The Analytical Overview of the Main Currency Pairs on 2022.09.15

The EUR/USD currency pair

• Prev Open: 0.9965
• Prev Close: 0.9979
• % chg. over the last day: +0.14 %

Industrial production in the Eurozone has decreased by 2.3% over the last month. These statistics clearly indicate that the region’s economy is struggling. ECB Governing Council spokesman Francois Villeroy de Galhau said Wednesday that interest rates in the Eurozone could reach 2% by year’s end. Another Governing Council representative, Gediminas Simkus, head of Lithuania’s Central Bank, said the Central Bank should raise interest rates by at least half a point at its October meeting. ECB President Philip R. Lane indicated yesterday that, based on current estimates, the ECB should stick with further interest rate hikes over the next few meetings. The new projections call for inflation to average 8.1% in 2022, 5.5% in 2023, and 2.3% in 2024

• Support levels: 0.9971, 0.9912
• Resistance levels: 1.0111, 1.0162, 1.0230

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. But the price formed a false breakout zone above the level of 1.0111 and returned to the wide range. The MACD indicator became negative, and the sellers’ pressure intensified. Under such market conditions, it is best to look for buy trades on intraday time frames from the support level of 0.9972 or 0.9912, but with confirmation. Sell trades can be considered from the resistance levels of 1.0111 or 1.0162.

Alternative scenario: if the price breaks down through the support level of 0.9912 and fixes below, the downtrend will likely resume.

• – Eurozone French Consumer Price Index (m/m) at 09:45 (GMT+3);
• – US Retail Sales (m/m) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+3);
• – US Industrial Production (m/m) at 16:15 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1491
• Prev Close: 1.1538
• % chg. over the last day: +0.41 %

The annual UK inflation rate unexpectedly fell to 9.9% due to lower fuel prices. But food prices rose as the country’s cost of living crisis continued. On a month-to-month basis, consumer prices increased by 0.5%, slightly below forecasts. Core inflation, which excludes energy, food, alcohol, and tobacco, rose by 0.8% month-over-month and to 6.3% year-over-year, in line with expectations. The Bank of England is set to announce its final monetary policy decision of the year next Thursday and is expected to choose a sharp 75 basis point interest rate hike as it helps slow inflation.

• Support levels: 1.1503, 1.1449, 1.1400
• Resistance levels: 1.1627, 1.1693, 1.1816, 1.1901, 1.1994, 1.2035, 1.2167

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame is bullish. At the moment, the price is trading below the moving averages again, and the MACD indicator is in the negative zone. Buy trades can be considered from the support level of 1.1503 or 1.1449, but only with confirmation. Sell trades are best to look for on intraday time frames, and the nearest resistance level is 1.1627 and 1.1693.

Alternative scenario: if the price breaks down the support level of 1.1449 and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 144.54
• Prev Close: 143.16
• % chg. over the last day: -0.96 %

The Nikkei newspaper reported on Wednesday that the Bank of Japan conducted an interest rate check-in in apparent preparation for currency intervention, as policymakers stepped up warnings of a sharp drop in the yen. The Central Bank probably considers the recent changes in the yen’s exchange rate to be too extensive. Japanese Finance Minister Shunichi Suzuki also said that the yen’s recent moves have been “swift and one-sided,” which could prompt the government to back the currency. So far, this is all at the level of rumor and talk, which may help slow the yen’s depreciation, but is unlikely to change the trend unless dollar and UST yields fall precipitously or the Bank of Japan changes its policy.

• Support levels: 142.88, 141.77, 141.00, 139.61, 138.78, 137.65, 136.80, 135.20
• Resistance levels: 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 142.88, but with additional confirmation. Sell deals can be considered on the intraday time frames from the level of 145.00, but only with additional confirmation, as fundamentally, USD/JPY quotes are inclined to growth.

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

The USD/CAD currency pair

• Prev Open: 1.3150
• Prev Close: 1.3165
• % chg. over the last day: +0.11 %

Canada’s Central Bank is holding interest rates at 3.25%, and it’s 0.75% higher than the US Fed. The US Central Bank is planning another 0.75% rate hike next week, which will flatten rates between the US and Canadian banks again. Thus, the imbalance in pricing will come mainly from oil prices alone since the Canadian dollar is a commodity currency. The growth of oil prices will contribute to the strengthening of the Canadian currency.

• Support levels: 1.3053, 1.2990, 1.2958, 1.2936, 1.2900
• Resistance levels: 1.3220

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is trading above the moving averages, the MACD indicator is in the positive zone, and a narrow flat is forming. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3053 after the pullback. The best way to sell is to consider the resistance level of 1.3220, but only after an additional confirmation in the form of a false breakout.

Alternative scenario: if the price breaks down and consolidates below the 1.2990 support level, the downtrend will likely resume.