The EUR/USD currency pair

• Prev Open: 1.1017
• Prev Close: 1.1029
• % chg. over the last day: +0.11%

Germany’s producer price index, which shows inflation between factories and plants, reached 25.9% y/y (+1.4% increase of the last month), the highest level ever seen since 1949. Excluding energy prices, the index is 12.4% in annual terms. Rising manufacturing inflation is usually preceded by an acceleration of consumer inflation.

• Support levels: 1.0917, 1.0887, 1.0823, 1.0633
• Resistance levels: 1.1079, 1.1112, 1.1291

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is still bearish. At the moment, the price is trading in a wide corridor. The MACD indicator has become inactive again. Under such market conditions, it is better to look for sell trades on the intraday time frames from the resistance level of 1.1079. Buy trades should be considered from the support level of 1.0917, 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.

• – US Fed Chair Powell Speaks at 14:00 (GMT+2);
• – US New Home Sales (m/m) at 16:00 (GMT+2);
• – US Crude Oil Reserves (w/w) at 16:30 (GMT+2);
• – US FOMC Member Daly’s Speaks at 17:45 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3165
• Prev Close: 1.3258
• % chg. over the last day: +0.70%

The consumer price index in the UK has set another record. Inflation increased by 0.7% last month to 6.2% (previous 5.5%) in annual terms. Yesterday’s growth of the British pound was driven by investor attention to the announcement of the finished budget. Accelerating consumer and producer inflation also supports the national currency in anticipation of stronger monetary policy tightening.

• Support levels: 1.3208, 1.3140, 1.3015, 1.2989, 1.2863
• Resistance levels: 1.3274

On the hourly time frame, the GBP/USD currency pair trend has changed to bullish. The price is confidently fixed above the moving averages. The MACD indicator has become positive, with no signs of reversal. Under such market conditions, buy deals should be considered from the support level of 1.3208, but better with confirmation. For sell deals, it is better to consider the resistance level of 1.3274, but only with short targets.

Alternative scenario: if the price breaks down through the 1.3016 support level and fixes below, the mid-term uptrend will likely be broken.

• – UK Consumer Price Index (m/m) at 09:00 (GMT+2);
• – UK BoE Gov Bailey Speaks at 14:00 (GMT+2);
• – UK Annual Budget Release at 14:30 (GMT+2).

The USD/JPY currency pair

• Prev Open: 119.45
• Prev Close: 120.80
• % chg. over the last day: +1.13%

The monetary policy of the Bank of Japan is now aimed at large-scale stimulation to the economy, which harms the national currency. High commodity prices are also a negative factor for the yen as Japan imports most of its energy. Considering that the US Federal Reserve System has already begun to raise the interest rates and plans to do 6-7 more at each of the meetings, this situation favors the growth of USD/JPY quotes in the mid-term.

• Support levels: 119.96, 119.52, 118.58, 118.06
• Resistance levels: 121.52, 122.17

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 on several time frames, which means that a corrective move down is close. Under such market conditions, it is best to look for buy deals after a pullback, as the price has strongly deviated from the moving averages. A support level of 119.96 would be the best, but with additional confirmation. The resistance level of 121.52 can be considered for sell deals, but only after the sellers’ initiative.

Alternative scenario: if the price fixes below 118.59, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2591
• Prev Close: 1.2570
• % chg. over the last day: -0.17%

The fundamental picture for the Canadian dollar remains the same. 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 oil prices and the dollar index. Oil prices continue to rise as Europe tries to cut oil and gas supplies from Russia. Crude oil inventories are very low by historical standards, so any disruption to global supplies would significantly impact prices. At the same time, rising inflation in Canada increases the likelihood of more aggressive interest rates increases. All these factors contribute to strengthening the Canadian currency (decrease in USD/CAD quotes).

• Support levels: 1.2555, 1.2517
• Resistance levels: 1.2655, 1.2713, 1.2754, 1.2851

In terms of technical analysis, the USD/CAD currency pair trend is bearish. The MACD indicator has become inactive, sellers’ pressure is decreasing, there are signs of divergence. The narrowing of liquidity in the form of a triangle indicates a soon impulse movement. It is worth trading only with short targets because on the USD/CAD currency pair fundamentally, there are no prerequisites for a medium-term trend, as the dollar index also has the support of the Fed in the medium term. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2555, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2655.

Alternative scenario: if the price breaks through and consolidates above 1.2713, the downtrend will likely be broken.