The Analytical Overview of the Main Currency Pairs on 2022.03.17

The EUR/USD currency pair

• Prev Open: 1.0951
• Prev Close: 1.1030
• % chg. over the last day: +0.72%

Consumer price indexes data will be published in Europe today. Analysts forecast that inflation in the Eurozone will remain at the same level. If the actual value is higher than projected, it could have a positive effect on the EUR as higher inflation always increases the likelihood that the central bank will start to tighten its monetary policy. Investors should also pay attention to what ECB head Christine Lagarde says. If the ECB does not hint at tightening policy, it is negative for the euro.

• Support levels: 1.0917, 1.0887, 1.0823, 1.0633
• Resistance levels: 1.1051, 1.1112, 1.1291

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The price is now trading in the price corridor near the moving averages. The MACD indicator has become positive. Under such market conditions, it is best to look for sell trades on intraday time frames from the resistance level of 1.1051. Buy trades should be considered from the support level 1.0917, 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.

• – Eurozone ECB President Lagarde Speaks at 11:30 (GMT+2);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+2);
• – US Building Permits (m/m) at 14:30 (GMT+2);
• – US Initial Jobless Claims (w/w) at 14:30 (GMT+2);
• – US Philadelphia Fed Manufacturing Index (m/m) at 14:30 (GMT+2);
• – US Industrial Production (m/m) at 15:15 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3037
• Prev Close: 1.3143
• % chg. over the last day: +0.81%

The Bank of England will hold its monetary policy meeting today. Analysts predict that the Bank of England will once again raise the rate by 0.25%. Thus, the interest rate in the UK will be 0.75%, and in the US – 0.5%. Such differences will play in favor of the British currency strengthening. The question is how the Bank of England will further regulate the monetary policy.

• Support levels: 1.3113, 1.2989, 1.2863
• Resistance levels: 1.3194, 1.3274

On the hourly time frame, the GBP/USD currency pair trend is bearish, but the price is approaching the priority change level. The MACD indicator has become positive, buyers’ pressure has increased. Under such market conditions, buy trades should be considered from the support level of 1.3113, but better with confirmation. The best way to sell is to consider the resistance level of 1.3194, but only with confirmation in the form of the sellers’ initiative.

Alternative scenario: if the price breaks out through the 1.3194 resistance level and fixes above, the mid-term uptrend will likely resume.

• – UK BoE Interest Rate Decision at 14:00 (GMT+2);
• – UK BoE Monetary Policy Summary at 14:00 (GMT+2).

The USD/JPY currency pair

• Prev Open: 118.29
• Prev Close: 118.75
• % chg. over the last day: +0.39%

On Thursday, Bank of Japan Governor Haruhiko Kuroda reduced the probability of inflation reaching the 2% target and argued for maintaining an ultra-soft monetary policy. In turn, an interest rate hike from the Fed is a positive sign for the strength of the dollar index. Therefore, USD/JPY quotes will continue to rise in the medium term.

• Support levels: 118.42, 117.69, 117.34, 116.95, 116.32
• Resistance levels: 119.04

The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator is in the positive zone. There are signs of overbought and divergence, which means that a corrective move down is close. 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 118.42 or 117.69 would be best, but with additional confirmation. For sell deals, the resistance level of 119.04 can be considered.

Alternative scenario: if the price fixes below 116.95, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2765
• Prev Close: 1.2676
• % chg. over the last day: -0.70%

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 behavior of oil prices and the dollar index. Canada’s inflation rate has risen another 1% to 5.7% in annual terms, the highest since 1991. The Canadian dollar is strengthening as the Central Bank of Canada begins to tighten its monetary policy more aggressively. Rising oil prices also contribute to the strength of the Canadian currency.

• Support levels: 1.2653, 1.2555, 1.2517
• Resistance levels: 1.2713, 1.2776, 1.2851

In terms of technical analysis, the bullish trend on the USD/CAD currency pair is very close to breaking. The support level of 1.2653 is the key level. The MACD indicator has become negative, the sellers’ pressure has increased, but there are signs of divergence. Trade only with short targets because there are no prerequisites for the medium-term trend on the USD/CAD currency pair. 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 1.2713.

Alternative scenario: if the price breaks through and consolidates below 1.2653, the downtrend will likely resume.