The Analytical Overview of the Main Currency Pairs on 2022.05.03

The EUR/USD currency pair

• Prev Open: 1.0560
• Prev Close: 1.0507
• % chg. over the last day: -0.50%

In April, the US Manufacturing PMI index slowed to its lowest level since September 2020 due to further supply chain problems following recent restrictions in China. The US economy is slowly slipping into recession, and the Fed has not even begun to raise interest rates aggressively yet.

• Support levels: 1.0453
• Resistance levels: 1.0584, 1.0633, 1.0723, 1.0766, 1.0799, 1.0869, 1.0955

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The price reached the support level and is trading flat now. The MACD indicator has become inactive, but the divergence is increasing. Under such market conditions, traders can look for sell deals from the resistance level of 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.

• – German Unemployment Rate (m/m) at 10:55 (GMT+3);
• – Eurozone Producer Price Index (m/m) at 12:00 (GMT+3);
• – Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
• – US JOLTs Job Openings (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2571
• Prev Close: 1.2491
• % chg. over the last day: -0.64%

The UK retail sales index showed a significant decline last week. Retailers also expect sales to decline in May. Economic surveys point to concerns about the outlook for consumer spending and the economy as a whole. This Thursday, the Bank of England will hold a meeting on monetary policy, which is likely to decide on a further increase in interest rates by 0.25%.

• Support levels: 1.2486, 1.2438
• Resistance levels: 1.2695, 1.2792, 1.2981, 1.3010, 1.3114

On the hourly time frame, the GBP/USD currency pair trend is still bearish. The price reached the support level and is trading flat now. The MACD indicator has become inactive. Under such market conditions, sell trades should be looked for from the resistance level of 1.2695 but confirmed. For buy deals, traders may consider the level of 1.2486, but only with short targets.

Alternative scenario: if the price breaks down through the 1.2792 resistance level and fixes above, the mid-term uptrend will likely be resumed.

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

The USD/JPY currency pair

• Prev Open: 129.73
• Prev Close: 130.18
• % chg. over the last day: +0.34%

Japan has a long weekend until Friday. Thus, currency pairs with the yen will be fully dependent on the movement of major currencies. The fundamental picture for JPY remains the same. The Bank of Japan pursues an ultra-soft monetary policy that negatively affects the national yen rate.

• Support levels: 129.10, 128.55, 127.29, 126.91, 126.00, 125.57
• Resistance levels: 130.80

The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator has become inactive, and the buyers’ pressure has decreased. Volatility decreased on the eve of the holidays. 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 128.55, but with additional confirmation. A resistance level of 130.80 may be considered for sell deals, but only with short targets.

Alternative scenario: If the price fixes below 127.29, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2838
• Prev Close: 1.2877
• % chg. over the last day: +0.30%

The Canadian dollar is a commodity currency and depends not only on the monetary policy of the Bank of Canada but also on the dollar index and on the prices of energy commodities, such as oil. The fundamental picture for the Canadian dollar is very vague. On the one hand, the Bank of Canada will also raise interest rates, which is positive for the Canadian dollar. Rising oil prices are also positive for the Canadian dollar. On the other hand, tighter monetary policy from the Fed contributes to the growth of the dollar index. As a result, the USD/CAD currency pair has no clear trend and trades in wide volatile corridors.

• Support levels: 1.2824, 1.2750, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.2908

The USD/CAD currency pair is bullish in terms of technical analysis. The MACD indicator has become inactive, but the divergence has increased. 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 1.2750, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2908, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below 1.2644, the downtrend will likely be resumed.