The EUR/USD currency pair

• Prev Open: 1.0733
• Prev Close: 1.0652
• % chg. over the last day: -0.76%

The ISM Manufacturing PMI and hawkish speeches from the Fed yesterday were optimistic for the US dollar. The ISM Manufacturing PMI for May in the US was 56.1 versus expectations of 54.5 and April’s value of 55.4. The report states that supply chain and pricing issues remain major problems negatively impacting businesses. The Business Activity Index in Europe remained about the same, with the unemployment rate unchanged.

• Support levels: 1.0643, 1.0611, 1.0568, 1.0509, 1.0445, 1.0379
• Resistance levels: 1.0702, 1.0756, 1.0786, 1.0869

From a technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. But the MACD indicator is in the negative zone, and the price is close to the priority change level. Under such market conditions, investors can look for buy trades on intraday time frames from the support level of 1.0643 or 1.0611, but only with confirmation and short targets. Sell trades can be considered from the resistance level of 1.0702, but only after the additional confirmation.

Alternative scenario: if the price breaks out through the 1.0611 support level and fixes below, the downtrend will likely resume.

• – US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US FOMC Member Mester Speaks at 20:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2599
• Prev Close: 1.2484
• % chg. over the last day: -0.92%

The short-term interest rate markets assess the probability of a 25 basis point hike on June 16 with a 100% probability. The Bank of England may have to raise rates again in the future but will likely pause to reassess and see where the UK economy stands. The UK Manufacturing PMI index has remained at the same level. Thus, the attitude to the pound sterling is now shifting to the bearish side.

• Support levels: 1.2471, 1.2437, 1.2398, 1.2283, 1.2199
• Resistance levels: 1.2558, 1.2628, 1.2669, 1.2698, 1.2770

On the hourly time frame, the GBP/USD currency pair trend is bullish. But the MACD indicator became negative, and sellers’ pressure is still present. The price is trading below the moving averages but above the priority change level. Under such market conditions, buy deals may be considered from the support level of 1.2471 or 1.2437, but only with additional confirmation and short targets. Sell deals should be looked for from the resistance level of 1.2558, but with confirmation.

Alternative scenario: if the price breaks down through the 1.2437 support level and fixes below, the mid-term downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 128.61
• Prev Close: 130.15
• % chg. over the last day: +1.20%

Bank of Japan official Adachi said yesterday that the yen is not a monetary policy target, and it is too early to tighten monetary policy. The fundamental picture for the USD/JPY currency pair remains the same. The Fed is tightening monetary policy, while the Bank of Japan, on the contrary, holds a soft policy, and nothing will change in the near future. As a rule, monetary tightening leads to a strengthening of the national currency, while easing, on the contrary, leads to depreciation. As a result, the USD/JPY quotes tend to grow mid-term.

• Support levels: 129.44, 128.76, 128.10, 127.64, 127.24, 127.04
• Resistance levels: 130.06, 130.99

The medium-term trend on the USD/JPY currency is bullish. The price is steadily growing, and the MACD indicator is in the positive zone, but it is overbought. Buy trades can be considered after a small pullback, as the price has strongly deviated from the moving averages. The support level of 129.44 or 128.76 should be considered first, but with confirmation. A resistance level of 130.06 is good for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes below 127.64, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2640
• Prev Close: 1.2656
• % chg. over the last day: +0.13%

The Bank of Canada took another aggressive step in its rate hike cycle, raising the overnight interest rate by 50 basis points for the second time in a row and warning that it could use even more “strong measures” to fight inflation if necessary. The minutes also say Russia’s invasion of Ukraine, China’s isolation from COVID, and ongoing supply disruptions put pressure on activity and rising inflation. The war has heightened uncertainty and puts further upward pressure on energy and agricultural commodity prices.

• Support levels: 1.2608, 1.2566, 1.2510
• Resistance levels: 1.2676, 1.2728, 1.2765, 1.2807, 1.2893, 1.2953, 1.3000, 1.3052

The USD/CAD currency pair is bearish in terms of technical analysis, but the price began to acquire a more flat structure. The MACD indicator has become positive, and the buyer’s pressure is slowly increasing. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2608 or after the breakout of the 1.2676 resistance level. For sell deals, it is better to consider the resistance level of 1.2728 or 1.2765, but also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates above 1.2893, the uptrend will likely resume.

• – OPEC+ Meeting at 13:00 (GMT+3);
• – US Crude Oil Reserves (w/w) at 18:00 (GMT+3).