The Analytical Overview of the Main Currency Pairs on 2022.05.04

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.0500
  • Prev Close: 1.0519
  • % chg. over the last day: +0.18%

The Producer Price Index, which shows the inflation rate between factories and plants, jumped by 5.5% MoM in Europe. As a rule, the growth of this index is further accompanied by rising prices for consumer goods. Due to strong inflationary pressures, the ECB sees a possible interest rate hike as early as July. The unemployment rate in the Eurozone decreased from 6.9% to 6.8%.

Trading recommendations
  • Support levels: 1.0453
  • Resistance levels: 1.0584, 1.0633, 1.0723, 1.0766, 1.0799, 1.0869, 1.0955

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The price reached the support level and is trading flat now. The MACD indicator has become inactive, but the divergence is increasing. Under such market conditions, traders can look for sell deals from the resistance level of 1.0633, but only after the additional confirmation. Buy trades can be considered on intraday timeframes from the support level of 1.0453, but only with short targets and confirmation.

Alternative scenario: if the price breaks out through the 1.0770 resistance level and fixes above, the uptrend will likely resume.

EUR/USD
News feed for 2022.05.04:
  • – German Services PMI (m/m) at 10:55 (GMT+3);
  • – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
  • – Eurozone Retail Sales (m/m) at 12:00 (GMT+3);
  • – US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+3);
  • – US ISM Services PMI (m/m) at 17:00 (GMT+3);
  • – US FOMC Statement at 21:00 (GMT+3);
  • – US Fed Interest Rate Decision at 21:00 (GMT+3);
  • – US FOMC Press Conference at 21:30 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2490
  • Prev Close: 1.2494
  • % chg. over the last day: +0.03%

There is an almost 100% chance that the Bank of England will raise the key rate by 25 basis points (0.25%) to 1% on Thursday, the highest rate level in 13 years and the threshold at which active quantitative tightening can begin. It is important to look closely at changes in gross domestic product forecasts and the consumer price index. GDP is likely to fall sharply in 2022, and inflation is expected to be revised upward. If the forecasts are much worse, the pound could fall even more.

Trading recommendations
  • Support levels: 1.2486, 1.2438
  • Resistance levels: 1.2530, 1.2792, 1.2981, 1.3010, 1.3114

On the hourly time frame, the GBP/USD currency pair trend is still bearish. The price reached the support level and is trading flat now. The MACD indicator has become inactive. Under such market conditions, sell trades should be looked for from the resistance level of 1.2530 intraday or 1.2695, but with confirmation. For buy deals, traders may consider the level of 1.2486, but only with short targets.

Alternative scenario: if the price breaks down through the 1.2792 resistance level and fixes above, the mid-term uptrend will likely be resumed.

GBP/USD
News feed for 2022.05.04:
  • – US FOMC Statement at 21:00 (GMT+3);
  • – US Fed Interest Rate Decision at 21:00 (GMT+3);
  • – US FOMC Press Conference at 21:30 (GMT+3).

The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 130.10
  • Prev Close: 130.13
  • % chg. over the last day: +0.02%

The Japanese market will be closed today and tomorrow. Therefore, currency pairs with the yen will be completely dependent on the movement of major currencies. The fundamental picture for the JPY remains the same. The Bank of Japan pursues an ultra-soft monetary policy, negatively affecting the national yen rate. Today, major currencies will depend on the dollar index as the Fed is expected to hold an important meeting and press conference, where Jerome Powell will speak about the future economic outlook. The dollar index could see a new impulse growth if the future outlook is unfavorable. If the outlook is favorable, the dollar index could decline as the negative scenario already in prices.

Trading recommendations
  • Support levels: 129.10, 128.55, 127.29, 126.91, 126.00, 125.57
  • Resistance levels: 130.80

The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator has become inactive, and the buyers' pressure has decreased. Volatility has reduced, while the price is trading in a narrow flat. Under such market conditions, it is best to look for buy deals, expecting the continuation of the uptrend, but only after a pullback, as the price has strongly deviated from the average values. First of all, it is worth considering the support level of 129.10 or 128.55, but with additional confirmation. A resistance level of 130.80 may be considered for sell deals, but only with short targets.

Alternative scenario: If the price fixes below 127.29, the uptrend will likely be broken.

USD/JPY
News feed for 2022.05.04:
  • – US FOMC Statement at 21:00 (GMT+3);
  • – US Fed Interest Rate Decision at 21:00 (GMT+3);
  • – US FOMC Press Conference at 21:30 (GMT+3).

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.2879
  • Prev Close: 1.2839
  • % chg. over the last day: -0.31%

The Canadian dollar is a commodity currency and depends not only on the monetary policy of the Bank of Canada but also on the dollar index and on the prices of energy commodities such as oil. The dollar index traded without a single dynamic yesterday. At the same time, oil prices decreased by 2% as demand worries over a prolonged quarantine in China due to COVID-19 outweighed the prospect of an EU embargo on Russian oil. As a result, the USD/CAD currency pair is trading without significant changes.

Trading recommendations
  • Support levels: 1.2824, 1.2750, 1.2644, 1.2607, 1.2521
  • Resistance levels: 1.2908

The USD/CAD currency pair is bullish in terms of technical analysis. The MACD indicator has become inactive, but the divergence has increased. Trade is worth it only with short targets because, fundamentally, both the dollar index and the Canadian dollar are inclined to grow. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2750, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2908, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below 1.2644, the downtrend will likely be resumed.

USD/CAD
News feed for 2022.05.04:
  • – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
  • – US FOMC Statement at 21:00 (GMT+3);
  • – US Fed Interest Rate Decision at 21:00 (GMT+3);
  • – US FOMC Press Conference at 21:30 (GMT+3).

by Justforex, 2022.05.04

We recommend you to get acquainted with the daily overview of the news feed.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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