The Analytical Overview of the Main Currency Pairs on 2022.03.25

The EUR/USD currency pair

• Prev Open: 1.1003
• Prev Close: 1.0996
• % chg. over the last day: -0.06%

The dollar index has been rising for the four sessions in a row as economic data on the labor market confirmed expectations that the US Federal Reserve will take more aggressive steps to curb inflation. US durable goods orders unexpectedly fell in February due to a slowdown in shipments. Germany’s business activity index showed growth last month, even though sanctions imposed on Russia negatively affected the Eurozone economy. The fundamental picture is in the direction of EUR/USD quotes decline in the medium term.

• Support levels: 1.1010, 1.0962, 1.0917, 1.0887, 1.0823, 1.0633
• Resistance levels: 1.1079, 1.1112, 1.1291

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is still bearish, but the structure is getting more flat. The MACD indicator is inactive. Under such market conditions, it is better to look for sell trades on the intraday time frames from the resistance level of 1.1079. Buy trades should be considered from the support level of 1.1010, but only with short targets.

Alternative scenario: if the price breaks out through the 1.1079 resistance level and fixes above, the mid-term uptrend will likely resume.

• – Eurozone Germany Ifo Business Climate (m/m) at 11:00 (GMT+2);
• – Eurozone EU Leaders Summit at 12:00 (GMT+2);
• – US Michigan Consumer Sentiment (m/m) at 16:00 (GMT+2);
• – US Pending Home Sales (m/m) at 16:00 (GMT+2);
• – US FOMC Member Waller’s Speaks at 18:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3203
• Prev Close: 1.3183
• % chg. over the last day: -0.15%

The UK manufacturing PMI index declined over the past month, while the service sector activity index increased. The reason for the decline in business activity is high inflation. While against the background of reducing consumer demand and slowing GDP growth, the drop in indicators may be even greater.

• Support levels: 1.3173, 1.3140, 1.3074, 1.3015, 1.2989, 1.2863
• Resistance levels: 1.3244, 1.3274

On the hourly time frame, the GBP/USD currency pair trend has changed to bullish. The price is trading in the area of moving averages, opening up good opportunities for finding deals. The MACD indicator has become inactive. Under such market conditions, buy deals should be considered from the support level of 1.3140, but better with confirmation. For sell deals, it is better to consider the resistance level of 1.3244, but only with short targets.

Alternative scenario: if the price breaks down through the 1.3074 support level and fixes below, the mid-term uptrend will likely be broken.

• – UK Retail Sales (m/m) at 09:00 (GMT+2).

The USD/JPY currency pair

• Prev Open: 121.11
• Prev Close: 122.35
• % chg. over the last day: +1.02%

The Central Bank of Japan continues to actively stimulate the economy with “cheap” money, allowing Japan’s economy to maintain a stable growth trajectory, as evidenced by the growth of the Nikkei 225 index (JP225). However, this policy harms the national currency. Considering that the US Fed is planning to raise the interest rates more aggressively at the next meetings, this situation favors the growth of USD/JPY quotes in the mid-term.

• Support levels: 121.27, 120.78, 119.96, 119.52, 118.58, 118.06
• Resistance levels: 122.37

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 on several time frames. The price has reached the daily resistance level. There is a high probability of downward correction movement. Under such market conditions, it is best to look for buy deals after a pullback, as the price has strongly deviated from the moving averages. A support level of 120.78 or 119.96 would be the best, but with additional confirmation. The resistance level of 122.37 can be considered for sell deals, but only after the sellers’ initiative.

Alternative scenario: if the price fixes below 118.59, the uptrend will likely be broken.

• – Japan Tokyo core CPI (m/m) at 01:30 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.2561
• Prev Close: 1.2524
• % chg. over the last day: -0.29%

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 oil prices and the dollar index. Crude oil prices fell about 3% on Thursday as Europe abandoned the idea of banning supplies from Russia and the US began talking about another coordinated release of its reserves. A decline in oil prices may lead to a corrective downward movement of the Canadian dollar (growth in USD/CAD).

• Support levels: 1.2555, 1.2517
• Resistance levels: 1.2655, 1.2713, 1.2754, 1.2851

In terms of technical analysis, the USD/CAD currency pair trend is bearish. The price has reached the daily support level. The MACD indicator has become negative, but sellers’ pressure is decreasing. There are signs of divergence. The narrowing of liquidity in the form of a triangle led to an impulsive downward movement. However, there is no continuation, so there is a high probability of a false breakdown. It is worth trading only with short targets because on the USD/CAD currency pair fundamentally, there are no prerequisites for a medium-term trend, as the dollar index also has the support of the Fed in the medium term. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2555, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2655.

Alternative scenario: if the price breaks through and consolidates above 1.2713, the downtrend will likely be broken.