The Analytical Overview of the Main Currency Pairs on 2022.01.28

The EUR/USD currency pair

• Prev Open: 1.1237
• Prev Close: 1.1144
• % chg. over the last day: -0.83%

The Euro is falling fast against the background of the strengthening USD index. The dollar is getting stronger as markets are pricing in 4-5 interest rate hikes this year, while the ECB doesn’t have plans to raise rates in 2022 and keeps pumping money into the region’s economy, despite the fact that inflation remains extremely high in Europe and there are only 25-30% of the gas reserves left.

• Support levels: 1.1145
• Resistance levels: 1.1186, 1.1215, 1.1263, 1.1308

From a technical point of view, the EUR/USD on the hour time frame is bearish. The selling pressure has increased, but now the price has reached the support level. Under such market conditions, it is better to consider sell trades after a small pullback, as the price has strongly deviated from the average values. With buy deals, it is necessary to be extremely careful now. It is possible now to look for buy deals on lower time frames, but only with short targets.

Alternative scenario: if the price breaks out through the 1.1308 resistance level and fixes above, the mid-term uptrend will be renewed.

• – Eurozone French GDP (q/q) at 08:30 (GMT+2);
• – Eurozone Spanish GDP (q/q) at 10:00 (GMT+2);
• – Germany GDP (q/q) at 11:00 (GMT+2);
• – US PCE price index (m/m) at 15:30 (GMT+2);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3460
• Prev Close: 1.3380
• % chg. over the last day: -0.60%

Analysts forecast that the Bank of England will raise interest rates to 0.5% at its next meeting in February. The Bank of England will continue to raise rates at least until the summer. The current forecast is that the rate will reach 1% by June 2022. If these forecasts are confirmed, the British pound will get significant support. At the moment, the major currencies are declining on the back of the dollar index growth.

• Support levels: 1.3352
• Resistance levels: 1.3415, 1.3468, 1.3524, 1.3583, 1.3633, 1.3662

On the hourly time frame, the GBP/USD trend is bearish. The MACD is negative, but there is divergence towards buy deals. Under such market conditions, sell deals are best to look at from the resistance levels of 1.3468. Buy trades should be considered from the support level of 1.3352, but only with an additional confirmation in the form of buyers’ initiative.

Alternative scenario: if the price breaks out through the 1.3554 resistance level and consolidates above, the bearish scenario will be broken.

The USD/JPY currency pair

• Prev Open: 114.61
• Prev Close: 115.35
• % chg. over the last day: +0.64%

The monetary policy of the Bank of Japan is now aimed at making the Japanese Yen cheaper because of the maximum economic stimulus, while the Fed is tightening monetary policy. Tokyo core consumer prices (excluding food and fuel prices) rose by 0.2% in January from a year earlier, above economists’ average estimate of 0.3%.

• Support levels: 115.05, 114.77, 114.37
• Resistance levels: 115.51, 115.73

The global trend on the USD/JPY currency pair is bullish. But the price has now deviated strongly from the average values and reached the resistance level, so it is better to wait for a small pullback. It is best to buy from the support level of 114.77 or 115.05 on the lower time frames. Sell positions are better to look at lower time frames, but only with confirmation in the form of a sellers’ initiative.

Alternative scenario: if the price fixes below 114.37, the uptrend will likely be broken.

• – Japan Tokyo core CPI (m/m) at 01:30 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.2659
• Prev Close: 1.2741
• % chg. over the last day: +0.64%

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. Oil was stable yesterday, while the dollar index significantly strengthened. As a result, the USD/CAD quotes jumped.

• Support levels: 1.2671, 1.2613, 1.2586, 1.2506
• Resistance levels: 1.2745, 1.2792

From a technical point of view, the USD/CAD currency pair is bullish. USD/CAD quotes are growing against the growth of the dollar index and do not take into account the increase in oil prices. Under such market conditions, it is better to look for buy trades from the support levels closer to the moving average. The level of 1.2613 is the best for long deals, but the price can also react to 1.2671. Now the price has reached the resistance level, so on the lower time frames, traders can look for sell trades, but only with short targets.

Alternative scenario: if the price breaks through the 1.2577 support level and fixes below, the downtrend is likely to resume.