The Analytical Overview of the Main Currency Pairs on 2022.05.05

The EUR/USD currency pair

• Prev Open: 1.0519
• Prev Close: 1.0620
• % chg. over the last day: +0.96%

As policymakers tried to quell record inflation, the Fed’s 50 basis point hike was the largest since 2000. But Chairman Jerome Powell told reporters at a press conference that Fed members are not considering an active 75 basis point hike in the future. The euro jumped almost 1% on this news.

• Support levels: 1.0564, 1.0453
• Resistance levels: 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 still bearish. But there are first signs of bullish pressure. The MACD indicator has become positive. 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 1.0564, 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.

• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2496
• Prev Close: 1.2635
• % chg. over the last day: +1.11%

Today, the Bank of England is almost 100% likely to raise the key rate by 25 basis points (0.25%) to 1%, the highest rate level in 13 years and a threshold at which active quantitative tightening can begin. It is important to look closely at changes in gross domestic product forecasts and the consumer price index. GDP is likely to fall sharply in 2022, and inflation is expected to be revised upward. The pound may rise again if forecasts are more optimistic.

• Support levels: 1.2530, 1.2438
• Resistance levels: 1.2602, 1.2695, 1.2792, 1.2981, 1.3010, 1.3114

On the hourly time frame, the GBP/USD currency pair trend is still bearish. Yesterday, the British pound jumped amid the Fed news but reached the resistance level. The MACD indicator became positive, but the buying pressure decreased. Under such market conditions, sell trades should be looked for from the resistance level of 1.2602 intraday. For buy deals, traders may consider the level of 1.2530, 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 Services PMI (m/m) at 11:30 (GMT+3);
• – UK BoE Inflation Report (m/m) at 14:00 (GMT+3);
• – UK BoE Interest Rate Decision (m/m) at 14:00 (GMT+3);
• – UK BoE Monetary Policy Statement (m/m) at 14:00 (GMT+3).

The USD/JPY currency pair

• Prev Open: 130.10
• Prev Close: 129.04
• % chg. over the last day: -0.82%

The Japanese market is closed today. Therefore, currency pairs with the yen are now completely dependent on the movement of major currencies. Yesterday, the dollar index fell sharply after the Fed meeting, which led to a decline in the USD/JPY. However, it should be noted that the monetary policy of the US and Japanese central banks is still at different poles, which will contribute to the USD/JPY quotes growth in the mid-term perspective.

• Support levels: 128.89, 128.55, 127.29, 126.91, 126.00, 125.57
• Resistance levels: 129.78, 130.80

The medium-term trend on the USD/JPY currency pair is still bullish. The MACD indicator has become negative. The price has corrected to the nearest support levels. 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 128.89 or 128.55, but with additional confirmation. A resistance level of 129.78 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: 1.2842
• Prev Close: 1.2736
• % chg. over the last day: -0.83%

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 dollar index fell sharply after the Fed meeting yesterday, while oil prices jumped more than 5%, as at today’s OPEC+ meeting, producer countries will not increase oil production. As a result, the Canadian dollar strengthened sharply yesterday.

• Support levels: 1.2693, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.2802, 1.2908

The USD/CAD currency pair is bullish in terms of technical analysis. The MACD indicator has become negative, and the selling pressure has increased. Trade is worth it only with short targets because, fundamentally, both the dollar index and the Canadian dollar are inclined to grow. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2693 or 1.2644, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2802, 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.

• – OPEC+ Meeting at 12:00 (GMT+3).