The Analytical Overview of the Main Currency Pairs on 2022.04.29

The EUR/USD currency pair

• Prev Open: 1.0559
• Prev Close: 1.0497
• % chg. over the last day: -0.59%

In April, the annual inflation rate in Germany reached a record high of 7.8%. In contrast, Spain’s annual inflation rate fell from 9.8% to 8.4%, indicating that the Spanish economy is not as tied to Russia’s energy resources as the German economy. Several other European countries will report inflation today, and the overall figure for the Eurozone will be published. Analysts expect annual inflation in the Eurozone to be 7.5% (currently 7.4%). If the CPI turns out worse than expected, the euro could rise sharply amid expectations of faster monetary policy tightening by the ECB.

• Support levels: 1.0453
• Resistance levels: 1.0580, 1.0633, 1.0770, 1.0796, 1.0870, 1.0908, 1.0936

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. Growth in the dollar index led to the fall of the European currency. The MACD indicator is in the negative zone, selling pressure remains, but the divergence is increasing. Under such market conditions, traders can look for sell deals from the resistance levels of 1.0580 or 1.0633, but only after the additional confirmation. Buy trades can be considered on intraday timeframes from the support level of 1.0453, but only with short targets and confirmation.

Alternative scenario: if the price breaks out through the 1.0770 resistance level and fixes above, the uptrend will likely resume.

• – Eurozone French Consumer Price Index (m/m) at 09:45 (GMT+2);
• – Eurozone German GDP (q/q) at 11:00 (GMT+2);
• – Eurozone Italian Consumer Price Index (m/m) at 12:0  (GMT+2);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+2);
• – Eurozone GDP (q/q) at 12:00 (GMT+2);
• – US PCE price index (m/m) at 15:30 (GMT+2);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.2543
• Prev Close: 1.2453
• % chg. over the last day: -0.72%

The widening interest rate differential between the US and other countries, the risks of a global recession, and war in Ukraine are strengthening confidence in the dollar. In turn, the UK economy is going into “stagflation” (lower economic growth with high inflation). All of this leads to the fall of the British pound against the dollar.

• Support levels: 1.2438
• Resistance levels: 1.2670, 1.2791, 1.2862, 1.2917, 1.2981, 1.3010, 1.3083, 1.3115

On the hourly time frame, the GBP/USD currency pair trend is still bearish. The MACD indicator is in the negative zone, selling pressure remains, but the divergence is increasing. The price has reached the daily support level. Under such market conditions, sell trades should be looked for from the resistance level of 1.2670, but with confirmation. For buy deals, traders may consider the level of 1.2438, but only after the appearance of a bullish initiative and with short targets.

Alternative scenario: if the price breaks down through the 1.2863 resistance level and fixes above, the mid-term uptrend will likely be resumed.

The USD/JPY currency pair

• Prev Open: 128.41
• Prev Close: 130.83
• % chg. over the last day: +1.88%

The Japanese yen fell below 130 per dollar for the first time in 20 years as the Bank of Japan doubled its bond-buying rate. On Thursday, the Bank of Japan decided to keep monetary policy unchanged despite a weaker yen and rising inflationary pressures due to higher import costs. This contributes to another round of weakening of the Japanese yen. It’s a bank holiday in Japan today.

• Support levels: 129.10, 128.51, 127.24, 126.91, 125.48, 124.66, 122.97
• Resistance levels: 130.85

The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator is positive again, and the buying pressure has increased. Under such market conditions, it is best to look for buy deals, expecting the continuation of the uptrend, but only after a pullback, as the price has strongly deviated from the average values. First of all, it is worth considering the support level of 129.10 or 128.51, but with additional confirmation. A resistance level of 130.85 may be considered for sell deals, but only with short targets.

Alternative scenario: If the price fixes below 126.91, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2818
• Prev Close: 1.2806
• % chg. over the last day: -0.09%

On Thursday, Canada’s most populous province of Ontario projected a steady decline in the deficit in the medium term due to a strong economic recovery and predicted a return to surplus by 2027-2028. This is a good sign for the Canadian currency. But it should be noted that the Canadian dollar is a commodity currency and also strongly dependent on the dynamics of oil prices and the dollar index. The dollar index is rising along with oil prices. As a result, the USD/CAD currency pair is trading without significant changes. Currently, the USD/CAD has no fundamental prerequisites for a medium-term trend as rising oil prices, along with the Bank of Canada’s plans to raise interest rates, will strengthen the Canadian dollar.

• Support levels: 1.2745, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.2852

The USD/CAD currency pair is bullish in terms of technical analysis. The MACD indicator became negative, and the price began to correct to the average values. Trade is worth it only with short targets. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2745 or 1.2644, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2852, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below 1.2607, the downtrend will likely be resumed.

• – Canada GDP (m/m) at 15:30 (GMT+2).