The Analytical Overview of the Main Currency Pairs on 2022.01.25

The EUR/USD currency pair

• Prev Open: 1.1340
• Prev Close: 1.1324
• % chg. over the last day: -0.14%

Germany has seen an increase in business activity in both manufacturing and services sectors. In the Euro Area, industrial business activity also remained at a high level but activity in the service sector decreased slightly in December. Taking into account the fact that this period was the height of the Omicron disease, analysts predicted a decrease in the indicators, so the data were better than expected.

• Support levels: 1.1288
• Resistance levels: 1.1356, 1.1384, 1.1414

From the technical point of view, the EUR/USD on the hour time frame is bearish. The MACD indicator has become inactive, but there is divergence towards buying. Under such market conditions, it is better to consider sell trades from the resistance levels near the moving average. Buy trades can be considered on the lower time frames from the support level of 1.1288, but only with additional confirmation in the form of a buyers’ initiative.

Alternative scenario: if the price breaks out through the 1.1384 resistance level and fixes above, the mid-term uptrend will be renewed.

• – German Ifo Business Climate (m/m) at 11:00 (GMT+2);
• – US CB Consumer Confidence (m/m) at 17:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3548
• Prev Close: 1.3489
• % chg. over the last day: -0.44%

UK PMI data for December showed a significant decline in both the manufacturing and services sectors. The reason is the spread of the Omicron strain, as well as a number of restrictions that have been imposed as a result of the rising incidence of disease. But this weekend, the UK lifted all the bans and returned the economy to Plan A, so analysts are confident that the PMI data will return to growth. The rise in the dollar index negatively impacts the British pound.

• Support levels: 1.3431, 1.3352
• Resistance levels: 1.3524, 1.3583, 1.3633, 1.3662

On the hourly time frame, the GBP/USD trend is bearish. The MACD indicator is in the negative area, but there are signs of divergence on higher time frames. Under such market conditions, sell deals are best to look at from the resistance levels near the moving average. Buy trades should be considered from the support level of 1.3431, but only with an additional confirmation in the form of buyers’ initiative.

Alternative scenario: if the price breaks out through the 1.3583 resistance level and consolidates above, the bearish scenario will be broken.

The USD/JPY currency pair

• Prev Open: 113.65
• Prev Close: 113.97
• % chg. over the last day: +0.28%

The Japanese Yen at the moment acts as a safe haven currency for investors. For this reason, an increase in the dollar index doesn’t significantly impact the USD/JPY quotes. On the other hand, the monetary policy of the Bank of Japan is now aimed at making the Japanese Yen cheaper because of the maximum economic stimulus. Therefore, as soon as the situation with the Fed is clarified and tension will fall, USD/JPY quotes are likely to return to a medium-term uptrend.

• Support levels: 113.64, 113.25, 112.87
• Resistance levels: 113.99, 114.63, 115.04, 115.35, 115.64

The global trend on the USD/JPY currency pair is bearish. The price is now trading in a corridor with a range of 113.64-113.99. Buy deals are best to look at the lower time frames from the lower border of the range. Sell trades can be considered from the resistance level of 113.99, but only with confirmation in the form of a sellers’ initiative.

Alternative scenario: if the price fixes above 114.63, the uptrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2575
• Prev Close: 1.2635
• % chg. over the last day: +0.48%

The Canadian dollar is a commodity currency, so it depends on the monetary policy of the Bank of Canada, but also the oil prices and the dollar index. Yesterday, oil quotes continued to go down, while the dollar index went up. As a result, the USD/CAD quotes are showing a local upward dynamic. The central bank of Canada will hold its meeting this week, where there may be surprises in the form of an interest rate hike.

• Support levels: 1.2629, 1.2586, 1.2506
• Resistance levels: 1.2698, 1.2754, 1.2813

From a technical point of view, the USD/CAD currency pair has changed to bullish. The price confidently broke through the priority change level and consolidated above. The MACD indicator is positive, with no signs of reversal, the pressure of buyers remains high. Under such market conditions, it is better to look for buy trades from the support levels closer to the moving average. Sell trades are best to consider from the resistance levels of higher time frames, but only with additional confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks through the 1.2506 support level and fixes below, the downtrend is likely to resume.