The EUR/USD currency pair

• Prev Open: 1.0919
• Prev Close: 1.0941
• % chg. over the last day: +0.20%

Geopolitical tensions in Eastern Europe are not declining. The European economy is approaching stagflation (a slowdown in economic growth with high inflation), and the US Federal Reserve will raise the interest rates tomorrow. All these factors will harm the European currency.

• Support levels: 1.0948, 1.0916, 1.0887, 1.0823, 1.0633
• Resistance levels: 1.1051, 1.1112, 1.1291

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The price is now trading in the price corridor near the moving averages. The MACD indicator shows a slight buying pressure. Under such market conditions, it is best to look for sell trades on intraday time frames from the resistance level of 1.1051. Buy trades should be considered from the support level 1.0948 or 1.0916, but only with short targets.

Alternative scenario: if the price breaks out through the 1.1112 resistance level and fixes above, the mid-term uptrend will likely resume.

• – German ZEW Economic Sentiment (m/m) at 12:00 (GMT+2);
• – Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+2);
• – Eurozone Industrial Production (m/m) at 12:00 (GMT+2);
• – US Producer Price Index (m/m) at 14:30 (GMT+2);
• – US NY Empire State Manufacturing Index (m/m) at 14:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3034
• Prev Close: 1.3002
• % chg. over the last day: -0.24%

UK labor market data showed a positive trend. The unemployment rate fell from 4.1% to 3.9%, jobless claims fell by 48,000, and average earnings increased. But the British pound is still declining despite rising interest rates as well as economic indicators. Currently, the pound is declining due to the narrowing spread between UK and US government bond yields. But the UK’s economic outlook is now much better than those of the Eurozone.

• Support levels: 1.2989, 1.2863
• Resistance levels: 1.3085, 1.3164, 1.3274

On the hourly time frame, the trend on the GBP/USD currency pair is bearish. Volatility is decreasing, buying pressure is increasing. The MACD indicator is in the negative zone, but there is a divergence towards long positions on higher time frames. Under such market conditions, it is better to look for buy deals from the support level 1.2989, but it is better with confirmation. For sell deals, it is better to consider the resistance level of 1.3085.

Alternative scenario: if the price breaks out through the 1.3164 resistance level and fixes above, the mid-term uptrend will likely resume.

• – UK Average Earnings Index (m/m) at 09:00 (GMT+2);
• – UK Claimant Count Change (m/m) at 09:00 (GMT+2);
• – UK Unemployment Rate (m/m) at 09:00 (GMT+2).

The USD/JPY currency pair

• Prev Open: 117.33
• Prev Close: 118.17
• % chg. over the last day: +0.71%

The Japanese yen continues to decline. This week, the US Federal Reserve and the Bank of Japan will hold monetary policy meetings. However, while the Federal Reserve will almost certainly raise interest rates, the Bank of Japan will remain dovish on monetary policy for an extended period due to low inflation and high energy prices. Such a situation favors the growth of USD/JPY quotes. Analysts at Bank of America raised their USD/JPY forecast to 123 by the third quarter.

• Support levels: 117.34, 116.95, 116.32
• Resistance levels: 118.32, 118.64

The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator is in the positive zone. There are signs of overbought and divergence, which means that a downward connection is close. In such market conditions, it is best to look for buy deals after a slight pullback, as the price has deviated strongly from the moving averages. A support level of 117.34 would be the best, but with additional confirmation. For sell deals, the resistance level of 118.32 can be considered.

Alternative scenario: if the price fixes below 116.32, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2726
• Prev Close: 1.2818
• % chg. over the last day: +0.72%

The Canadian dollar is a commodity currency, so it is highly dependent not only on the monetary policy of the Bank of Canada but also on the dynamics of oil prices and the dollar index. Oil prices fell to a 2-week low amid a new round of talks between Ukraine and Russia. Investors started fixing their positions as oil reached analysts’ targets of $125. With the dollar index rising, this led to an upward movement on the USD/CAD currency pair.

• Support levels: 1.2764, 1.2733, 1.2653, 1.2555, 1.2517
• Resistance levels: 1.2871, 1.2890

In terms of technical analysis, the USD/CAD currency pair trend is bullish. The MACD indicator is in the positive zone, with no signs of reversal. It is worth trading only with short targets because both oil and the dollar index are still fundamentally inclined to grow. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level 1.2764, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2871.

Alternative scenario: if the price breaks through and consolidates below 1.2733, the downtrend will likely resume.