The Analytical Overview of the Main Currency Pairs on 2022.03.11

The EUR/USD currency pair

• Prev Open: 1.1068
• Prev Close: 1.0988
• % chg. over the last day: -0.72%

Yesterday, the European Central Bank unexpectedly announced that it would begin cutting its bond-buying program in the third quarter of this year and open the door to raising the interest rate by the end of 2022 to fight rising inflation. The ECB also slightly lowered its growth forecasts for this year and next year and raised inflation expectations.

• Support levels: 1.0993, 1.0930, 1.0823
• Resistance levels: 1.1065, 1.1112, 1.1291

From the technical point of view, the EUR/USD currency pair trend on the hourly time frame is bearish, but there are signs that the price may change priority amid more hawkish statements from the ECB. The MACD indicator has become inactive. Under such market conditions, it is better to look for sell trades on the intraday time frames from the resistance of 1.1065 or 1.1112. Buy trades should be considered from the support level of 1.0993 or 1.0930, but only with short targets.

Alternative scenario: if the price breaks out through the 1.1112 resistance level and fixes above, the mid-term uptrend will likely resume.

• – German Consumer Price Index (m/m) at 09:00 (GMT+2);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3178
• Prev Close: 1.3083
• % chg. over the last day: -0.72%

The British pound is declining as the UK and the US government bond yield spread shows a downward trend. Optimism regarding an early end to the war in Ukraine is decreasing, putting pressure on rising energy prices and negatively affecting the British currency.

• Support levels: 1.3091
• Resistance levels: 1.3195, 1.3274, 1.3315, 1.3418

On the hourly time frame, the GBP/USD currency pair trend is bearish. Volatility remains high, and sellers’ pressure is increasing again. The MACD indicator has become negative. Under such market conditions, buy trades should be considered from the support level of 1.3091, but it is better with confirmation because it has been tested by the price before. The best way to sell is to consider the resistance level of 1.3195, but only after the sellers’ initiative.

Alternative scenario: if the price breaks out through the 1.3274 resistance level and fixes above, the mid-term uptrend will likely resume.

• – UK GDP (m/m) at 09:00 (GMT+2);
• – UK Industrial Production (m/m) at 09:00 (GMT+2);
• – UK Manufacturing Production (m/m) at 09:00 (GMT+2).

The USD/JPY currency pair

• Prev Open: 115.79
• Prev Close: 116.12
• % chg. over the last day: +0.28%

The US Federal Reserve and the Bank of Japan will hold monetary policy meetings next week. Still, although the Federal Reserve will almost certainly raise interest rates, the Bank of Japan will remain in monetary policy for a long time. This situation favors the growth of USD/JPY quotes. The dollar has already reached a five-year high against the yen. But investors should remember that the Japanese yen is a safe-haven currency in case of various financial disturbances. In this regard, the war in Ukraine may make adjustments.

• Support levels: 116.32, 115.50, 115.13, 114.71, 114.41
• Resistance levels: 117.11

The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator is in the positive zone. There are signs of overselling but no signs of reversal. Under such market conditions, it is best to look for buy deals after a small pullback, as the price has strongly deviated from the moving averages. A support level of 116.32 would be best, but with additional confirmation. For sell deals, a resistance level of 117.11 can be considered, but it is necessary to wait for the reaction of sellers.

Alternative scenario: if the price fixes below 115.50, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2806
• Prev Close: 1.2768
• % chg. over the last day: -0.30%

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 dollar index showed a slight growth yesterday, while oil remained stable. As a result, the USD/CAD quotes are traded in the price corridor.

• Support levels: 1.2737, 1.2653, 1.2555, 1.2517
• Resistance levels: 1.2815, 1.2871, 1.2890

From a technical point of view, the USD/CAD currency pair trend is bullish. The price trades between the moving averages, indicating a more flat structure within a bullish trend. It is worth trading only with short targets, as both oil and the dollar index are still fundamentally inclined to rise. Under such market conditions, it is better to look for buy trades on lower time frames from the support level of 1.2737, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2815.

Alternative scenario: if the price breaks through and consolidates below 1.2737, the downtrend will likely resume.

• – Canada Unemployment Rate (m/m) at 15:30 (GMT+2).