The EUR/USD currency pair
- Prev Open: 1.0948
- Prev Close: 1.0904
- % chg. over the last day: -0.40 %
The Microeconomic Data Center of the Federal Reserve Bank of New York published a survey of consumer expectations. Inflation expectations declined in the short, medium, and long term. Median inflation expectations fell across the board: from 3.8% to 3.5% at the one-year-ahead horizon and from 3.0% to 2.9% at the three- and five-year-ahead horizons. What does it mean? Once central banks peak in interest rates, the medium-term trends in currency pairs will be determined by the differential of those rates, as well as the expectation of lower rates. As a rule, when rates fall, the national currency declines.
- Support levels: 1.0901, 1.0883, 1.0928, 1.0911, 1.0866
- Resistance levels: 1.0936, .0983, 1.1004, 1.1046, 1.1102, 1.1198, 1.1227
The trend on the EUR/USD currency pair on the hourly timeframe is bearish. The price is trading below the moving averages. The MACD indicator is in the negative zone, and selling pressure persists, but the price has reached the support level, where buyers took the initiative. Under such market conditions, buy trades can be considered from the support level of 1.0901 or 1.0883, but with confirmation in the form of a false breakdown and change of structure on the lower timeframes, as the levels have already been tested. Sell trades can be considered from the resistance level of 1.0936 but with confirmation in the form of sellers' reaction.
Alternative scenario: if the price breaks through the resistance level of 1.1004 and fixes above it, the uptrend will likely resume.
- – German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
- – Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
- – US Retail Sales (m/m) at 15:30 (GMT+3);
- – US NY Empire State Manufacturing Index (m/m) at 15:30 (GMT+3);
- – US FOMC member Kashkari Speaks at 18:00 (GMT+3).
The GBP/USD currency pair
- Prev Open: 1.2691
- Prev Close: 1.2747 1.2679
- % chg. over the last day: -0.09 %
Today, the UK will release the labour market data. Many traders are looking for signs that the labour market may be "cracking". If the unemployment rate and/or the number of people claiming benefits rises significantly, wage pressures may ease in the future. This would indicate a slowdown in economic progress and would also cause the Bank of England (BoE) to be more cautious in raising rates further. If the scenario is the opposite and the labour market shows resilience, the BoE will confidently continue tightening. As inflation is expected to start falling, given last week's positive GDP data, this could provide significant support for the Pound.
- Support levels: 1.2646, 1.2621
- Resistance levels: 1.2710, 1.2738, 1.2791, 1.2880, 1.2913, 1.2942, 1.3011, 1.3072
From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price is trading below the moving averages. From a broader perspective, the broadly volatile flat has expanded, and now the price is on the lower boundary of this accumulation. The MACD indicator is in the negative zone, but the sellers' pressure is weak. There is a divergence. Buy delas can be considered from the support level of 1.2646 but with additional confirmation on the lower timeframes in the form of a structure change. Sell trades are best considered from the resistance level of 1.2710 but with confirmation in the form of sellers' initiative.
Alternative scenario: if the price breaks through the resistance level of 1.2738 and fixes above it, the uptrend will most likely be renewed.
- – UK Average Earnings Index (m/m) at 09:00 (GMT+3);
- – UK Claimant Count Change (m/m) at 09:00 (GMT+3);
- – UK Unemployment Rate (m/m) at 09:00 (GMT+3).
- Prev Open: 144.84
- Prev Close: 145.54
- % chg. over the last day: +0.48 %
- Support levels: 145.00, 143.72, 143.26, 142.64, 140.98, 140.71, 139.57
- Resistance levels: 145.95
- – Japan GDP (q/q) at 02:50 (GMT+3);
- – Japan Industrial Production (m/m) at 07:30 (GMT+3).
- Prev Open: 1.3433
- Prev Close: 1.3459
- % chg. over the last day: +0.19 %
- Support levels: 1.3437, 1.3410, 1.3342, 1.3319, 1.3281, 1.3263, 1.3224, 1.3199
- Resistance levels: 1.3500
- – Canada Consumer Price Index (m/m) at 15:30 (GMT+3).
The USD/JPY currency pair
On Monday, the Japanese yen weakened further against the US dollar, and the quotes were in the area where the Bank of Japan (BoJ) intervened to curb the yen's weakening in 2022. Concerns were also raised by Typhoon Lan, which is expected to hit Japan on Tuesday. Restrictions on air and rail traffic are already being imposed. The USD/JPY quotes rose above the psychologically important mark of 145.00, setting a new maximum for this year. Accordingly, the market will again be watching for possible interventions. According to HSBC reports, BoJ action can be expected in the 145-148 range.
From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price broke through the psychological mark of 145 and continued the upward movement. The MACD indicator is in the positive zone, but the divergence is observed on several timeframes. Buyers are finding it more and more difficult to move the price higher, the feeling of pulling the spring for a sharp fall. The most suitable level for buying will be 145.00, but with confirmation in the form of buyers' initiative on the lower timeframes. Sell trades can be considered from the resistance level of 145.95 but with confirmation in the form of sellers' initiative and change of trend structure.
Alternative scenario: if the price fixes below the 143.25 support level, with a high probability that the downtrend will be renewed.
The USD/CAD currency pair
Today, Canada will release the inflation data for July. The overall inflation rate is expected to rise from 2.8% to 3.0% year-over-year, while core inflation (excluding food and energy prices) is expected to fall from 3.2% to 2.8%. The Bank of Canada has now taken a tactical pause and is carefully studying incoming economic data. If there are no surprises on inflation, things will remain as they are now, with the Bank of Canada likely to have peaked on rates. But if inflation shows new signs of picking up, the Bank of Canada may undertake another rate hike as long as GDP and the labour market allow it. Therefore, a rise in inflation figures is likely to be accompanied by a strengthening of the Canadian dollar and vice versa.
From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is trading in a corridor with slight upward pressure. The MACD indicator has become inactive, and volatility has decreased in anticipation of inflation news. This indicates an impending impulsive move. It is better to buy after a pullback to the support level of 1.3410 or, in case of a deeper correction - to 1.3342. Sell trades are better to look for from the resistance level of 1.3500, but after a false breakout, as the level has already been tested.
Alternative scenario: if the price breaks through and consolidates below the support level of 1.3319, the downtrend will be renewed with a high probability.
by , 2023.08.15
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