The EUR/USD currency pair

• Prev Open: 1.0462
• Prev Close: 1.0583
• % chg. over the last day: +1.15%

The minutes of the European Central Bank’s April monetary policy meeting showed that inflation concerns prompted dovish central bank officials to support a 0.25-point rate hike as early as July. The rest of the representatives favor an immediate 0.5% hike. At the same time, net asset purchases will cease in late June. As the market began to consider the risks of a 0.5% interest rate hike, the euro began to strengthen.

• Support levels: 1.0545, 1.0509, 1.0445, 1.0379, 1.0342
• Resistance levels: 1.0595, 1.0646, 1.0723, 1.0766, 1.0799, 1.0869

From a technical point of view, the trend on the EUR/USD currency pair on the hour timeframe has changed to bullish. The price broke through the priority change level and consolidated above the moving averages. The MACD indicator became positive, but a divergence appeared. Under such market conditions, investors can look for buy trades on intraday time frames from the support level of 1.0545, but only with short targets and confirmation. Sell trades can be considered from the resistance level of 1.0595, but only after the additional confirmation.

Alternative scenario: if the price breaks out through the 1.0445 support level and fixes below, the downtrend will likely resume.

The GBP/USD currency pair

• Prev Open: 1.2335
• Prev Close: 1.2470
• % chg. over the last day: +1.09%

Consumer sentiment in the UK has fallen to its lowest level since 1974. Consumers are increasingly pessimistic about the economy amid a deepening cost-of-living crisis. Investor fears are growing that the UK, like the US, is facing a recession. The inflationary blow to living standards is already forcing consumers to tighten their belts as rising prices for necessities such as food, fuel, and energy are forcing them to cut other costs.

• Support levels: 1.2437, 1.2398, 1.2283, 1.2199
• Resistance levels: 1.2485, 1.2519, 1.2602, 1.2695, 1.2792, 1.2981

On the hourly time frame, the GBP/USD currency pair trend changed to bullish. The MACD indicator became positive, but divergence appeared. Under such market conditions, buy deals may be considered from the support level of 1.2398, but only with additional confirmation. Sell deals should be looked for from the resistance level of 1.2485, but with confirmation in the form of sellers’ initiative.

Alternative scenario: if the price breaks down through the 1.2282 support level and fixes below, the mid-term downtrend will likely resume.

• – UK Retail Sales (m/m) at 09:00 (GMT+3).

The USD/JPY currency pair

• Prev Open: 128.13
• Prev Close: 127.82
• % chg. over the last day: -0.24%

Core consumer inflation in Japan reached a central bank’s target of 2% (2.1% year on year) in April, reaching a seven-year high as rising energy and commodity prices led to wider price increases. Rising prices are exacerbating public concerns about the high cost of living. The Bank of Japan must now respond by pursuing a soft monetary policy to boost the inflation rate. The Japanese yen may be strengthening not only as a safe-haven currency but also because the Bank of Japan may soon abandon its loose monetary policy.

• Support levels: 127.46, 126.91, 126.00, 125.57
• Resistance levels: 127.94, 128.45, 128.73, 129.07, 130.12, 130.99

The medium-term trend on the USD/JPY currency has changed to bearish. The MACD indicator is in the negative zone, and sellers’ pressure prevails, but there are signs of divergence. Buy trades can be considered from the support level of 127.46, but with confirmation. Resistance level of 127.94 may be considered for sell deals, but only with additional confirmation.

Alternative scenario: If the price fixes above 129.07, the uptrend will likely resume.

• – Japan National Core Consumer Price Index at 02:30 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.2885
• Prev Close: 1.2822
• % chg. over the last day: -0.49%

Given the rise in oil prices and the fact that the Bank of Canada will raise interest rates at its next meetings – all of these factors are positive for the Canadian dollar, which has been strengthening in recent days. Currently, the Bank of Canada and the US Federal Reserve hold key rates at 1%. This parity suggests that traders should not expect medium-term trends in the USD/CAD currency pair, as both currencies are inclined to rise now.

• Support levels: 1.2789, 1.2774, 1.2692, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.2858, 1.2859, 1.2953, 1.3000, 1.3052

The USD/CAD currency pair is bearish in terms of technical analysis. The MACD indicator is in the negative zone, but it moves towards zero. At the same time, there is a divergence, which is a sign of sellers’ weakness. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2774, but only with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2826, but also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates above 1.2953, the uptrend will likely resume.