The Analytical Overview of the Main Currency Pairs on 2022.06.07

The EUR/USD currency pair

• Prev Open: 1.0720
• Prev Close: 1.0695
• % chg. over the last day: -0.23%

An important meeting of the ECB will take place this Thursday, where analysts are waiting for the announcement of the end of the bond-buying program and a clear signal for a rate hike. Given the ECB’s conservatism, the central bank will gradually raise rates by 25 basis points. But the hawkish rhetoric has intensified in recent days, leading some economists to believe the ECB could start with an aggressive raise to cut inflation expectations faster. However, the probability of such a scenario is much lower as a 0.5% rate hike would hit Christine Lagarde’s credibility.

• Support levels: 1.0679, 1.0643, 1.0611, 1.0568, 1.0509, 1.0445, 1.0379
• Resistance levels: 1.0738, 1.0770, 1.0786, 1.0869

From a technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. The MACD indicator became negative, the price is trading below the moving averages. Under such market conditions, investors can look for buy trades on intraday time frames from the support level of 1.0679, but only with confirmation and short targets. Sell trades can be considered from the resistance level of 1.0737 or 1.0770, but only after the additional confirmation.

Alternative scenario: if the price breaks out through the 1.0611 support level and fixes below, the downtrend will likely resume.

The GBP/USD currency pair

• Prev Open: 1.2487
• Prev Close: 1.2529
• % chg. over the last day: +0.33%

Boris Johnson received a vote of confidence in the UK Parliament and retained his position as party leader and British Prime Minister for the next 12 months. There were 211 votes in favor and 148 against. The small gap demonstrates that many in the Conservative ranks are pushing for the Prime Minister’s departure, striking at his credibility. The British pound did not particularly react to this event. Given the increasing pressure on the British prime minister and his team, Boris Johnson needs to be more selective in his actions now.

• Support levels: 1.2498, 1.2433, 1.2398, 1.2283, 1.2199
• Resistance levels: 1.2577, 1.2628, 1.2669, 1.2698, 1.2770

The GBP/USD currency pair trend is bullish on the hourly time frame. The MACD indicator has become inactive, but sellers’ pressure remains. The price is trading below the levels of the moving averages. Under such market conditions, buy deals may be considered from the support level of 1.2498, but only with additional confirmation and short targets. Sell deals should be looked for from the resistance level of 1.2577, but with confirmation.

Alternative scenario: if the price breaks down through the 1.2433 support level and fixes below, the mid-term downtrend will likely resume.

• – UK Services PMI at 11:30 (GMT+3).

The USD/JPY currency pair

• Prev Open: 130.85
• Prev Close: 131.88
• % chg. over the last day: +0.78%

On Monday, Bank of Japan Governor Haruhiko Kuroda said that the Central Bank’s top priority is to support the economy, stressing an unwavering commitment to maintaining a “strong” monetary stimulus. The fundamental picture of the USD/JPY currency pair remains the same. The Fed is tightening monetary policy, while the Bank of Japan, on the contrary, holds a soft policy, and nothing will change soon. As a rule, monetary tightening leads to a strengthening of the national currency, while easing, on the contrary, leads to depreciation. As a result, the USD/JPY quotes tend to grow mid-term.

• Support levels: 132.00, 131.00, 130.12, 129.48, 128.76, 128.10, 127.64, 127.24, 127.04
• Resistance levels: 133.86

The medium-term trend on the USD/JPY currency is bullish. The price is steadily rising, and the MACD indicator is in the positive zone, but there are signs of overbought. It is best to wait for a slight correction, as the price has deviated strongly from the moving lines. Buy trades can be considered from the support level of 132.00, but with confirmation. A resistance level of 133.86 is good for sell deals, but only with additional confirmation in the form of a reverse initiative and short targets.

Alternative scenario: If the price fixes below 129.48, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2594
• Prev Close: 1.2578
• % chg. over the last day: -0.13%

The Canadian dollar is a commodity currency, so it depends not only on the dollar index but also on the oil price movements. Both the dollar index and oil prices increased yesterday. The fundamental picture is now favorable to strengthening both the US dollar and the Canadian dollar, so investors should not expect any medium-term trend movement here.

• Support levels: 1.2558, 1.2510
• Resistance levels: 1.2623, 1.2676, 1.2728, 1.2765, 1.2807, 1.2893, 1.2953, 1.3000

The USD/CAD currency pair is bearish in terms of technical analysis. The MACD indicator has become positive, selling pressure has decreased, and divergence is observed on several time frames. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2558, but it is better to wait for the bullish initiative. For sell deals, it is better to consider the resistance level of 1.2623, but also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates above 1.2728, the uptrend will likely resume.

• – Canada Ivey PMI at 17:00 (GMT+3).