The EUR/USD currency pair

• Prev Open: 1.0806
• Prev Close: 1.0711
• % chg. over the last day: -0.88%

Last week, hawkish comments from various politicians increased the risks of aggressive policy tightening by global central banks. Analysts expect the US Federal Reserve to raise interest rates by half a point at its next three meetings and the European Central Bank to raise interest rates by 25 basis points in July.

• Support levels: 1.0699
• Resistance levels: 1.0770, 1.0796, 1.0870, 1.0908, 1.0936

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. Growth in the dollar index led to the fall of the European currency. The MACD indicator has become negative, the selling pressure remains, but the price has reached the support level. Under such market conditions, it is possible to look for buy trades on intraday timeframes from the support level of 1.0699, but only with short targets and confirmation. Sell trades should be considered from the resistance level of 1.0770, but only after the additional confirmation.

Alternative scenario: if the price breaks out through the 1.0936 resistance level and fixes above, the uptrend will likely resume.

• – US Core Durable Goods Orders (m/m) at 15:30 (GMT+2);
• – US New Home Sales (m/m) at 17:00 (GMT+2);
• – US CB Consumer Confidence (m/m) at 17:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.2830
• Prev Close: 1.2741
• % chg. over the last day: -0.69%

The UK economy faces rising commodity prices and declining exports, leading to lower profits for British corporations. The Bank of England must find a middle ground to counter inflation and not put the economy into stagflation. As a result, the fundamental background for the British pound is extremely contradictory. On the one hand, the probability of a stagflation scenario puts pressure on the national rate. On the other hand, the Bank of England has already raised the interest rate three times and plans to tighten monetary policy in the future, which will positively affect the pound.

• Support levels: 1.2719
• Resistance levels: 1.2791, 1.2862, 1.2917, 1.2981, 1.3010, 1.3083, 1.3115

On the hourly time frame, the GBP/USD currency pair trend is still bearish. The MACD indicator is in the negative zone, but there are the first signs of sellers’ weakness in the form of divergence. Under such market conditions, sell trades should be looked for from the resistance level 1.2792 or 1.2863, but with confirmation. For buy deals, traders may consider the level of 1.2719, but only after the appearance of a bullish initiative and with short targets.

Alternative scenario: if the price breaks down through the 1.3083 resistance level and fixes above, the mid-term uptrend will likely be resumed.

The USD/JPY currency pair

• Prev Open: 128.53
• Prev Close: 128.12
• % chg. over the last day: -0.32%

The monetary policy of the Bank of Japan remains unchanged. The central bank uses an ultra-soft approach to push the inflation rate closer to the 2% target. The Bank of Japan will hold its next monetary policy meeting this week, but analysts do not expect changes. Thus, fundamentally, USD/JPY quotes tend to rise as the Fed tightens monetary policy, which leads to a rise in the dollar index. But traders should not forget that the Bank of Japan will enter the debt market and sell government bonds to prevent a significant depreciation of the yen in a short period of time. Therefore, a correction might occur soon.

• Support levels: 126.69, 125.48, 124.66, 122.97
• Resistance levels: 129.36

The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator has become negative. The price has taken a more flat structure. 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 nearest support levels. First of all, it is worth considering the support level of 126.69, but with additional confirmation. A resistance level of 129.36 may be considered for sell deals, but only with short targets.

Alternative scenario: If the price fixes below 125.55, the uptrend will likely be broken.

• – Japan Unemployment Rate (m/m) at 02:30 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.2711
• Prev Close: 1.2735
• % chg. over the last day: +0.20%

The Canadian dollar is a commodity currency, highly dependent on oil price dynamics and the dollar index. The dollar index continued to rise yesterday, while oil prices finished the day at the opening level. As a result, the USD/CAD currency pair traded particularly unchanged. Fundamentally, there are currently no prerequisites for a medium-term trend in USD/CAD.

• Support levels: 1.2644, 1.2607, 1.2521
• Resistance levels: 1.2776, 1.2849

In terms of technical analysis, the USD/CAD currency pair is bullish. Buying pressure has decreased, but the MACD indicator remains positive. 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 1.2644 or 1.2607, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2776, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below 1.2521, the downtrend will likely be resumed.