The EUR/USD currency pair
- Prev Open: 1.1004
- Prev Close: 1.1135
- % chg. over the last day: +1.19 %
The US inflation slowed down sharply, which contributed to the fall of the dollar index to a 15-month low. Dollar weakness led most risk currencies such as the euro and pound to rally. The consumer price level fell from 4% to 3% (3.1% forecast) on an annualized basis. Core inflation (excludes food and energy prices) fell from 5.3% to 4.8% (forecast 5.0%). The probability of a rate hike at the September meeting of the US Federal Reserve fell to 14%. Investors expect the US Fed to end the tightening cycle after the July meeting.
- Support levels: 1.1071, 1.1001, 1.0958, 1.0925, 1.0866
- Resistance levels: 1.1185
The trend on the EUR/USD currency pair on the hourly time frame is still bullish. The price is trading above the moving averages, confidently breaking through all resistance levels. The MACD indicator is in the positive zone, but the divergence is observed on several time frames, and the price is overbought. There is a high probability of a correction. Under such market conditions, buy trades can be considered from the support level of 1.1071, but with additional confirmation on the lower time frames. Sell deals can be considered from the resistance level of 1.0958, but with confirmation in the form of a change of structure on the lower time frames.
Alternative scenario: if the price breaks through the support level of 1.0958 and fixes below it, the downtrend will likely resume.
- – Eurozone Industrial Production (m/m) at 12:00 (GMT+3);
- – Eurozone ECB Monetary Policy Meeting Accounts at 14:30 (GMT+3);
- – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
- – US Producer Price Index (m/m) at 15:30 (GMT+3).
The GBP/USD currency pair
- Prev Open: 1.2932
- Prev Close: 1.2747 1.2987
- % chg. over the last day: +0.42 %
The GBP/USD price reached a 15-month-high yesterday amid a sharp drop in the dollar index. Investors remain convinced that the Bank of England will be the longest to raise rates and the longest to keep them in restrictive territory. Over the last quarter, the UK economy remained flat and showed neither growth nor contraction. But in annual terms, GDP is already in the negative territory of 0.4%. And this is already a negative factor for the British currency, which will make it more difficult for the Bank of England to reduce inflation.
- Support levels: 1.2925, 1.2848, 1.2797, 1.2762, 1.2646
- Resistance levels: 1.3000
From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price is growing steadily, but it has reached the daily resistance level. The MACD indicator is in the positive zone, but the divergence is stronger. There is a high probability of a correction. The most optimal level for buying is 1.2925 but with confirmation. Sell trades are best considered from the resistance level of 1.3000 but with confirmation in the form of a change of structure on the lower time frames.
Alternative scenario: if the price breaks through the support level 1.2762 and fixes below it, the downtrend will most likely resume.
- – UK GDP (m/m) at 09:00 (GMT+3);
- – UK Industrial Production (m/m) at 09:00 (GMT+3);
- – UK Manufacturing Production (m/m) at 09:00 (GMT+3);
- – UK Trade Balance (m/m) at 09:00 (GMT+3).
- Prev Open: 140.32
- Prev Close: 138.51
- % chg. over the last day: -1.31 %
- Support levels: 138.00
- Resistance levels: 139.43, 140.18, 142.08, 142.99
- Prev Open: 1.3228
- Prev Close: 1.3186
- % chg. over the last day: -0.32 %
- Support levels: 1.3202, 1.3184, 1.3145, 1.3116
- Resistance levels: 1.3243, 1.3329, 1.3383, 1.3426, 1.3461, 1.3503
The USD/JPY currency pair
The Central Bank survey on household inflation expectations showed that households expect inflation to average 10.5% one year from now. Given this data and the fastest wage growth in nearly two decades, conditions are ripe for higher inflation in Japan, putting pressure on the Bank of Japan to abandon years of loose monetary policy. Markets are already betting on the Bank of Japan's policy adjustment, which is reflected in the strengthening of the Japanese yen.
From the technical point of view, the medium-term trend on the currency pair USD/JPY is in a downtrend. The price continues to decline, breaking through all support levels. The MACD indicator is in the negative zone, but the divergence is getting stronger. The most suitable level for buying will be 138.00 but with confirmation on the lower time frames in the form of buyers' initiative and change of structure on the lower time frames. Sell trades can be considered from the resistance level of 139.43 or 140.18, but also with confirmation on the lower time frames.
Alternative scenario: if the price fixes above the 142.99 resistance level, with a high probability the uptrend will resume.
The USD/CAD currency pair
As part of its ongoing fight against persistently high inflation, the Bank of Canada voted to raise the benchmark rate by 25 bps to 5.0%, the highest level in 22 years. In its statement, the Bank of Canada said the economy has been stronger than expected, adding that consumption and the labor market have been resilient. On the inflation outlook, the Bank of Canada acknowledged that price growth had softened, but noted that the improvement in overall momentum was largely due to lower energy prices rather than underlying pressures. As such, the Bank warned that restrictive policies will be in place for longer.
From the point of view of technical analysis, the trend on the USD/CAD currency pair has changed to a bearish one. The price broke through the level of priority change and consolidated below. The MACD indicator is in the negative area, but the divergence is increasing. It is better to buy from 1.3145 or 1.3116 but with confirmation on the lower time frames in the form of buyers' reaction to the level. Sell trades are best sought on intraday time frames from the moving averages or from the 1.3208 level but with confirmation in the form of sellers' initiative.
Alternative scenario: if the price breaks through and consolidates above the resistance level of 1.3303, the uptrend will resume with a high probability.
by , 2023.07.13
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