The EUR/USD currency pair

• Prev Open: 1.0514
• Prev Close: 1.0379
• % chg. over the last day: -1.30%

The US producer price index also called factory inflation or wholesale inflation, has jumped to 11% year on year. Last month’s increase was 0.5%. According to many analysts, the producer price index is a more accurate indicator of the inflation faced by businesses and retailers who suffer the most from supply chain disruptions. The initial jobless claims increased to 203,000 (+1,000 for the last week). A strong labor market amid rising inflation is the first sign of an impending recession.

• Support levels: 1.0342
• Resistance levels: 1.0484, 1.0588, 1.0646, 1.0723, 1.0766, 1.0799, 1.0869, 1.0955

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is still bearish. The MACD indicator became negative, but the sellers’ pressure increased. Under such market conditions, traders can look for sell deals from the resistance level of 1.0484, but only after the additional confirmation. Buy trades can be considered on intraday timeframes from the support level of 1.0342, but only with short targets and confirmation.

Alternative scenario: if the price breaks out through the 1.0588 resistance level and fixes above, the uptrend will likely resume.

• – Eurozone French Consumer Price Index (m/m) at 09:45 (GMT+3);
• – Eurozone Spanish Consumer Price Index (m/m) at 10:00 (GMT+3);
• – Eurozone Industrial Production (m/m) at 12:00 (GMT+3);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3);
• – US FOMC Member Mester Speaks at 19:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2247
• Prev Close: 1.2194
• % chg. over the last day: -0.44%

According to analysts, the UK is already showing signs of stagflation (slowing economic growth with rising consumer prices). The Bank of England will likely have to raise interest rates further to curb inflation, warns Bloomberg manager Dave Ramsden.

• Support levels: 1.2127
• Resistance levels: 1.2265, 1.2265, 1.2450, 1.2519, 1.2602, 1.2695, 1.2792, 1.2981

On the hourly time frame, the GBP/USD currency pair trend is still bearish. The price continues to decline, but the MACD indicator shows signs of divergence. Under such market conditions, sell trades should be looked for from the resistance level of 1.2265 intraday. For buy deals, traders may consider the level of 1.2127, but only with additional confirmation in the form of a buyers’ initiative.

Alternative scenario: if the price breaks down through the 1.2450 resistance level and fixes above, the mid-term uptrend will likely be resumed.

The USD/JPY currency pair

• Prev Open: 129.95
• Prev Close: 128.31
• % chg. over the last day: -1.27%

The Japanese yen unexpectedly strengthened yesterday. Concerns about continued stagflation amid slow growth and high prices have led many investors to buy safe-haven currencies. With the dollar index at 20-year highs, the Japanese yen is now a better asset to buy than the dollar. But yesterday, the Bank of Japan Governor Kuroda said that Japan has not yet reached the conditions under which inflation will be stable and sustainable at 2%. This means that the strengthening of the JPY might be temporary speculation, as Japan is still pursuing a soft monetary policy.

• Support levels: 128.63, 127.29, 126.91, 126.00, 125.57
• Resistance levels: 129.66, 130.12, 130.99

The medium-term trend on the USD/JPY currency pair has changed to bearish. The price has confidently broken through the priority change level and has consolidated below the moving averages. Despite the change in the trend on the hour timeframe, it is better to look for buy deals with the expectation of an uptrend continuation since the Japanese yen has no fundamental support. But as long as the price is below the moving averages, it is worth buying with short targets. First of all, it is worth considering the support level of 128.63, but with confirmation. A resistance level of 129.66 or 130.12 may be considered for sell deals, but only with additional confirmation.

Alternative scenario: If the price fixes above 130.99, the uptrend will likely be resumed.

The USD/CAD currency pair

• Prev Open: 1.2985
• Prev Close: 1.3044
• % chg. over the last day: +0.45%

The Canadian dollar is a commodity currency and is highly dependent not only on the monetary policy of the Bank of Canada but also on the dynamics of the dollar index and oil prices. Oil prices continue to grow despite declining demand. The International Energy Agency (IEA) said yesterday it does not expect sharp shortages amid worsening supply disruptions from Russia. This situation favors the Canadian dollar, which is showing stability against the US dollar.

• Support levels: 1.2954, 1.2838, 1.2908, 1.2774, 1.2692, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.3052

The USD/CAD currency pair is bullish in terms of technical analysis. The price has reached the daily resistance level. The MACD indicator has become inactive, but a divergence appeared. Trade is worth it only with short targets because, fundamentally, both the dollar index and the Canadian dollar are inclined to grow. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2954, but only with additional confirmation. For sell deals, it is better to consider the resistance level of 1.3052, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below 1.2838, the downtrend will likely be resumed.