The EUR/USD currency pair

• Prev Open: 1.1860
• Prev Close: 1.1776
• % chg. over the last day: -0.71%

The EUR/USD currency pair has once again come under the control of sellers. In turn, the dollar index, which has an inverse correlation to the euro, has increased, as investors are pricing in expectations that the Fed will start to tighten policy very soon (buy the rumor, sell the fact).

• Support levels: 1.1746, 1.1609
• Resistance levels: 1.1791, 1.1834, 1.1889, 1.1934, 1.1969

The trend is still bearish. After the bad CPI data, the sellers’ pressure grew again, which led to the breakdown of the previous minimum. The MACD indicator sharply returned to the negative zone without any signs of divergence. Under such market conditions, it is better to trade intraday. For sell positions, traders should wait for a pullback to the resistance level. Entries for long positions can be searched on support levels, but with short targets, as it will be trading against the trend.

Alternative scenario: if the price breaks out through the 1.1889 resistance level and fixes above, the general uptrend is likely to be resumed.

• – European Industrial Production (m/m) at 12:00 (GMT+3);
• – US Producer Price Index (m/m) at 15:30 (GMT+3);
• – US Fed Chair Jerome Powell’s Testimony at 19:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.3877
• Prev Close: 1.3810
• % chg. over the last day: -0.48%

Despite the decline, the British pound looks more confident, as it correlates with Brent oil prices, which tend to rise. Moreover, the LIBOR 3-month dollar rate continues to decline slowly, providing support for the British currency. Today, the UK will report on the inflation rate, so the volatility will be high.

• Support levels: 1.3756
• Resistance levels: 1.3835, 1.3923, 1.4002, 1.4075, 1.4101, 1.4138, 1.4191

The GBP/USD trend is bearish on the H1 timeframe. But the pressure of buyers has become weak. The MACD indicator has returned to the negative zone with no signs of divergence. Under such market conditions, it is better to trade intraday. For sell positions, traders should wait for a pullback to the resistance level. Entries for long positions can be searched on support levels.

Alternative scenario: if the price breaks out through the 1.3922 resistance level and consolidates above, the bearish scenario is likely to be canceled.

• – UK Consumer Price Index (m/m) at 09:00 (GMT+3);
• – UK Core Consumer Price Index (m/m) at 09:00 (GMT+3).

The USD/JPY currency pair

• Prev Open: 110.36
• Prev Close: 110.63
• % chg. over the last day: +0.24%

The dollar index growth pushes USD/JPY quotes up. The price is moving to the priority change level. Japan’s economy will most likely grow at a slower pace in the third quarter than initially expected as new emergency measures to contain the spread of the coronavirus in Tokyo during the Olympic Games are affecting consumption.

• Support levels: 110.47, 109.63, 109.31
• Resistance levels: 110.73, 111.06, 111.48, 110.73, 112.18

From the point of view of technical analysis, there is a downward trend on the H1 timeframe, as the price is still trading below the priority change level. But the pressure of the buyers is increasing, and the price managed to consolidate above the level of the moving average. The MACD indicator is in the positive zone with no signs of divergence. Under such market conditions, traders are better to look for sell positions from the priority change level if the sellers show the initiative to defend the level. Buy positions should be considered only after the breakout of the 110.73 level.

Alternative scenario: if the price rises above 110.73, the uptrend is likely to be resumed.

The USD/CAD currency pair

• Prev Open: 1.2452
• Prev Close: 1.2514
• % chg. over the last day: +0.50%

The Canadian dollar is highly correlated with the dollar index and oil prices. Yesterday, the dollar index rose sharply, which led to an increase in the USD/CAD quotes by 0.5%. The Bank of Canada will report on the interest rate today. Surprises are not expected, but the press conference may bring up the issue of future tightening policies in the following meetings since the growth of inflation increases, which will have a negative impact on consumption.

• Support levels: 1.2448, 1.2404, 1.2347, 1.2312, 1.2260, 1.2190
• Resistance levels: 1.2519, 1.2587

Technically, the trend remains bullish. The price is still trading above the moving average and above the priority change level. The MACD indicator returned to the positive zone. Under such market conditions, it is best to trade on the lower timeframes. Buyers may look for trades from the support levels within the day. There are no optimal entry points to open sell positions now.

Alternative scenario: if the price breaks down through the 1.2370 support level and fixes below, the downtrend is likely to be resumed.

• – BOC Interest Rate Decision at 17:00 (GMT+3);
• – BOC Rate Statement at 17:00 (GMT+3);
• – BOC Press Conference at 18:00 (GMT+3).