The Analytical Overview of the Main Currency Pairs on 2022.03.29

The EUR/USD currency pair

• Prev Open: 1.0983
• Prev Close: 1.0986
• % chg. over the last day: +0.03%

The fundamental picture for the dollar index is now positive, while it is negative for the European currency. This is because the Fed will aggressively raise interest rates this year and most likely next year, while the ECB does not plan to change its monetary policy until the end of 2022. In Europe, conditions are ripe for tightening monetary policy based on an analysis of the ratio of inflation to interest rates. The medium-term forecast is a decrease in EUR/USD.

• Support levels: 1.0963, 1.0917, 1.0887, 1.0823, 1.0633
• Resistance levels: 1.1007, 1.1037 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. The MACD indicator is positive, the buyer’s pressure has increased. Under such market conditions, it is better to look for sell trades on the intraday time frames from the resistance level of 1.1007. Buy trades should be considered from the support level of 1.0917, but only with short targets.

Alternative scenario: if the price breaks out through the 1.1037 resistance level and fixes above, the mid-term uptrend will likely resume.

• – US FOMC Member Williams Speech at 16:00 (GMT+3);
• – US CB Consumer Confidence at 17:00 (GMT+3);
• – US JOLTs Job Openings (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.3172
• Prev Close: 1.3093
• % chg. over the last day: -0.60%

The latest Bank of England meeting minutes and politicians’ comments indicate that the Bank of England is ready to take a more dovish stance and stop with further rate hikes. Even despite the growth of inflation, which this year might reach 8%. As a result, the fundamental picture for the GBP/USD currency pair looks extremely vague. On the one hand, the tightening of the US Federal Reserve’s policy will help strengthen the dollar. On the other hand, the Bank of England may change its mind and continue to raise interest rates to fight inflation. As a result, the GBP is in a better position than the EUR but worse than the USD. The medium-term forecast is a decline in GBP/USD.

• Support levels: 1.3074, 1.3015, 1.2989, 1.2863
• Resistance levels: 1.3138, 1.3244, 1.3274

On the hourly time frame, the GBP/USD currency pair trend is bullish. But yesterday, the price tested the priority change level. The movement was impulsive, and the buyers’ reaction was weak, so there is a high probability of breaking the level of 1.3074 and changing the priority. But the MACD indicator shows the weakness of the sellers. Under such market conditions, buy trades should be looked for from the support level of 1.3074, but better with confirmation in the form of buyers’ initiative. Currently, there is none. The best way to sell is to consider the resistance level of 1.3138, 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.

The USD/JPY currency pair

• Prev Open: 122.03
• Prev Close: 123.90
• % chg. over the last day: +1.53%

The monetary policy of the Bank of Japan is now “ultra-soft” because Japan wants to accelerate inflation, which has been one of the lowest in the world. Extremely low inflation is also bad for the economy and is even worse than high inflation in some cases. Given that the US Federal Reserve plans to aggressively raise interest rates at future meetings in 2022, this situation favors the growth of USD/JPY quotes in the mid-term.

• Support levels: 122.74, 122.37, 120.89, 119.96, 119.52, 118.58, 118.06
• Resistance levels: 125.22

The medium-term trend on the USD/JPY currency pair is bullish. The price breaks through the resistance levels without significant corrections. The lesser the pullbacks, the bigger and faster will be the fall on the corrective movement. The MACD indicator is in the positive zone. There are signs of overbought and divergence in several time frames. 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 122.37 would be the best, but with additional confirmation. The resistance level of 125.22 can be considered for sell deals, but only after the sellers’ initiative.

Alternative scenario: if the price fixes below 120.89, the uptrend will likely be broken.

• – Japan Unemployment Rate (m/m) at 02:30 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.2482
• Prev Close: 1.2517
• % chg. over the last day: +0.28%

Currencies such as the Canadian dollar and the Australian dollar are commodity currencies highly dependent on oil prices. The rally in the oil market has stalled a bit. Oil corrected slightly yesterday. But the supply shortage is still here. Saudi Arabia cannot provide additional supplies due to the Yemeni Hussein attacks on the country’s oil infrastructure, and the nuclear deal with Iran is still far from over. So fundamentally, analysts predict the strengthening of the Canadian dollar. But since the dollar index is now also supported by the Fed, investors should not expect medium-term trends in the USD/CAD currency pair.

• Support levels: 1.2495, 1.2453
• Resistance levels: 1.2591, 1.2655, 1.2713, 1.2754, 1.2851

In terms of technical analysis, the USD/CAD currency pair trend is bearish. But because of yesterday’s decline in oil prices, there was a buyers’ reaction in the form of an impulse movement. The MACD indicator has become inactive. 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 1.2495 or 1.2453, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2654.

Alternative scenario: if the price breaks through and consolidates above 1.2654, the downtrend will likely be broken.