The Analytical Overview of the Main Currency Pairs on 2022.04.07

The EUR/USD currency pair

• Prev Open: 1.0904
• Prev Close: 1.0894
• % chg. over the last day: -0.09%

The dollar index continued to rise. The US government bond yields also rose amid the Fed’s increasingly hawkish monetary policy. Now the Fed plans to aggressively raise interest rates and is going to cut the balance sheet from the summer. It’s a double tightening. Withdrawing liquidity from the financial system is good for the dollar index.

• 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, 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.

• – German Industrial Production (m/m) at 09:00 (GMT+3);
• – Eurozone Retail Sales (m/m) at 12:00 (GMT+3);
• – Eurozone ECB Monetary Policy Meeting Accounts at 14:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US FOMC Member Bullard Speaks at 16:00 (GMT+3);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+3);
• – US FOMC Member Williams Speaks at 23:05 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.3077
• Prev Close: 1.3068
• % chg. over the last day: -0.07%

The UK Construction PMI index remained unchanged. According to many experts, the UK economy is currently considered one of the most balanced economies in Europe, as rising inflation in the country has not yet led to a slowdown in economic indicators.

• 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. The price has now reached the priority change level, and the buyers can hold their positions. The MACD indicator has become inactive. Under such market conditions, buy trades should be considered from the support level of 1.3067. 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.

The USD/JPY currency pair

• Prev Open: 123.57
• Prev Close: 123.78
• % chg. over the last day: -0.17%

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 three-year highs amid hawkish statements by 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: 1.2485
• Prev Close: 1.2543
• % chg. over the last day: +0.46%

The Canadian dollar is a commodity currency and is highly dependent on the movement of oil prices and the dollar index. Yesterday, the dollar index rose after FOMC minutes, while oil declined after US crude oil inventories unexpectedly increased by 2.4 million barrels last week. Falling oil prices put pressure on the Canadian currency, so USD/CAD quotes are growing amid the rising dollar index.

• Support levels: 1.2476, 1.2430
• Resistance levels: 1.2563, 1.2592, 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 1.2476, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2562 or 1.2476, but after an additional confirmation.

Alternative scenario: if the price breaks through and consolidates above 1.2592, the downtrend will likely be broken.