The EUR/USD currency pair
- Prev Open: 1.0709
- Prev Close: 1.0711
- % chg. over the last day: +0.02 %
European Central Bank President Christine Lagarde said yesterday that inflationary pressures remain strong and the interest rate will rise further. Lagarde reiterated that there is no clear evidence that core inflation has peaked. Although there was a second slowdown in core inflation in May, most investors and analysts are predicting two more rate hikes from the ECB at 0.25% for each meeting.
- Support levels: 1.0698, 1.0673, 1.0659, 1.0634
- Resistance levels: 1.0800, 1.0836, 1.0875, 1.0904, 1.0956
The trend on the EUR/USD currency pair on the hourly time frame has changed to bullish. The price corrected to the Fibonacci buying zone, where the buyers showed a reaction. The MACD indicator became positive, and the price is trading above the moving averages. Under such market conditions, buy trades can be considered from the support level of 1.0698, but only with additional confirmation in the form of buyers' initiative. Sell deals can be considered from the resistance level of 1.0778 or 1.0800 but with confirmation in the form of a false breakout and a change in the structure on the lower time frames.
Alternative scenario: if the price breaks through the support level of 1.0634 and fixes below it, the downtrend will likely resume.
- – Eurozone retail sales (m/m) at 12:00 (GMT+3).
The GBP/USD currency pair
- Prev Open: 1.2448
- Prev Close: 1.2432
- % chg. over the last day: -0.13 %
The UK Services Business Activity Index came in at 55.2 in May, up slightly from April's 55.1. The main findings of the report are strong growth in output and new jobs, an increase in headcount and wage growth pushing up cost inflation. On the one hand, this points to the robustness of the UK economy. On the other hand, wage pressures are something the Bank of England does not want to see, as consumer inflation is poorly controlled.
- Support levels: 1.2391, 1.2349
- Resistance levels: 1.2487, 1.2546, 1.2569, 1.2612
From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame has changed to bullish. The situation is similar to the eurodollar. The price has corrected to the Fibonacci Buy zone, where the buyers showed their reaction. The MACD indicator has become inactive. The most optimal level to buy is the 1.2391 level but with confirmation. It is best to look for sell deals from the resistance level of 1.2487 but with confirmation of the change of the initiative on the lower time frames.
Alternative scenario: if the price breaks through the support level 1.2349 and fixes below it, the downtrend will most likely resume.
- – UK Construction PMI at 11:30 (GMT+3).
The USD/JPY currency pair
- Prev Open: 139.96
- Prev Close: 139.58
- % chg. over the last day: -0.27 %
There is a sharp increase in tourism in Japan. According to Japan's National Tourism Organization, nearly two million visitors arrived from abroad in April. Incoming demand is a factor accelerating price increases for services and wage increases. Tourism spending, combined with labor shortages, could support the kind of wage and price level momentum that Bank of Japan Governor Kazuo Ueda wants to see before a policy change is raised.
- Support levels: 139.45, 138.81, 138.00, 137.54, 136.52, 135.66, 135.15, 134.67
- Resistance levels: 140.45, 141.07
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 buy zone according to Fibonacci. The MACD indicator is in the negative zone but without any signs of bearish pressure. To buy, it is best to wait for a bullish reaction to the support level of 139.45. Sell trades can be considered from the resistance level of 140.13 or 140.45 but with confirmation in the form of a bearish initiative.
Alternative scenario: if the price fixes below the 138.80 support level, with a high probability the downtrend will resume.
The USD/CAD currency pair
- Prev Open: 1.3416
- Prev Close: 1.3443
- % chg. over the last day: +0.20 %
Although the Bank of Canada did not raise the rate at its last meeting, the question of a rate hike is back. The Canadian economy experienced a strong rebound in GDP growth in the first quarter. The labor market is showing resilience, and overall inflation unexpectedly accelerated in April. Even if there is no rate hike, the rhetoric may become more hawkish as officials prepare for a possible increase in the third quarter.
- Support levels: 1.3397, 1.3267
- Resistance levels: 1.3503, 1.3589, 1.3647, 1.3667, 1.3695
From the point of view of technical analysis, the trend on the USD/CAD currency pair in the medium term is bearish. A flat accumulation continues to form, which complicates the search for good entry points. The MACD indicator has become inactive. Under such market conditions, it is better to look for sell positions after the true breakdown of the lower boundary of the accumulation. It is best to look for buy deals from the resistance level of 1.3397, but only with confirmation in the form of a change in the structure on the lower time frames. It will be a false breakdown of the flat accumulation.
Alternative scenario: if the price breaks through and consolidates above the resistance level of 1.3647, the uptrend will resume with a high probability.
- – UK Construction PMI at 11:30 (GMT+3).
by , 2023.06.06
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