The Analytical Overview of the Main Currency Pairs on 2022.09.16

The EUR/USD currency pair

• Prev Open: 0.9972
• Prev Close: 0.9994
• % chg. over the last day: +0.22 %

New Eurozone inflation data will be released today. Analysts forecast that the Consumer Price Index will not change and will remain at the same level. But there may be surprises in the form of a new round of price acceleration, so investors should keep a close eye on the report. Volatility in currency pairs with the euro will increase.

• 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. The price is trading in a narrow range, and a sharp impulse movement is expected. The MACD indicator has become inactive. Under such market conditions, it is best to look for buy deals on intraday time frames from the support level of 0.9912, but with confirmation. Sell trades can be considered from 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 Italian Consumer Price Index (m/m) at 12:00 (GMT+3);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1541
• Prev Close: 1.1462
• % chg. over the last day: -0.69 %

The pound is one of the major currencies with the worst performance in 2022 due to expectations of a prolonged recession, sustained high inflation, and political instability. New Prime Minister Liz Truss’s plans to finance a giant energy support package by increasing borrowing have heightened investor fears about the long-term prospects of the British economy. The Bank of England (BoE) will meet next week and is expected to raise interest rates by at least 50 basis points (bps), perhaps even 75 bps, as it looks to slow inflation. According to Refinitiv, money markets currently assume a 65% chance of a 75 basis point increase.

• Support levels: 1.1449, 1.1400
• Resistance levels: 1.1626, 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. But at the moment, the price is trading below the moving averages again, and the MACD indicator is in the negative zone, but there are signs of divergence. Buy trades can be considered from the support level of 1.1449, but only with confirmation. Sell trades are best to look for on intraday time frames, and the nearest resistance level is 1.1626 or 1.1693.

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

• – UK Retail Sales (m/m) at 09:00 (GMT+3).

The USD/JPY currency pair

• Prev Open: 143.11
• Prev Close: 143.46
• % chg. over the last day: +0.25 %

Koichi Hagiuda, executive director of Japan’s ruling party, calls for $209 billion to fight inflation and the weak yen. A senior Japanese ruling party official suggested Thursday that a stimulus package worth more than 30 trillion yen is needed to address inflationary pressures in Japan’s economy. Haguida’s remarks followed Prime Minister Fumio Kishida’s comments last week that the government would prepare a new economic package in October to soften the blow that rising prices are taking on households and businesses. The government has unveiled short-term stimulus measures that include financial support for low-income households, tax exemptions for residents, and an extension of gasoline subsidies and other measures through the end of the year.

• Support levels: 142.88, 141.77, 141.00, 139.61, 138.78, 137.65, 136.80, 135.20
• Resistance levels: 144.22, 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 sought on intraday time frames from the resistance level of 144.22 or 145.00, but only with additional confirmation since the USD/JPY is inclined to grow.

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

The USD/CAD currency pair

• Prev Open: 1.3167
• Prev Close: 1.3226
• % chg. over the last day: +0.45 %

The Canadian dollar has fallen to its lowest level against the US dollar since 2020. Despite falling more than 4% this year against its US counterpart, the Canadian dollar will remain one of the best-performing currencies in the world in 2022. The economy has been helped by higher commodity and energy prices as well as reduced COVID restrictions, with growth actually accelerating in the second quarter even as fears about the global economic crisis intensified.

• Support levels: 1.3220, 1.3053, 1.2990, 1.2958, 1.2936, 1.2900
• Resistance levels: 1.3326

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, and the MACD indicator is in the positive zone, but there are the first signs of divergence. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3220. For sell deals, it is better to consider the resistance level of 1.3326, 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.