The EUR/USD currency pair
- Prev Open: 1.0693
- Prev Close: 1.0698
- % chg. over the last day: +0.05 %
From a fundamental point of view, the situation on the EUR/USD currency pair remains the same. ECB officials are unanimously saying that the current policy tightening is not enough and it is necessary to raise rates further. The probability of a rate hike at the upcoming ECB meeting is 100%, and more than 80% at the July meeting. In the medium term, there are now conditions for the euro to grow.
- Support levels: 1.0688, 1.0659, 1.0634
- Resistance levels: 1.0778, 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 correction is coming to an end, and the buyers have shown initiative. Under such market conditions, buy trades can be considered from the support level of 1.0688, but only with additional confirmation on the lower time frames. Sell deals can be considered from the resistance level of 1.0778 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 GDP (q/q) at 12:00 (GMT+3);
- – US Initial Jobless Claims (w/w) at 15:30 (GMT+3).
The GBP/USD currency pair
- Prev Open: 1.2420
- Prev Close: 1.2437
- % chg. over the last day: +0.14 %
According to the Organization for Economic Cooperation and Development, this year, the UK will face the highest inflation rate of all advanced economies. The OECD forecasts that overall inflation in the UK will slow amid falling energy prices and approach the target level by the end of 2024. Core inflation is expected to be more resilient due to high service inflation and will fall to 3.2% in 2024. That said, the Bank of England is expected to raise rates again at its June 22 meeting, with the peak rate expected to be in the 5.0-5.25% range.
- Support levels: 1.2420, 1.2391, 1.2349
- Resistance levels: 1.2499, 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 is bullish. The price is trading above the moving averages. The MACD indicator is inactive, but the momentum of the buyers remains. The best level for buying is 1.2420 but with confirmation. It is best to look for sell deals from the resistance level of 1.2499 but with a confirmation in the form of a false breakout and change in the structure 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.
The USD/JPY currency pair
- Prev Open: 139.63
- Prev Close: 140.16
- % chg. over the last day: +0.05 %
Revised data showed that Japan's GDP for the first quarter of 2023 grew more than originally estimated. Japan's GDP grew at an annualized rate of 2.7% in January-March, much higher than the preliminary growth estimate of 1.6% and the average economists' forecast of 1.9% growth. Further growth in the world's third-largest economy will depend on sustained wage increases, which the Bank of Japan and the government regard as a major policy goal.
- Support levels: 139.55, 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 is forming a wide volatile flat with signs of bullish pressure. The MACD indicator is in the positive zone, with no signs of a reversal. The best way to buy is to use the 139.55 support level but with confirmation on the lower time frames. Sell trades can be considered from the resistance level of 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.
- – Japan GDP (q/q) at 02:50 (GMT+3).
The USD/CAD currency pair
- Prev Open: 1.3401
- Prev Close: 1.3370
- % chg. over the last day: -0.23 %
The Bank of Canada, which paused its rate hike cycle after its meeting in January, followed Australia's RBA with an unexpected 25 bps rate hike to 4.75% due to growing concerns that inflation could be stuck well above the 2% target amid consistently strong economic growth. The Canadian dollar strengthened to a one-month high against the US dollar on the back of this news. The BoC said in a statement that the policy has not been "restrictive enough" to return inflation to target levels and balance supply and demand. Money markets see about a 60% chance of another rate hike in July. Analysts' average prediction is that the Canadian dollar will rise to 1.29 before the end of the year.
- Support levels: 1.3300, 1.3267
- Resistance levels: 1.3411, 1.3504, 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. The price is trading below the moving averages. The MACD indicator is in the negative zone, but it indicates a divergence on several time frames. Buying is best sought from the support level of 1.3300, but only with confirmation in the form of a change in the structure on the lower time frames. It is better to look for sell deals from the moving averages or after a false breakout of the 1.3411 resistance level.
Alternative scenario: if the price breaks through and consolidates above the resistance level of 1.3504, the uptrend will be renewed with a high probability.
by , 2023.06.08
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