The EUR/USD currency pair
- Prev Open: 1.0997
- Prev Close: 1.1061
- % chg. over the last day: +0.58 %
The Federal Reserve expectedly raised its interest rate by 0.25% on Wednesday and signaled a possible pause in June, stressing that incoming data will be crucial for monetary policy decisions. The ECB will hold its monetary policy meeting today. A 0.25% rate hike is also forecast, but there may be surprises in the form of a 0.5% move as core inflation in the Eurozone remains well above the ECB's target and shows little sign of slowing. Barclays currency strategists believe that even a slowdown in the ECB's rate hike cycle will not be an obstacle to further euro growth.
- Support levels: 1.1005, 1.0978, 1.0963, 1.0895, 1.0830, 1.0803, 1.0770, 1.0680
- Resistance levels: 1.1075, 1.1094, 1.1185
The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is steadily growing, breaking through all resistance levels. The MACD indicator is in the positive zone, with no signs of divergence, but it is overbought. Under such market conditions, buy trades are best considered after a slight correction to the levels of the moving averages. Sell deals can be considered from the resistance level of 1.1075 or 1.1094, but only with a confirmation in the form of a false breakout.
Alternative scenario: if the price breaks down through the support level of 1.0963 and fixes below it, the downtrend will likely resume.
- – German Services PMI (m/m) at 10:55 (GMT+3);
- – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
- – Eurozone Producer Price Index (m/m) at 12:00 (GMT+3);
- – Eurozone ECB Interest Rate Decision at 15:15 (GMT+3);
- – Eurozone ECB Monetary Policy Statement at 15:15 (GMT+3);
- – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
- – US Trade Balance (m/m) at 15:30 (GMT+3);
- – Eurozone ECB Press Conference at 15:45 (GMT+3).
The GBP/USD currency pair
- Prev Open: 1.2462
- Prev Close: 1.2564
- % chg. over the last day: +0.82 %
The dollar index declined yesterday after the US Federal Reserve meeting. A rate hike usually supports the local currency. But the current situation is such that the Fed is likely to hit the pause button in June. The Fed minutes have become more subdued, and the Fed is no longer indicating a further hike. At the same time, markets are already pricing in rate cuts by as much as 50 basis points by the end of the year in anticipation of worsening economic conditions. For its part, the Bank of England continues its path as inflation remains in double digits – the highest in Western Europe and among developed countries. It is due to a future reduction in the interest rate differential that the British pound is moving up.
- Support levels: 1.2539, 1.2489, 1.2421, 1.2386, 1.2343, 1.2320,
- Resistance levels: 1.2589, 1.2643
From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. At the moment, the price is trading above the levels of the moving averages. The MACD indicator is in the positive zone, but the first signs of divergence are observed. The best level to buy is 1.2539 or, in case of a stronger decline, 1.2489. It is better to look for sell deals on intraday time frames from the resistance level of 1.2589 but with confirmation in the form of a change in the structure on the lower time frames.
Alternative scenario: if the price breaks down through the 1.2421 support level and fixes below it, the downtrend will likely resume.
- – UK Services PMI (m/m) at 11:30 (GMT+3).
The USD/JPY currency pair
- Prev Open: 136.50
- Prev Close: 134.76
- % chg. over the last day: -1.29 %
Japan will have a public holiday for the rest of the week. Therefore, the dollar index will contribute to the main dynamics in the USD/JPY price formation. Yesterday the dollar index declined as recession risks in the US are growing. According to analysts, yesterday's 0.25% US Federal Reserve rate hike is the last one this year. Thus, the difference between the interest rates of the US Fed and the Bank of Japan will no longer increase, indicating that the medium-term upward movement in USD/JPY is close to completion. Fundamental factors are beginning to shift slowly towards a strengthening of the Japanese yen against the US dollar.
- Support levels: 134.52, 133.11, 132.70, 132.02, 131.82, 130.62
- Resistance levels: 136.42, 136.85, 137.26, 137.91
From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bullish. The price has corrected to the buying zone. The MACD indicator is in the negative zone, and there is sellers' pressure inside the day. Under such market conditions, it is better to look for buy deals after the support level of 134.52 or, in case of a deeper correction, from the 134.00 level, but with confirmation in the form of buyers' reactions. At the moment, the reaction is not observed. Sell trades can be considered from the level of 136.42, but also with confirmation and short targets.
Alternative scenario: if the price fixes below the 134.00 support level, the downtrend will be resumed with a high probability.
The USD/CAD currency pair
- Prev Open: 1.3623
- Prev Close: 1.3612
- % chg. over the last day: -0.08 %
Crude Oil price fell on Wednesday, continuing the losses of the previous session and falling to its lowest level since March. The reason for oil's fall is the growing macroeconomic headwinds, including the possibility of a recession in the US in the medium term. Many traders believe the US and Canadian economies are headed for a painful recession later this year, bending under the weight of rising borrowing costs. Typically, a recession reduces demand for fuel, leading to lower oil prices. Given the direct dependence of the Canadian dollar on oil, a decline in the price of "black gold" leads to a decline in the value of the CAD.
- Support levels: 1.3569, 1.3523, 1.3468, 1.3448, 1.3409, 1.3341, 1.3267
- Resistance levels: 1.3647, 1.3667, 1.3695
From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is forming a wide-volatile corridor. The MACD indicator became negative. Within the day, there is sellers' pressure. It is best to look for buy deals from the support level of 1.3569 but with confirmation in the form of reverse initiative. Sell positions are better to look for from the resistance level of 1.3647 or 1.3667 but with confirmation in the form of a false breakout and reverse initiative.
Alternative scenario: if the price breaks out and consolidates below the support level of 1.3468, the downtrend will likely resume.
- – Canada Trade Balance (m/m) at 15:30 (GMT+3);
- – Canada Ivey PMI (m/m) at 17:00 (GMT+3);
- – Canada BoC Gov Macklem Speaks at 19:50 (GMT+3).
by , 2023.05.04
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