by JustForex
From a fundamental point of view, the European currency now has no triggers for growth as investors buy the US dollar as a protective asset. At the same time, the ECB is unlikely to tighten monetary policy due to new inflationary risks caused by Russia’s invasion of Ukraine.
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 still signs of divergence to the buying side on several timeframes. The price has reached the support level of the higher time frame. Under such market conditions, it is best to look for sell trades on intraday time frames from the resistance level of 1.0921. Buy trades should be considered from the support level of 1.0823, but only after additional confirmation in the form of a buyers’ initiative.
Alternative scenario: if the price breaks out through the 1.1061 resistance level and fixes above, the mid-term uptrend will likely resume.
The British pound is also now under pressure due to the growth of the dollar index. Yield spreads on the UK and US government bonds are currently declining, putting pressure on the British pound.
On the hourly time frame, the trend on the GBP/USD currency pair is bearish. Volatility is high, sellers’ pressure is still there, but the MACD indicator shows a divergence towards long deals. Under such market conditions, buy trades should be looked for from a daily support level of 1.3091, but preferably with additional confirmation. The resistance level of 1.3175 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 1.3315 resistance level and fixes above, the mid-term uptrend will likely resume.
The Japanese yen and the US dollar are safe-haven currencies. Since there are currently no prospects for ending the war in Ukraine, investors are buying the yen as a protective asset against inflationary risks. At the same time, it should be remembered that the policy of the Japanese central bank is now aimed at making the Japanese yen cheaper (USD/JPY growth), and the US Federal Reserve will begin to tighten monetary policy this month. As a result, the USD/JPY currency pair is trading in a wide price range.
The medium-term trend on the USD/JPY currency pair is bullish, but the structure is flatter, as the price has no single dynamics and the price is trading in a wide corridor. The MACD indicator has become positive, and long positions prevail inside the day. Under such market conditions, it is best to look for buy deals on the lower time frames from the support level of 115.13, but with additional confirmation. Sell deals should be considered from the resistance level of 115.69, but it is better to wait for the reaction of sellers.
Alternative scenario: if the price fixes below 114.71, the uptrend will likely be broken.
The situation on the USD/CAD currency pair remains the same. The Canadian dollar is a commodity currency, so it is highly dependent not only on the monetary policy of the Bank of Canada but also on the dynamics of oil prices and the dollar index. The fundamental picture now is that both the dollar index and oil prices will grow. Investors buy the dollar index as a defensive asset during the war. This month, the Fed will begin to tighten monetary policy, providing additional support to the US currency. Oil prices could rise further as investors continue to hold on to oil contracts for fear of disruption from Russia and as the US considers imposing a ban on oil and gas supplies from Russia.
In terms of technical analysis, the USD/CAD currency pair trend is bullish. The price is trading above the moving average lines, the MACD indicator is in the positive zone, but there are the first signs of divergence, which means the growth potential is limited. It is worth trading only with short targets because both oil and the dollar index are inclined to grow now. Under such market conditions, it is better to look for buy deals on the lower time frames from the support level of 1.2726, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2876.
Alternative scenario: if the price breaks through and consolidates below 1.2653, the downtrend will most likely resume.
by JustForex
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
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