The Analytical Overview of the Main Currency Pairs on 2022.02.16

The EUR/USD currency pair

• Prev Open: 1.1306
• Prev Close: 1.1357
• % chg. over the last day: +0.45%

The European Central Bank continues to actively print money, despite Christine Lagarde’s promises to reduce the pace of asset purchases. At the same time, Ms. Lagarde said in her last speech that the ECB would not rush to cancel stimulus measures prematurely, as this could have negative consequences for the region’s economy. But in the medium term, analysts see a decrease in EURUSD quotes as the Fed will begin to tighten monetary policy next month actively.

• Support levels: 1.1283
• Resistance levels: 1.1368, 1.1392, 1.1423, 1.1481, 1.1534

From the technical point of view, the EUR/USD on the hourly time frame has changed to bearish. The price has corrected to the moving average. Under such market conditions, it is best to look for sell trades on intraday time frames from the resistance level of 1.1368 or 1.1392. Buy trades should be considered from the support level of 1.1283, but only with additional confirmation.

Alternative scenario: if the price breaks out through the 1.1423 resistance level and fixes above, the mid-term uptrend will likely resume.

• – Eurozone Industrial Production (m/m) at 12:00 (GMT+2);
• – US Retail Sales (m/m) at 15:30 (GMT+2);
• – US Industrial Production (m/m) at 16:15 (GMT+2);
• – US FOMC Meeting Minutes at 21:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3518
• Prev Close: 1.3540
• % chg. over the last day: +0.16%

The UK unemployment rate remained unchanged at 4.1% in the last quarter of 2021. Job openings also hit a new record, marking what the Employment Research Institute called “the tightest labor market in fifty years.” The UK labor market is stable, manufacturing is returning to pre-pandemic levels, and the Bank of England is raising interest rates, which will strengthen the British currency. Inflation data will be published in the UK today. Analysts expect consumer prices to remain unchanged.

• Support levels: 1.3506, 1.3475, 1.3457
• Resistance levels: 1.3547, 1.3594, 1.3639, 1.3662

On the hourly time frame, the GBP/USD currency pair trend is still bullish. Unlike the euro, the British pound has fundamental support. Under such market conditions, buy trades should be looked at from the support level 1.3506. The resistance level of 1.3594 may be considered for opening sell deals, but only with additional confirmation in the form of sellers’ initiative.

Alternative scenario: if the price breaks out through the 1.3475 support level and consolidates below, the bullish scenario will be broken.

• – UK Consumer Price Index (m/m) at 09:00 (GMT+2).

The USD/JPY currency pair

• Prev Open: 115.51
• Prev Close: 115.59
• % chg. over the last day: +0.07%

The monetary policy of the Bank of Japan is now aimed at making the Japanese yen cheaper because of the maximum stimulus. At the same time, the Fed plans to tighten its monetary policy aggressively. Such opposite policies of central banks contribute to the growth of USD/JPY quotes. However, it should be noted that the Japanese yen is considered a safe-haven currency in case of panic in the market. The geopolitical situation in Eastern Europe has somewhat calmed down, which sent some investors back to riskier assets.

• Support levels: 115.38, 115.21, 115.02, 114.76
• Resistance levels: 115.85, 116.12, 116.50

The global trend on the USD/JPY currency pair is bullish. The USD/JPY quotes are growing, and the price is trading in a corridor with wide volatility. The MACD indicator is inactive. Under such market conditions, it is best to look for buy deals on the lower time frames from the support level of 115.38, but with additional confirmation. Sell positions can be looked at from the resistance level 116.12, but only with short targets and additional confirmation.

Alternative scenario: if the price fixes below 115.02, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2726
• Prev Close: 1.2716
• % chg. over the last day: -0.08%

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. The USD/CAD currency pair is currently trading in a wide corridor, and now both currencies have fundamental support. On the one hand, the worsened situation in Eastern Europe contributes to the growth of the dollar index. On the other hand, oil prices are also rising due to the same geopolitics and limited supply. Inflation data will be released today in Canada. Analysts expect consumer prices to rise, which may strengthen the Canadian currency (USD/CAD quotes will decrease).

• Support levels: 1.2685, 1.2664, 1.2600, 1.2506
• Resistance levels: 1.2769, 1.2794

From a technical point of view, the USD/CAD currency pair is bullish. The price is in a wide flat with high volatility. It is worth trading only with short targets, as both oil and the dollar index are inclined to grow now. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2685. For sell deals, it is better to consider the resistance level of 1.2794, but with an additional confirmation in the form of an initiative of sellers.

Alternative scenario: if the price breaks through the 1.2664 support level and fixes below, the downtrend will likely resume.

• – Canada Consumer Price Index (m/m) at 15:30 (GMT+2);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+2).