The Analytical Overview of the Main Currency Pairs on 2022.07.19

The EUR/USD currency pair

• Prev Open: 1.0082
• Prev Close: 1.0143
• % chg. over the last day: +0.61%

New inflation data will be released in Europe today. Experts believe that consumer prices will remain at 8.6% in annual terms. If the actual data proves to be better than expected, it may boost the European currency on waiting for a more aggressive interest rate hike by the ECB, which is due to meet this week on Thursday. If the data is equal to or below the forecasted level, the euro may lose momentum, and a new wave of sales will start.

• Support levels: 1.0106, 1.0035, 1.0000
• Resistance levels: 1.0221, 1.0284, 1.0365, 1.0415, 1.050

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The price rebounded from the psychological level of 1.00 and is trading between the moving averages, the MACD indicator became positive, and there is a slight buying pressure. Under such market conditions, sell deals can be considered from the resistance level of 1.0221, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.0106, but only with confirmation and short targets.

Alternative scenario: if the price breaks out through the 1.0221 resistance level and fixes above, the uptrend will likely resume.

• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
• – US Building Permits (m/m) at 15:30 (GMT+3);

The GBP/USD currency pair

• Prev Open: 1.1866
• Prev Close: 1.1949
• % chg. over the last day: +0.70%

A correction in the US dollar and investors’ appetite for risk supported the movement of the British pound. Investors are now preparing for a radical bill from the former finance minister and Conservative prime minister contender Rishi Sunak that will be released on Wednesday. It will give ministers a chance to evaluate regulatory decisions made by the Bank of England if they don’t like them. The head of the Bank of England will give a speech tonight, so traders need to watch for any hints from Bailey regarding a more aggressive rate hike at the next meeting. UK labor market data will also be released today, but analysts do not expect significant changes here.

• Support levels: 1.1908, 1.1803
• Resistance levels: 1.1987, 1.2024, 1.2065, 1.2137

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The situation is similar to the euro, but the pound looks more confident. Yesterday the price reached the priority change level, but the sellers did not allow the price to go higher. At the moment, the price is traded between the moving averages, the MACD indicator is in the positive zone, and the buyer’s pressure is still present. Under such market conditions, sell deals can be considered from the resistance level of 1.1987, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.1908, but only with confirmation and short targets.

Alternative scenario: if the price breaks out through the 1.2024 resistance level and fixes above, the uptrend will likely resume.

• – UK Average Earnings Index (m/m) at 09:00 (GMT+3);
• – UK Claimant Count Change (m/m) at 09:00 (GMT+3);
• – UK Unemployment Rate (m/m) at 09:00 (GMT+3);
• – UK BoE Gov Bailey Speaks at 20:45 (GMT+3);

The USD/JPY currency pair

• Prev Open: 138.54
• Prev Close: 138.12
• % chg. over the last day: -0.30%

There are no fundamental changes here at the moment. The Bank of Japan maintains a soft monetary policy, while the US Federal Reserve is on the path of aggressive interest rate hikes. Such a diametrically opposite policy has already pushed USD/JPY up to 24-year highs. And at least until the end of summer, the monetary policy of the Central Banks in Japan and the US will remain in place. Inflation data will be released in Japan at the end of this week, which could affect Japan’s Central Bank. But until then, the price will likely balance in a narrow range.

• Support levels: 137.70, 137.13, 136.48, 135.92, 135.40, 134.64, 134.11
• Resistance levels: 138.71, 140.29

From the technical point of view, the medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator has become inactive, the buyer’s pressure has decreased, and the price has corrected to the average values. Under such market conditions, it is best to look for buy deals within a day from the support level of 137.70, but with confirmation. A resistance level of 138.71 may be considered for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes below 137.13, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3016
• Prev Close: 1.2983
• % chg. over the last day: -0.25%

The Canadian dollar is a commodity currency dependent on the US Dollar Index and oil prices. Yesterday the US Dollar Index declined, and oil prices rose even higher and approached the level of $100 per barrel. This has given confidence to the Canadian currency. Canadian inflation data will be released this week, and analysts expect another jump in consumer prices. A strengthening of the national currency usually accompanies a rise in inflation on expectations that the central bank will be more aggressive in raising rates.

• Support levels: 1.2934, 1.2880, 1.2853
• Resistance levels: 1.3006, 1.3106, 1.3154

In terms of technical analysis, the trend on the USD/CAD currency pair is bullish. But yesterday, the price reached the priority change level but failed to consolidate lower. Buyers have defended their positions. Under such market conditions, it is best to look for buy trades on the lower time frames after the support level 1.2934, but with confirmation because the level has already been tested. For sell deals, it is best to consider the resistance level of 1.3006, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below the 1.2934 support level, the downtrend will likely resume.