The Analytical Overview of the Main Currency Pairs on 2022.07.28

The EUR/USD currency pair

• Prev Open: 1.0114
• Prev Close: 1.0198
• % chg. over the last day: +0.83%

The US central bank raised rates by three-quarters of a percentage point for the second session in a row to rein in record inflation but noted that while the labor market remains strong, other economic indicators have deteriorated. According to the Fed gov, there are no signs of a recession at this time. At the press conference, Fed Chairman Jerome Powell supported the idea that the central bank will hold another rate hike in September, although he said that a slower pace of increases might be needed. According to the CME FedWatch Tool, expectations for a 50 basis point hike at the September Fed meeting rose to 60.9%, up from 50.7% the day before.

• Support levels: 1.0170, 1.0142, 1.0035, 1.0000
• Resistance levels: 1.0202, 1.0250, 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 bullish. The price is still forming a wide volatile balance, and buyer pressure prevails now. The MACD indicator has become positive. Under such market conditions, buy trades are best sought on intraday time frames from the support level of 1.0170 or 1.0142. Sell trades can be considered from the resistance level of 1.0202, only after additional confirmation and with short targets.

Alternative scenario: if the price breaks down through the 1.0035 support level and fixes below, the downtrend will likely resume.

• – US GDP (q/q) at 15:30 (GMT+3);
• – US Treasury Sec Yellen Speaks at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2016
• Prev Close: 1.2155
• % chg. over the last day: +1.16%

The British pound rose sharply yesterday as the dollar fell after the FOMC meeting. But traders should remember that the interest rate of the central bank of England is now at 1.25%, while the US Federal Reserve’s interest rate is 2.5%, which is twice as much. Such differences can’t pass in vain for the British currency, so analysts expect a decline in GBP/USD quotes in the coming weeks.

• Support levels: 1.2089, 1.2063, 1.1907, 1.1803
• Resistance levels: 1.2238, 1.2294

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. Buyer pressure remains. The MACD indicator is in the positive zone but shows signs of divergence already in several time frames. Under such market conditions, it is better to look for buy trades on the intraday time frames from the support level 1.2089 or 1.2063, but only with confirmation. Sell trades can be considered from the resistance level of 1.2238, but only after additional confirmation and with short targets.

Alternative scenario: if the price breaks down through the 1.1907 support level and fixes below, the downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 136.89
• Prev Close: 136.60
• % chg. over the last day: -0.22%

Despite the decline in the US Dollar Index yesterday, analysts are still confident in a further rise in USD/JPY quotes as the US and Japanese central banks are moving in different directions. The US Fed is planning another rate hike in September, while the Japanese bank does not intend to tighten its policy until the end of the year.

• Support levels: 134.64, 134.11
• Resistance levels: 135.88, 136.62, 137.11, 138.25

From the technical point of view, the medium-term trend on the USD/JPY currency pair is bearish. But it should be noted that the fall in the USD/JPY quotes is not accompanied by any fundamental factors, so traders should be careful. The MACD indicator has become negative, and the sellers’ pressure is still there, but there are signs of divergence. Under such market conditions, buy trades can be sought intraday from the lower boundary of the descending channel or the support level of 134.64, but with additional confirmation. Resistance levels of 135.88 or 136.62 may be considered for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes above 138.25, the uptrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2886
• Prev Close: 1.2822
• % chg. over the last day: -0.50%

When the US Dollar Index is falling, and oil prices are rising, it is a green light for the Canadian currency because the Canadian is a commodity currency and is directly dependent on these indicators. Now the interest rates of the central banks of the USA and Canada are at the same level, so the price will keep a certain balance without significant trends.

• Support levels: 1.2781
• Resistance levels: 1.2880, 1.2923, 1.3006, 1.3085, 1.3154

In terms of technical analysis, the trend on the USD/CAD currency pair is bearish. Currently, the price is forming a wide balance and trading on the lower border of the descending channel. The MACD indicator is negative again, but there is a divergence, which indicates that it is harder for the price to move lower. Under such market conditions, it is better to consider sell deals from the resistance level of 1.2880, but with confirmation. Buy trades should be considered on the lower time frames from the support level of 1.2781 or the lower border of the channel, but only with confirmation and short targets.

Alternative scenario: if the price breaks out and consolidates above the 1.3006 resistance level, the uptrend will likely resume.