The Analytical Overview of the Main Currency Pairs on 2022.06.28

The EUR/USD currency pair

• Prev Open: 1.0546
• Prev Close: 1.0581
• % chg. over the last day: +0.33%

Durable Goods Orders in the US unexpectedly rose by 0.7% in May, while analysts had expected no change. At the same time, the US pending home sales overcame a six-month slump and showed a slight gain. As softening inflation expectations prompted a reassessment of the prospects for aggressive interest rate hikes, the dollar index declined, allowing the euro to rise slightly. Futures pricing indicates that traders now expect the US Federal Reserve’s benchmark interest rate to stabilize at around 3.5% (the previous forecast was 4% in 2023).

• Support levels: 1.0573, 1.0408, 1.0379
• Resistance levels: 1.0611, 1.0680, 1.0723

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The price still forms a wide corridor, and the MACD indicator has become inactive, but there is divergence towards sales. Under such market conditions, sell deals can be considered from the resistance level of 1.0611, but only after the additional confirmation. A price move above 1.0611 will change the priority. Buy trades are best to look for on intraday time frames from the support level of 1.0573 or the lower border of the flat, but only with confirmation and short targets.

Alternative scenario: if the price breaks out through the 1.0611 resistance level and fixes above, the uptrend will likely resume.

• – US FOMC Member Williams Speaks (m/m) at 01:30 (GMT+3);
• – ECB President Lagarde Speaks at 11:00 (GMT+3);
• – US CB Consumer Confidence (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2263
• Prev Close: 1.2266
• % chg. over the last day: +0.02%

UK household inflation expectations decreased to their lowest level since January, which is good news for Bank of England officials who fear increased price pressures. Despite that, inflation expectations are still elevated. Financial markets show a roughly 73% chance that the Bank of England will raise the bank rate to 1.75% from 1.25% at the next policy meeting on August 4.

• Support levels: 1.2238, 1.2093, 1.1974
• Resistance levels: 1.2324, 1.2422, 1.2470, 1.2523, 1.2629

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The situation is very similar to the euro. The price forms a wide corridor, while the MACD indicator shows no activity, but there is a slight divergence. Under such market conditions, sell deals can be considered from the resistance level of 1.2422 or the upper border of the flat, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.2238 or the lower border of the flat, but only with confirmation and short targets.

Alternative scenario: if the price breaks out through the 1.2422 resistance level and fixes above, the uptrend will likely resume.

The USD/JPY currency pair

• Prev Open: 135.11
• Prev Close: 135.47
• % chg. over the last day: +0.27%

The yield differential between Japanese Government Bonds and US Treasuries still keeps the JPY low. However, the Bank of Japan holds its monetary policy soft as policymakers attribute rising inflation to rising energy and commodity prices. More and more analysts are starting to believe that at some point, the Bank of Japan will make currency intervention, as the yen’s weakness is taking a heavy toll on the Japanese economy. Both BOJ Governor Kuroda and Prime Ministerof Japan Kishida acknowledge this point.

• Support levels: 134.84, 133.35, 131.67, 131.00, 130.12, 129.48, 128.76
• Resistance levels: 135.88, 136.66

The medium-term trend on the USD/JPY currency pair is bullish. The price trades near the moving average lines and forms a wide price balance. The MACD indicator has become inactive. Under such market conditions, buy trades can be considered from the support level of 134.84 or 133.35, but with confirmation. A resistance level of 135.88 is good for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes below 133.35, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2889
• Prev Close: 1.2873
• % chg. over the last day: -0.12%

The Canadian dollar is a commodity currency, so it depends not only on the US Dollar Index but also on oil prices. The dollar index declined yesterday, while oil prices grew during the last three trading sessions. As a result, the Canadian dollar has strengthened. It should be noted that the Bank of Canada is on its way to raising interest rates and the latest inflation data showed that inflation in Canada has not stopped rising. Therefore, on expectations of an aggressive rate hike at the next meeting, the Canadian dollar may continue its upward momentum in the coming days.

• Support levels: 1.2815, 1.2709, 1.2618, 1.2578, 1.2510
• Resistance levels: 1.2887, 1.2956, 1.3068

In terms of technical analysis, the trend on the USD/CAD currency pair is bullish. But the MACD indicator became negative, and the price is trading below the moving averages. Buyers are losing the initiative. A price move below 1.2815 will change the priority. Under such market conditions, it is better to look for buy deals in the lower time frames from the support level of 1.2815. For sell deals, it is better to consider the resistance level of 1.2956, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below the 1.2815 support level, the downtrend will likely resume.