by JustForex
The EUR/USD currency pair
- Prev Open: 1.0847
- Prev Close: 1.0831
- % chg. over the last day: -0.15%
The annual consumer price index in Europe unexpectedly declined in April from 7.5% to 7.4%. At the same time, the core inflation rate, which excludes food and energy prices, fell from 3.0% to 2.9%. The euro jumped sharply yesterday on this data. But after Jerome Powell’s speech, the euro fell again. Analysts believe that the ongoing war in Ukraine will continue to cause energy and food prices to rise, which will eventually lead to higher inflation in the region. European Central Bank President Christine Lagarde said the ECB may have to cut its growth forecast even further as the effects of Russia’s invasion of Ukraine take a toll on households and businesses.
- Support levels: 1.0835, 1.0800, 1.0772
- Resistance levels: 1.0870, 1.0907, 1.0958, 1.1027, 1.1196, 1.1291
From the technical point of view, EUR/USD currency pair trend on the hourly time frame is bearish. But against the backdrop of a decrease in the rate of inflation, buyers of the European currency appeared. The MACD indicator has become inactive. Under such market conditions, it is possible consider buy trades on intraday timeframes from the support level of 1.0800, but only with short targets and confirmation. Sell trades should be considered from the resistance level of 1.0870 or 1.0907, but only after the additional confirmation.
Alternative scenario: if the price breaks out through the 1.0958 resistance level and fixes above, the uptrend will likely resume.
- – German Manufacturing PMI (m/m) at 10:30 (GMT+3);
- – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
- – Eurozone ECB President Lagarde Speaks at 16:00 (GMT+3);
- – US Manufacturing PMI (m/m) at 16:45 (GMT+3).
The GBP/USD currency pair
- Prev Open: 1.3049
- Prev Close: 1.3026
- % chg. over the last day: -0.17%
According to Bank of England Governor Andrew Bailey, governments should be prepared to accept economic hardship as payment for forcing Russia to end the war in Ukraine. Skyrocketing energy prices and supply chain problems since the war began in February are exacerbating declining incomes and threatening the deepest cost-of-living crisis in Britain since the 1950s. According to Bailey, the Bank of England is balancing between fighting inflation and preventing economic growth from falling. The governor also expressed concern about rising food prices and wondered if the UK labor market would slow in the event of a recession, as staff shortages are still very acute.
- Support levels: 1.3011, 1.2993
- Resistance levels: 1.3094, 1.3115, 1.3147, 1.3244, 1.3274
On the hourly time frame, the GBP/USD currency pair trend is still bearish. The MACD indicator has become inactive, the price pullback to the moving averages. Under such market conditions, sell trades should be looked for from the resistance level of 1.3094, but with confirmation. For buy deals, traders may consider the level of 1.3011, but only after the appearance of a bullish initiative and with short targets.
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Alternative scenario: if the price breaks down through the 1.3147 resistance level and fixes above, the mid-term uptrend will likely be resumed.
- – UK Retail Sales (m/m) at 09:00 (GMT+3);
- – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
- – UK BoE Gov Bailey Speaks at 17:30 (GMT+3).
The USD/JPY currency pair
- Prev Open: 127.93
- Prev Close: 128.38
- % chg. over the last day: +0.35%
Japan’s nationwide consumer price index was 0.8% y/y (previous 0.6%). The ultra-soft policy of the Bank of Japan contributes to the growth of inflation towards the target of 2%, but the growth rate is extremely low. At the moment many analysts believe that a sharp decline in the yen will have a far more negative impact on the economy than the country’s low inflation rate. The Bank of Japan on Wednesday entered the government bond market and carried out a number of operations to prevent the yield from rising above the 0.1% mark. Thus, a technical correction in USD/JPY can be expected in the near future.
- Support levels: 126.69, 125.72, 124.66, 124.24, 122.97, 122.63, 121.81
- Resistance levels: 128.84, 129.36
The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator has become inactive, but the divergence is still visible on the higher timeframes. The price is trading in a narrow corridor. Under such market conditions, it is best to look for buy deals, expecting the continuation of the uptrend, but after the price makes a pullback to the average lines and the nearest support levels. First of all, it is worth considering the support level of 126.69, but with additional confirmation. A resistance level of 128.84 may be considered for sell deals, but only with short targets.
Alternative scenario: If the price fixes below 124.66, the uptrend will likely be broken.
- – Japan National Core Consumer Price Index at 02:30 (GMT+3).
The USD/CAD currency pair
- Prev Open: 1.2498
- Prev Close: 1.2582
- % chg. over the last day: +0.67%
The Canadian dollar is a commodity currency, and is highly dependent on the dynamics of oil prices and the dollar index. The dollar index jumped sharply yesterday in the background of the statements of the Federal Reserve System officials, while oil prices remained at the same level. As a result, the USD/CAD currency pair rose sharply. At the moment, there are no fundamental prerequisites for a medium-term trend.
- Support levels: 1.2509, 1.2467
- Resistance levels: 1.2600, 1.2644, 1.2713, 1.2754, 1.2851
The USD/CAD currency pair is bullish in terms of technical analysis. The price rebounded sharply from the priority change level, the buyers defended their positions. The MACD indicator has become positive, with no signs of reversal. Trade is worth it only with short targets. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2509, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2600 or 1.2645, but it is also better with confirmation.
Alternative scenario: if the price breaks through and consolidates below 1.2467, the downtrend will likely be resumed.
- – Canada Retail Sales (m/m) at 15:30 (GMT+3).
by JustForex
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
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