The Analytical Overview of the Main Currency Pairs on 2022.10.04

The EUR/USD currency pair

• Prev Open: 0.9788
• Prev Close: 0.9823
• % chg. over the last day: +0.36 %

The index of business activity in the manufacturing sector in Europe continues to decline. The most significant drop is in Germany (48.3→47.8), Spain (49.9→49.0), and France (47.8→47.7). Italy has a small gain (48.0→48.3), but the Eurozone Manufacturing PMI Index has fallen from 48.5 to 48.4. A value below 50 for the third consecutive month indicates that the Eurozone economy is, de facto, already in recession. The main problem for the Eurozone is still high inflation combined with rising energy and gas prices, which forces companies to economize and cut production.

• Support levels: 0.9748, 0.9666, 0.9601.
• Resistance levels: 0.9863, 0.9951, 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 bearish, but the price has approached the priority change level. The MACD indicator is positive, but the buyers’ pressure is weakening. It is best to look for sell deals from the resistance level of 0.9863. Buy trades can be considered from the support level of 0.9666 or 0.9601, but only with confirmation.

Alternative scenario: if the price breaks out through the resistance level of 0.9863 and fixes above it, the uptrend will likely resume.

• – US FOMC Member Williams Speaks (m/m) at 16:00 (GMT+3);
• – US FOMC Member Mester Speaks (m/m) at 16:15 (GMT+3);
• – US JOLTs Job Openings (m/m) at 17:00 (GMT+3);
• – Eurozone ECB President Lagarde Speaks (m/m) at 18:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1155
• Prev Close: 1.1321
• % chg. over the last day: +1.49 %

British Prime Minister Liz Truss unexpectedly canceled plans to cut the maximum income tax rate after a negative reaction from the public and the International Monetary Fund. Analysts believe this is a serious and humiliating situation for the new Prime Minister Liz Truss, who had insisted on the contrary on Sunday. On the other hand, the British pound hardly reacted to this news and continued its rally.

• Support levels: 1.1121, 1.0915, 1.0816, 1.0711, 1.03
• Resistance levels: 1.1311, 1.1449, 1.1626, 1.1693, 1.1816, 1.1901

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. But the price is close to the priority change level. The MACD indicator remains positive, but the divergence is present. Under such market conditions, looking for sell deals on intraday time frames is better. The nearest resistance level is 1.1311, which is the priority change level. Buy trades can be considered from the support level of 1.0915 or 1.0816, but only with confirmation and short targets

Alternative scenario: if the price breaks out of the 1.1311 resistance level and fixes above it, the uptrend will likely resume.

The USD/JPY currency pair

• Prev Open: 144.65
• Prev Close: 144.55
• % chg. over the last day: -0.07 %

Japanese Finance Minister Shunichi Suzuki said that Japan is ready for “decisive” steps in the currency market if excessive yen movements persist. At the moment, the ministry is holding the price ceiling of USD/JPY at 145. On the other hand, the yen is weakening due to Japan’s policy of keeping interest rates low while they are rising elsewhere. As a result, USD/JPY quotes are trading in balance without any significant advances.

• Support levels: 144.19, 143.00, 140.60, 139.61, 138.78, 137.65, 136.80, 135.20
• Resistance levels: 145.35

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The MACD indicator has become inactive, the price is trading at the level of the moving averages, and the balance is being formed. Under such market conditions, buy trades can be sought in the intraday time frames from the support level of 144.19, but with confirmation, since the level has already been tested. Sell deals can be searched from the resistance level of 145.35, but only with additional confirmation.

Alternative scenario: If the price fixes below 140.60, the downtrend will likely resume.

• – Japan Tokyo Core CP (m/m) at 02:30 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.3815
• Prev Close: 1.3622
• % chg. over the last day: -1.42 %

Canada’s Manufacturing PMI Index showed a sharp increase over the previous month. The PMI rose from 48.7 to 49.8, indicating that the Canadian economy is close to a recovery. But there were a few negatives as well. The PMI report indicated that demand had been hit hard by rising interest rates. Companies have become less optimistic about their production expectations for the year ahead. Overall, the Canadian economy is probably one of the strongest in the world right now, despite rising global inflation and high-interest rates.

• Support levels: 1.3545, 1.3453, 1.3297, 1.3212, 1.3053, 1.2990, 1.2958
• Resistance levels: 1.3858, 1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The MACD indicator became negative, and the price is trading below the moving lines. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3545, but with confirmation. For selling, it is better to consider the resistance level of 1.3756, but only after the additional confirmation.

Alternative scenario: if the price breaks down and consolidates below the 1.3545 support level, the downtrend will likely resume.