The EUR/USD currency pair
- Prev Open: 1.0984
- Prev Close: 1.0955
- % chg. over the last day: -0.26 %
The head of the US Federal Reserve said in his speech to Congress that the Fed is switching to a more moderate pace of rate hikes. This is the reason there was a pause at the June meeting. The Central Bank is targeting further rate hikes in preparation for a slowing economy and worsening labor market conditions. According to the FedWatch Tool, the probability of a rate hike at the July meeting has increased to 77%. This hawkish bias increases government bond yields and therefore strengthens the US dollar.
- Support levels: 1.0932, 1.0845, 1.0785, 1.0719, 1.0688, 1.0659, 1.0634
- Resistance levels: 1.0995, 1.1185
The trend on the EUR/USD currency pair on the hourly time frame has changed to bullish. The MACD indicator became negative, and the price is correcting. Under such market conditions, buy trades are possible from the support level of 1.0932, but only with additional confirmation on the lower time frames. Sell deals can be considered from the resistance level of 1.0995 but with confirmation in the form of a change in the structure on the lower time frames.
Alternative scenario: if the price breaks through the support level of 1.0844 and fixes below it, the downtrend will likely resume.
- – Eurozone German Manufacturing PMI (m/m) at 10:30 (GMT+3);
- – Eurozone German Services PMI (m/m) at 10:30 (GMT+3);
- – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
- – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
- – US FOMC Bullard Speaks at 12:15 (GMT+3);
- – US FOMC Bostic Speaks at 15:00 (GMT+3);
- – US Manufacturing PMI (m/m) at 16:45 (GMT+3);
- – US Services PMI (m/m) at 16:45 (GMT+3).
The GBP/USD currency pair
- Prev Open: 1.2768
- Prev Close: 1.2746
- % chg. over the last day: +0.12 %
The Bank of England raised the interest rate by 0.5% yesterday. This came as a surprise as most economists were expecting a 0.25% increase. The unexpected acceleration of the Bank of England's policy tightening led to a fall in the pound. Initially, the pound jumped higher, but then the move reversed. Typically, higher interest rates support the currency, but a sharp rise in inflation and fears of stagflation in the UK are exacerbating the pound's problems, despite the increase in borrowing.
- Support levels: 1.2676, 1.2627, 1.2539, 1.2486, 1.2421, 1.2391, 1.2349
- Resistance levels: 1.2801, 1.2991
From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price forms a wide-volatile corridor with slight signs of bearish pressure. The MACD indicator has turned negative. There is a high probability of correction to the nearest support levels. The most optimal level to buy is 1.2676 but with confirmation. It is best to consider sell deals from the resistance level of 1.2801 but also with confirmation since the level has already been tested.
Alternative scenario: if the price breaks through the support level 1.2627 and fixes below it, the downtrend will most likely resume.
- – UK Retail Sales (m/m) at 09:00 (GMT+3);
- – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
- – UK Services PMI (m/m) at 11:30 (GMT+3).
The USD/JPY currency pair
- Prev Open: 141.76
- Prev Close: 143.10
- % chg. over the last day: +0.94 %
Japan's national core CPI declined from 3.4% to 3.2% (expected at 3.1%). While core inflation declined from the previous month, the overall inflation figure rose to a 42-year high in May. The trend points to increased pressure on the Bank of Japan to tighten policy, even though the bank has confirmed that it has no plans to change its ultra-soft policy in the near future. Moreover, the Japanese yen is approaching price levels, and the Japanese government might respond with intervention.
- Support levels: 142.37, 141.47, 141.23, 140.16, 139.85, 139.23, 138.81
- Resistance levels: 143.62, 145.16
From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price continued the uptrend. Indicator MACD is in a positive zone, the pressure of buyers prevails, but there are signs of divergence and overbought price. The most suitable level to buy is 142.37 but with confirmation on the lower time frames. Sell trades can be considered from the resistance level of 143.62 but with confirmation in the form of a bearish initiative.
Alternative scenario: if the price fixes below the 141.23 support level, with a high probability the downtrend will resume.
- – Japan National Core Consumer Price Index at 02:30 (GMT+3);
- – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
- – Japan Services PMI (m/m) at 03:30 (GMT+3).
The USD/CAD currency pair
- Prev Open: 1.3156
- Prev Close: 1.3150
- % chg. over the last day: -0.04 %
Canadian retail sales rose by 0.5% in May. Retail store sales are up after two months of decline, suggesting that Canadians' purchasing power remains resilient despite tighter economic conditions. The rise in retail sales strengthens the case for a Bank of Canada rate hike in July. Consumer spending momentum is expected to slow in the second half of the year as higher interest rates and higher inflation begin to put pressure on purchasing power.
- Support levels: 1.3135
- Resistance levels: 1.3200, 1.3293, 1.3317, 1.3357, 1.3384, 1.3461, 1.3503
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 correcting to the nearest resistance level. The MACD indicator became positive, and there is buying pressure during the day. It is better to buy from the 1.3135 support level but with confirmation on the lower time frames. It is better to look for sell deals from the resistance level of 1.3200 but with confirmation in the form of reverse initiative.
Alternative scenario: if the price breaks through and consolidates above the resistance level of 1.3293, the uptrend will resume with a high probability.
by , 2023.06.23
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