The Analytical Overview of the Main Currency Pairs on 2022.04.21

The EUR/USD currency pair

• Prev Open: 1.0787
• Prev Close: 1.0853
• % chg. over the last day: +0.61%

Yesterday ECB officials said that the bond-buying program will be completed soon and the interest rate hike will depend on economic data. This is not the first time officials have said such a thing but they do not give any specific date or figure. This once again emphasizes the uncertainty of the ECB in terms of monetary policy. The producer price index, which shows inflation between factories, reached 30.9% in annual terms in Germany. It is a record figure that will undoubtedly affect consumer prices’ growth.

• Support levels: 1.0800, 1.0727, 1.0633
• Resistance levels: 1.0862, 1.0889, 1.0958, 1.1027, 1.1196, 1.1291

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The price has taken a more flat structure. The MACD indicator has become inactive. Under such market conditions, it is possible to look for buy trades on intraday timeframes from the support level of 1.0800, but only with short targets and confirmation. Sell trades should be considered from the resistance level 1.0889, but only after the additional confirmation.

Alternative scenario: if the price breaks out through the 1.0958 resistance level and fixes above, the uptrend will likely resume.

• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 20:00 (GMT+3);
• – US Fed Chair Powell Speaks at 20:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2995
• Prev Close: 1.3067
• % chg. over the last day: +0.55%

The situation in the debt market has stabilized a bit, thanks to which the British pound has slightly recovered its position against the dollar index. Despite the fact that the UK economy is showing some stability (compared to other European countries and the US), the discontent with Boris Johnson’s government policy is growing inside the country, which caused a steep rise in the prices of food, fuel, and utilities.

• Support levels: 1.3022, 1.2993
• Resistance levels: 1.3094, 1.3115, 1.3147, 1.3244, 1.3274

On the hourly time frame, the GBP/USD currency pair trend is still bearish. The MACD indicator has become inactive, the price pullback to the moving averages. Under such market conditions, sell trades should be looked for from the resistance level of 1.3094, but with confirmation. For buy deals, traders may consider the level of 1.3022, but only after the appearance of a bullish initiative and with short targets.

Alternative scenario: if the price breaks down through the 1.3147 resistance level and fixes above, the mid-term uptrend will likely be resumed.

• – UK BoE Gov Bailey Speaks at 19:30 (GMT+3).

The USD/JPY currency pair

• Prev Open: 128.86
• Prev Close: 127.87
• % chg. over the last day: -0.77%

The Bank of Japan entered the foreign exchange market and slightly strengthened the Japanese Yen yesterday. The central bank again offered to buy an unlimited amount of Japanese government bonds. The drop in the dollar against the yen also coincided with a decline in US Treasury yields. Nevertheless, the medium-term trend remains bullish as the central banks in Japan and the US now have opposite monetary policies.

• Support levels: 126.69, 125.72, 124.66, 124.24, 122.97, 122.63, 121.81
• Resistance levels: 128.84, 129.36

The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator has become inactive, but the divergence is still visible on the higher timeframes. Under such market conditions, it is best to look for buy deals, expecting the continuation of the uptrend, but after the price makes a pullback to the average lines. First of all, it is worth considering the support level of 126.69, but with additional confirmation. A resistance level of 128.84 may be considered for sell deals, but only with short targets.

Alternative scenario: If the price fixes below 124.66, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2614
• Prev Close: 1.2493
• % chg. over the last day: -0.96%

Canada’s consumer price index increased by 1.4% last month to 6.7% in annual terms. This is the highest value since January 1991. Prices rose on all major components. Analysts attributed the price increases to persistent price pressures in the Canadian housing market, significant supply constraints, and geopolitical conflict that has affected energy, commodities, and agricultural markets. The rise in inflation is usually accompanied by the strengthening of the national currency, as investors are laying the future scenario of raising interest rates to fight inflation.

• Support levels: 1.2467
• Resistance levels: 1.2567, 1.2600, 1.2644, 1.2713, 1.2754, 1.2851

The USD/CAD currency pair is bullish in terms of technical analysis. But the price has corrected deeply, to the priority change level. The MACD indicator has become negative, with no signs of reversal. It is worth tradingvonly with short targets because, fundamentally, there are no prerequisites for the medium-term trend on the USD/CAD currency pair. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2467, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2567, but it is also better with confirmation.

Alternative scenario: if the price breaks through and consolidates below 1.2467, the downtrend will likely be resumed.