The Analytical Overview of the Main Currency Pairs on 2022.04.05

The EUR/USD currency pair

• Prev Open: 1.1037
• Prev Close: 1.0972
• % chg. over the last day: -0.59%

ECB spokesman said yesterday that the European bond-buying program (PEPP) could end in July. Inflation in Europe has accelerated, and the ECB does not want to delay the tightening of monetary policy. New sanctions against Russia will also put negative pressure on the European currency.

• Support levels: 1.0963, 1.0917, 1.0887, 1.0823, 1.0633
• Resistance levels: 1.1027, 1.1075, 1.1135, 1.1196, 1.1291

From the technical point of view, the trend on the EUR/USD currency pair in the hourly time frame has changed to bearish. Yesterday, the price confidently broke through the priority change level and consolidated lower. The MACD indicator is in the negative zone. The price has reached the support level, so it is too late for sell deals. Under such market conditions, traders can look for buy trades on the intraday timeframes from the support level of 1.0963, but only with short targets. Sell trades should be considered from the resistance level of 1.1027 or 1.1075, but only after the additional confirmation.

Alternative scenario: if the price breaks out through the 1.1135 resistance level and fixes above, the uptrend will likely resume.

• – German Services (m/m) PMI at 10:55 (GMT+3);
• – Eurozone Services (m/m) PMI at 11:00 (GMT+3);
• – US ISM Services PMI (m/m) at 17:00 (GMT+3).
• – US FOMC Member Brainard Speaks at 18:05 (GMT+3);
• – US FOMC Member Williams Speaks at 21:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.3093
• Prev Close: 1.3114
• % chg. over the last day: +0.16%

Bank of England Governor Andrew Bailey said yesterday that monetary policy can do little to offset external pressures on prices and therefore cannot significantly offset the decline in household income caused by high inflation. Bailey once again mentioned the term “uncertainty” that the Bank of England would soon face.

• Support levels: 1.3074, 1.3015, 1.2989, 1.2863
• Resistance levels: 1.3130, 1.3161, 1.3244, 1.3274

On the hourly time frame, the GBP/USD currency pair trend is bullish. The British pound looks more confident than the euro. At the moment, narrowing liquidity in the form of a triangle pattern is forming. The MACD indicator became inactive. Under such market conditions, buy trades should be considered from the support level of 1.3130, but after an actual level breakdown. Sell deals should also be considered from the resistance level of 1.3130 if the price shows a bearish initiative.

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 Services PMI (m/m) at 11:30 (GMT+3).

The USD/JPY currency pair

• Prev Open: 122.59
• Prev Close: 122.73
• % chg. over the last day: +0.11%

The fundamental picture for the Japanese yen remains unchanged. The monetary policy of the Bank of Japan is now “ultra-soft” and aims to decrease the national currency rate (USD/JPY growth). US bonds show strong growth in the debt market, while Japanese bond yields are at the same level. The mid-term outlook remains unchanged – analysts see a continuation of the uptrend, as the monetary policy of the US and Japanese central banks are now opposed.

• Support levels: 121.83, 120.88, 119.52, 117.72
• Resistance levels: 123.44, 125.22

The medium-term trend on the USD/JPY currency pair is bullish. The price corrected to the moving averages and formed a narrow price range. The MACD indicator has become inactive. Under such market conditions, it is best to look for buy deals, expecting the continuation of the uptrend. First of all, it is worth considering the support level of 121.83, but with additional confirmation. A resistance level of 123.44 may be considered for sell deals, but only after the sellers’ initiative.

Alternative scenario: If the price fixes below 119.52, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2516
• Prev Close: 1.2486
• % chg. over the last day: -0.24%

The Canadian dollar is a commodity currency and is highly dependent on the movement of oil prices and the dollar index. The Bank of Canada Business Outlook Survey showed a slowdown in business investment growth. Canadian companies expect strong wage growth and rising product prices due to strong demand, inflation, and high commodity prices. Analysts believe that the Bank of Canada will likely raise interest rates on April 13.

• Support levels: 1.2453
• Resistance levels: 1.2520, 1.2563, 1.2655, 1.2713, 1.2754, 1.2851

In terms of technical analysis, the USD/CAD currency pair trend is bearish, but the price is getting a flat structure. The MACD indicator has become inactive. Trade only with short targets, since on the USD/CAD currency pair fundamentally, there are no prerequisites for the medium-term trend, as the dollar index in the medium term also has the support of the Fed. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2453, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2520.

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