The Analytical Overview of the Main Currency Pairs on 2022.10.25

The EUR/USD currency pair

• Prev Open: 0.9871
• Prev Close: 0.9873
• % chg. over the last day: +0.02 %

The EU manufacturing activity index indicates a further slowdown. In Germany and the Eurozone as a whole, indicators have reached new lows. Moreover, the slowdown can be seen in both the industrial and service sectors. And in the near term, forecasts are also pointing to a decline as the ECB is planning aggressive rate hikes in the next two meetings, which will undoubtedly have a negative impact on economic growth. On the other hand, if the difference between the interest rates of the ECB and the US Fed starts to narrow, the European currency will rise above parity.

• Support levels: 0.9817, 0.9755, 0.9601
• Resistance levels: 0.9961, 1.0058, 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 above the moving averages. The MACD indicator is in the positive zone, but there is a divergence, indicating the buyers’ weakness. Under such market conditions, buy trades should be considered from the support level 0.9817 or 0.9755, but with additional confirmation in the form of reverse initiative. Sell deals can be considered from the resistance level of 0.9961, but also with confirmation.

Alternative scenario: if the price breaks down through the support level of 0.9700 and fixes below it, the downtrend will likely resume.

• – German Ifo Business Climate (m/m) at 11:00 (GMT+3);
• – US CB Consumer Confidence (m/m) at 17:00 (GMT+3);
• – FOMC Member Waller Speaks at 20:55 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1319
• Prev Close: 1.1277
• % chg. over the last day: -0.37 %

The former finance minister, Rishi Sunak, is the new Prime Minister of Great Britain. The new government now faces the daunting task of providing stability after a period of political and financial chaos in the market. Another equally important task is to lead the country through a recession. S&P Global analysts tracking business activity data indicated yesterday that economic activity in the country had fallen to a 21-month low. Other data show that, in fact, the UK is already in recession. Investors were wary of the news about the new Prime Minister, and the British pound barely moved yesterday, indicating that traders are not yet ready to trade the British currency.

• Support levels: 1.1172, 1.1093, 1.0915, 1.0817
• Resistance levels: 1.1380, 1.1478, 1.1693, 1.1816, 1.1901

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame is bullish. The price is trading at the level of the moving averages. The MACD indicator has become inactive. Under such market conditions, buy trades can be considered from the support level of 1.1172, but better after confirmation. Sell deals are best to look for on intraday time frames, the nearest resistance level is 1.1380, but it is also better with confirmation, as the level has already been tested.

Alternative scenario: if the price breaks down of the 1.1093 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 147.63
• Prev Close: 149.00
• % chg. over the last day: -0.93 %

After the second currency intervention, the USD/JPY exchange rate stabilized slightly, but the price is still pulling higher like a magnet. Historically, central bank interventions don’t work in the long run and have only a temporary effect. However, they significantly impact market volatility and can seriously hurt traders and investors. Despite the interventions, the fundamental picture is still in favor of USD/JPY quotes growth since the Bank of Japan does not intend to abandon its soft monetary policy, while the US Fed is raising the rates and the gap between the rates is widening every month.

• Support levels: 146.63, 145.88, 144.91, 144.16, 143.00
• Resistance levels: 150.00, 151.05

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish despite the currency intervention. The price is trading at the level of the moving averages. The MACD indicator has become inactive, indicating that traders are not yet ready to trade the Japanese currency. Under such market conditions, buy trades can be searched for on intraday time frames from the support level of 146.63, but with confirmation. Sell deals can be sought from the resistance level of 150.00 or 151.05, but only with additional confirmation in the form of a reverse initiative.

Alternative scenario: If the price fixes below 145.88, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3631
• Prev Close: 1.3705
• % chg. over the last day: +0.54 %

The Canadian dollar is a commodity currency and depends not only on the monetary policy of the Bank of Canada but also on the USD index and oil dynamics. The oil quotes are now inclined to grow on the OPEC+ country’s production reduction background. That’s why the Canadian dollar may strengthen considerably in the nearest future, as the US Fed officials already hint at the less aggressive policy. Meanwhile, the Bank of Canada keeps the same interest rate as the US Fed.

• Support levels: 1.3639, 1.3619, 1.3583, 1.3535, 1.3454
• Resistance levels: 1.3795, 1.3855, 1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is trading at the level of moving averages. The MACD indicator has become inactive. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3639 but better after confirmation. For sell deals, it is best to consider the resistance level of 1.3795, but only after additional confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3619, the downtrend will likely resume.