The Analytical Overview of the Main Currency Pairs on 2022.04.06

The EUR/USD currency pair

• Prev Open: 1.0971
• Prev Close: 1.0905
• % chg. over the last day: -0.60%

Belgian central bank governor Pierre Wunsch said the European Central Bank might raise interest rates to zero as early as this year to fight high inflation. But so far, it’s all just talk, so verbal comments from the US Federal Reserve officials about tightening monetary policy have a greater impact on the dollar index and, accordingly, on the European currency. Currently, the mid-term forecast for the EUR/USD currency pair is negative.

• Support levels: 1.0887, 1.0823, 1.0633
• Resistance levels: 1.0946, 1.0963, 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 is bearish. The price is confidently declining. 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 1.0887, but only with short targets and confirmation. Sell trades should be considered from the resistance level of 1.0946 or 1.0963, 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.

• – Eurozone Producer Price Index (m/m) at 12:00 (GMT+3);
• – US FOMC Meeting Minutes at 21:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.3111
• Prev Close: 1.3071
• % chg. over the last day: -0.30%

The PMI index in the UK services sector showed strong growth yesterday. Economic indicators of the UK continuos to show growth, unlike other European countries. The strengthening of the dollar index negatively affects the British currency, but the pound looks more stable than the euro.

• Support levels: 1.3067, 1.3015, 1.2989, 1.2863
• Resistance levels: 1.3144, 1.3161, 1.3244, 1.3274

On the hourly time frame, the GBP/USD currency pair trend is still bullish. But sellers’ pressure intensifies, and the price tests the priority change level for the second time. The MACD indicator has become negative. Under such market conditions, buy trades should be considered from the support level of 1.3067, but only after confirmation in the form of a buyers’ initiative. Sell deals should also be considered from the resistance level of 1.3144 if the price shows a bearish initiative.

Alternative scenario: if the price breaks down through the 1.3067 support level and fixes below, the mid-term uptrend will likely be broken.

• – UK Construction PMI (m/m) at 11:30 (GMT+3).

The USD/JPY currency pair

• Prev Open: 122.77
• Prev Close: 123.59
• % chg. over the last day: +0.66%

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). In the debt market, US bonds reached almost a three-year high amid hawkish statements from Fed officials, while Japanese bond yields are at the same level. The dollar index increased to its highest level in almost two years. 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: 122.97, 122.63, 121.83, 120.88, 119.52, 117.72
• Resistance levels: 125.22

The medium-term trend on the USD/JPY currency pair is bullish. The buyer’s pressure is increasing again. The MACD indicator has become positive. 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 122.97 or 122.63, but with additional confirmation. A resistance level of 125.22 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: 1.2478
• Prev Close: 1.2486
• % chg. over the last day: +0.06%

The Canadian dollar is a commodity currency and is highly dependent on the movement of oil prices and the dollar index. Oil prices fell yesterday. Tighter US monetary policy will put downward pressure on oil prices, but it is positive for the dollar index. On the other hand, the Bank of Canada plans to tighten its monetary policy. The USD/CAD currency pair will show wide volatility without any dynamics in the medium term.

• Support levels: 1.2430
• 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 wide flat structure. The MACD indicator has become positive. Trade only with short targets, since fundamentally on the USD/CAD currency pair, there are no prerequisites for the medium-term trend. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2430, 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 1.2592, the downtrend will likely be broken.

• – Canada Ivey PMI (m/m) at 17:00 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3).