The Analytical Overview of the Main Currency Pairs on 2022.03.04

The EUR/USD currency pair

• Prev Open: 1.1115
• Prev Close: 1.1065
• % chg. over the last day: -0.45%

The euro had its worst week against the dollar in nine months as the war in Ukraine, and the prospect of continued high commodity prices continue to dampen economic growth expectations in Europe. Analysts believe that all sanctions that are directly or indirectly imposed on Russia will also affect European countries.

• Support levels: 1.1032
• Resistance levels: 1.1213, 1.1273, 1.1392, 1.1459

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The MACD indicator is in the negative area, but there are signs of divergence to the buying side. There is a narrowing of liquidity. Under such market conditions, it is best to look for sell trades on intraday time frames from the resistance level of 1.1213. Buy trades should be considered from the support level of 1.1032, but only after an additional confirmation in the form of a buyers’ initiative.

Alternative scenario: if the price breaks out through the 1.1213 resistance level and fixes above, the mid-term uptrend will likely resume.

• – Eurozone Retail Sales (m/m) at 12:00 (GMT+2);
• – US Nonfarm Payrolls (m/m) at 15:30 (GMT+2);
• – US Unemployment Rate (m/m) at 15:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3401
• Prev Close: 1.3348
• % chg. over the last day: -0.40%

The British pound looks more stable than the euro. The UK economy is not so strongly connected with the Russian economy, so sanctions against the aggressor country will not harm the economic development of the UK.

• Support levels: 1.3315, 1.3382, 1.3274, 1.3220
• Resistance levels: 1.3442, 1.3486, 1.3529, 1.3560

On the hourly time frame, the GBP/USD currency pair trend is bearish. Volatility remains high, and the price is trading in a wide corridor. Under such market conditions, buy trades should be considered from the support level of 1.3315, but it is better with confirmation. The resistance level of 1.3442 is good for sell deals, but only with additional confirmation in the form of sellers’ initiative.

Alternative scenario: if the price breaks out through the 1.3442 resistance level and fixes above, the mid-term uptrend will likely resume.

• – UK Construction PMI (m/m) at 11:30 (GMT+2).

The USD/JPY currency pair

• Prev Open: 115.52
• Prev Close: 115.46
• % chg. over the last day: -0.05%

Prime Minister Kishida wants the new BOJ governor to work to end deflation. Markets are anticipating a change in leadership at the Bank of Japan (BOJ), anticipating possible changes in its massive asset purchases and yield curve controls, which have failed to raise inflation to its 2% target and have drawn criticism for hurting financial institutions’ profits. At the moment, the Bank of Japan is actively stimulating the economy with money, as the US Federal Reserve did last year.

• Support levels: 114.86, 114.78, 114.41
• Resistance levels: 115.69, 115.87, 116.32

The medium-term trend on the USD/JPY currency pair is bullish, but the structure is flatter, as the price has no single dynamics. The MACD indicator has become negative. Under such market conditions, it is best to look for buy deals on the lower time frames from the support level of 114.86, but with additional confirmation. For sell deals, a resistance level of 115.69 may be considered, but it is better to wait for the reaction of sellers.

Alternative scenario: if the price fixes below 114.86, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2629
• Prev Close: 1.2679
• % chg. over the last day: +0.39%

On Wednesday, the Bank of Canada raised its benchmark interest rate to 0.5%, the first in a series of small rate hikes this year to fight inflation that has reached its highest level in decades. Large foreign buyers are boycotting Russian oil because of the situation around Ukraine, trying to find alternative sources of supply, which is likely to push oil prices further. Disruptions to Russian oil exports due to Western sanctions outweigh the prospect of increased supplies from Iran due to a possible nuclear deal. However, if sanctions on Iran are lifted, oil prices may correct significantly.

• Support levels: 1.2653, 1.2555, 1.2517
• Resistance levels: 1.2723 1.2797

From the point of view of technical analysis, the USD/CAD currency pair trend is bearish. The MACD indicator has become positive, and the local downtrend line has been broken. Trade only with short targets because both oil and the dollar index are now inclined to grow. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2653, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2723.

Alternative scenario: if the price breaks through and consolidates above 1.2723, the downtrend will likely be broken.

• – Canada Unemployment Rate (m/m) at 15:30 (GMT+2);
• – Canada Ivey PMI (m/m) at 17:00 (GMT+2).