The EUR/USD currency pair

• Prev Open: 1.1803
• Prev Close: 1.1815
• % chg. over the last day: +0.10%

Industrial production in Europe increased by 1.5% compared to the previous month. The European economy is also on the way to recovery, so the ECB has already started preparations for reducing the bond-buying program. Investors are waiting for the ECB head Christine Lagarde’s speech today and for the inflation data in Europe to be published tomorrow.

• Support levels: 1.1783, 1.1759, 1.1704, 1.1620
• Resistance levels: 1.1835, 1.1894, 1.1934, 1.1969

From the technical point of view, the general trend on the EUR/USD currency pair is bullish. The MACD indicator has become inactive. It is clearly visible how the price is narrowing in a triangle pattern. This narrowing of liquidity usually occurs before sharp impulsive movements. Under such market conditions, buy trades can be considered from the support levels after the price breaks through the triangle upwards. It is better to look for sell trades throughout the day and if the price breaks through the triangle downwards.

Alternative scenario: if the price breaks through the 1.1704 support level and fixes below, the mid-term uptrend will likely be broken.

• – ECB President Christine Lagarde’s Speech at 15:00 (GMT+3);
• – US Retail Sales (m/m) at 15:30 (GMT+3);
• – US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.3808
• Prev Close: 1.3837
• % chg. over the last day: +0.21%

Amid rising food and beverage prices, annual inflation jumped from 2% to 3.2% in the UK. This is the largest surge of inflation ever. Labour and the trade unions have warned that households will face a “double whammy” this winter as living costs are rising and the government is going to increase taxes and introduce major cuts in social security benefits. It will be interesting to keep an eye on whether the Bank of England will take any action to suppress inflation.

• Support levels: 1.3793, 1.3750, 1.3692, 1.3632, 1.3614, 1.3525
• Resistance levels: 1.3886, 1.3935, 1.4002

On the hourly time frame, the GBP/USD trend is bullish. But amid the weakness of the dollar index and the weakness of the British pound, the price has been trading without dynamics. The MACD indicator has become inactive. Under such market conditions, it is better to look for buy trades from the support levels near the moving average line. Sell positions can be considered from the resistance levels with short targets throughout the day.

Alternative scenario: if the price breaks through the 1.3692 support level and consolidates below, the bearish scenario will likely resume.

The USD/JPY currency pair

• Prev Open: 109.62
• Prev Close: 109.36
• % chg. over the last day: -0.23%

Japan is preparing to elect a new prime minister. On Thursday, Japan’s Vaccination Minister Taro Kono, the candidate to replace Prime Minister Yoshihide Suga, said that any new economic stimulus measures should prioritize spending on renewable energy and expanding 5G networks nationwide. Taro Kono leads public polls on who the Japanese want to see as a prime minister.

• Support levels: 109.19, 108.65
• Resistance levels: 109.43, 109.69, 110.10, 110.40, 110.66, 110.95, 111.48

The main trend on the USD/JPY currency pair changed to bearish. Yesterday, the price broke through the priority change level and consolidated below. The MACD indicator has become negative, but there are signs of sellers’ weakness. Under such market conditions, traders should look for sell positions from the zones where sellers show initiative near the moving average. Buy positions should be considered only from the support levels where the buyers show initiative throughout the day.

Alternative scenario: if the price rises above 110.10, the uptrend is likely to resume.

The USD/CAD currency pair

• Prev Open: 1.2690
• Prev Close: 1.2642
• % chg. over the last day: -0.37%

The Canadian dollar is a commodity currency, so the USD/CAD currency pair is highly dependent on the dynamics of the dollar index and oil prices. Yesterday, the dollar index declined, while oil prices significantly increased. As a result, the price of USD/CAD decreased by 0.37%. On Wednesday, Statistics Canada reported that the inflation rate increased to 4.1% in August – the highest level since 2003. Almost all goods and services were much more expensive in August than a year earlier, including housing accommodations (4.8%), transportation (8.7%), and food (2.7%).

• Support levels: 1.2625, 1.2583, 1.2518, 1.2425
• Resistance levels: 1.2713, 1.2812, 1.2891, 1.2951

In terms of technical analysis, the trend on the USD/CAD currency pair is bearish. But due to the growth of the dollar index and strengthening of the Canadian dollar, the price is trading inside the wide corridor, with some pressure from the sellers. The MACD indicator is negative again. Buy positions can be considered from the support levels where buyers show initiative, and only with short targets. It is better to look for sell positions from the resistance levels of a higher time frame.

Alternative scenario: if the price breaks through the 1.2812 resistance level and fixes above, the uptrend will likely resume.