Mester’s Speech at 16:00 (GMT+2);
• – US FOMC Member George’s Speech at 16:30 (GMT+2);
• – US Fed Chair Powell’s Testifies at 17:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3573
• Prev Close: 1.3575
• % chg. over the last day: +0.01%

Omicron could cause $48 billion in damage to the UK economy. The projected loss is equivalent to 8.8% of gross domestic product and is based on government planning assumptions of 25% isolation. The British currency is strengthening right now on the back of a rate hike from the Bank of England, but any strengthening of the dollar index in the near term could trigger a decline in GBP/USD.

• Support levels: 1.3551, 1.3473, 1.3396, 1.3352, 1.3257, 1.3220
• Resistance levels: 1.3597, 1.3685

On the hourly time frame, the trend on GBP/USD is bullish. The price is now trading in a wide corridor. The MACD indicator is still signaling divergence. Under such market conditions, traders should consider buy positions from the 1.3551 support level but only with additional confirmation in the form of a buyers’ initiative. Sell trades can be considered from the resistance level of 1.3597 after a new initiative from the sellers.

Alternative scenario: if the price breaks down through the 1.3473 support level and consolidates below, the bearish scenario will likely resume.

The USD/JPY currency pair

• Prev Open: 115.60
• Prev Close: 115.18
• % chg. over the last day: -0.36%

The Japanese Yen has strengthened a little bit in the last few days. Such corrections are acceptable and necessary for further uptrend. The mid-term fundamental picture right now is in favor of a stronger dollar index and a weaker JPY as the Fed is preparing for 3 or 4 interest rate hikes this year as the BoJ continues its aggressive stimulus program.

• Support levels: 115.09, 113.74
• Resistance levels: 115.34, 115.64, 116.08, 116.50

The global USD/JPY currency pair trend is bullish. However, the price reached the priority change level yesterday. The MACD indicator became negative. It is best to look for buy deals from the support levels on the lower time frames, near the priority change level. Sell positions are better to look from the resistance level of 115.64, but only with confirmation and with short targets.

Alternative scenario: if the price fixes below 115.09, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2641
• Prev Close: 1.2676
• % chg. over the last day: +0.28%

The Canadian dollar is a commodity currency, so it depends not only on the monetary policy of the Bank of Canada but also on the oil prices and the dollar index. Against the background of the stable oil and a slight decrease of the dollar index, the USD/CAD quotes went up a little bit yesterday. The speech of Federal Reserve Chairman Jerome Powell, in front of the US Senate, should be watched closely today. This speech might provoke the dollar index growth and lead to the rise of USD/CAD quotes.

• Support levels: 1.2628, 1.2598
• Resistance levels: 1.2681, 1.2715, 1.2792, 1.2824, 1.2903, 1.2951

From a technical point of view, the USD/CAD currency pair has changed to bearish. Friday’s increase in oil prices and the decline in the dollar index on non-farm reports led to the strengthening of the Canadian dollar. But the price broke through the local downward trend line yesterday, which suggests a possible correction in the coming days. The MACD indicator has become inactive. Under such market conditions, it is better to look for buy trades from 1.2628. It is best to look for sell deals from the resistance levels around the moving average.

Alternative scenario: if the price breaks through the 1.2792 resistance level and fixes above, the downtrend is likely to be broken.