The Analytical Overview of the Main Currency Pairs on 2022.09.12

The EUR/USD currency pair

• Prev Open: 0.9993
• Prev Close: 1.0036
• % chg. over the last day: +0.43 %

According to Bundesbank President Joachim Nagel, the European Central Bank will have to keep raising interest rates if the current trend in Сonsumer Prices continues. The ECB tightened policy by a historic 75 basis points last week. Officials are poised to announce another major interest rate hike at its October meeting if inflation data shows signs of growth later this week. Although there are now some signs that the economy could stagnate or even contract in the second half of 2022 and that this trend could continue into next year, Nagel said any recession could be shallow.

• Support levels: 1.0016, 0.9971, 0.9912
• Resistance levels: 1.0111, 1.0150

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish, but the price is trading at the priority change level, and the probability of a trend change is very high. Technically, the price is still trading in a wide balance with a range of 0.9912-1.0111. The MACD indicator became positive, and there is buying pressure. Under such market conditions, buy trades are best sought on intraday time frames from the support level of 1.0016 or 0.9971. Sell trades can be considered from the resistance levels of 1.0111, but only after an additional confirmation in the form of a false breakout of the level and reverse initiative.

Alternative scenario: if the price breaks out of the 1.0111 resistance level and fixes above, the uptrend will likely resume.

The GBP/USD currency pair

• Prev Open: 1.1497
• Prev Close: 1.1587
• % chg. over the last day: +0.78 %

This week the UK will publish a lot of economic data. Today traders should pay attention to GDP data. At the same time, the Bank of England postponed the interest rate decision due to the death of the Queen of Great Britain. The Central Bank said that its Monetary Policy Committee (MPC) would hold its next meeting on Thursday, a week later than planned, as Britain is observing a period of national mourning.

• Support levels: 1.1516, 1.1449, 1.1400
• Resistance levels: 1.1669, 1.1816, 1.1901, 1.1994, 1.2035, 1.2167

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. At the moment, the price is trading at the level of moving averages, and the MACD indicator is positive again. It is best to look for sell trades on intraday time frames, and the nearest resistance level is 1.1669. Buy trades can be considered from the support level of 1.1516, but only with confirmation.

Alternative scenario: if the price breaks out through the 1.1669 resistance level and fixes above, the uptrend will likely resume.

• – UK GDP (q/q) at 09:00 (GMT+3);
• – UK Industrial Production (m/m) at 09:00 (GMT+3);
• – UK Manufacturing Production (m/m) at 09:00 (GMT+3).

The USD/JPY currency pair

• Prev Open: 144.09
• Prev Close: 142.55
• % chg. over the last day: -1.08 %

The Japanese yen is trading at a 24-year low against the US dollar. The Japanese government must take the necessary measures to counter the excessive yen decline, a senior government official said Sunday. These are signs of deep concern on the part of the authorities. The government is considering lifting Japan’s visitor restrictions by October. This would help boost demand for the Japanese currency.

• Support levels: 141.77, 141.00, 139.61, 138.78, 137.65, 136.80, 135.20
• Resistance levels: 144.05, 145.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading at the level of moving averages. The MACD indicator has become inactive. Under such market conditions, buy trades can be sought from the support level of 141.77 or 141.00, but with additional confirmation. Sell positions can be searched for on the intraday time frames from the level of 144.05, but only with an additional confirmation because, fundamentally, USD/JPY quotes are inclined to grow.

Alternative scenario: If the price fixes below 141.00, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3092
• Prev Close: 1.3020
• % chg. over the last day: -0.55 %

The Canadian dollar strengthened on Friday despite a significant change in labor market dynamics. Canada reported a 39,700 job loss in August, reinforcing economists’ expectations of a recession and a slowdown in the pace of interest rate hikes by the Bank of Canada. Even with the Bank of Canada’s (BoC) earlier 75 bps interest rate hike, the narrative is shifting in favor of the US dollar, which remains supported by an aggressive Federal Reserve, a strong economy, and demand for safe-haven assets as recession fears grow. In the oil market, crude oil could face significant downward pressure as lower demand gathers momentum, which could cause the Canadian dollar to plummet.

• Support levels: 1.2990, 1.2958, 1.2936, 1.2900
• Resistance levels: 1.3108, 1.3220

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is now trading below the moving averages, the MACD indicator has become negative, and there is slight seller pressure. Under such market conditions, buy trades should be considered on the lower time frames from the support level 1.2990 or 1.2936, but only with confirmation. For sell deals, it is best to consider the resistance level of 1.3108, but only after the additional confirmation.

Alternative scenario: if the price breaks down and consolidates below the 1.3020 support level, the downtrend will likely resume.