The EUR/USD currency pair

• Prev Open: 1.0716
• Prev Close: 1.0617
• % chg. over the last day: -0.93%

On Thursday, the European Central Bank reiterated its intention to raise interest rates at next month’s policy meeting and lowered its growth forecasts. The ECB announced its intention to raise key interest rates by 25 basis points at its July meeting. The extent of further hikes will depend on the changing trajectory of the medium-term inflation outlook. The ECB also lowered its growth forecasts and revised its inflation forecasts upward. Annual inflation is now expected to reach 6.8% in 2022, 3.5% in 2023 and 2.1% in 2024. This is significantly higher than the March forecasts.

• Support levels: 1.0627, 1.0611, 1.0568, 1.0509, 1.0445, 1.0379
• Resistance levels: 1.0680, 1.0723, 1.0770, 1.0869

From a technical point of view, the trend on the EUR/USD currency pair on the hour timeframe is still bullish. But the price fell yesterday after the ECB meeting, as investors initially expected a more aggressive rate hike scenario. Prices fell below the moving averages and reached the priority change level. Under such market conditions, investors can look for buy trades on intraday time frames from the support level of 1.0627, but only with confirmation and short targets. Sell trades can be considered from the resistance level of 1.0680, 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.

• – Eurozone Spanish Consumer Price Index (m/m) at 10:00 (GMT+3);
• – US Consumer Price Index (m/m) at 15:30 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 16:45 (GMT+3);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2532
• Prev Close: 1.2495
• % chg. over the last day: -0.29%

The British Chambers of Commerce said yesterday that UK economic growth would stall and inflation would be 10%. At the same time, the UK’s economic growth in 2023 is projected to be the worst in almost all G20 countries (except Russia). This year’s expectations for investment growth have also been lowered from 3.5% to 1.8%. The group also said that the UK is threatened by rising interest rates and taxes as well as high inflation, which drives up gasoline prices and energy costs.

• Support levels: 1.2477, 1.2433, 1.2398, 1.2283, 1.2199
• Resistance levels: 1.2505, 1.2628, 1.2669, 1.2698, 1.2770

The GBP/USD currency pair trend is bullish on the hourly time frame. The MACD indicator became negative, and a slight seller’s pressure is still present. A wide price corridor is forming now, and the price is trading on its lower boundary. Under such market conditions, buy deals may be considered from the support level of 1.2477, but only with additional confirmation and short targets. Sell deals should be looked for from the resistance level of 1.2505, but with confirmation.

Alternative scenario: if the price breaks down through the 1.2433 support level and fixes below, the mid-term downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 134.23
• Prev Close: 134.37
• % chg. over the last day: -0.10%

The fundamental picture of 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. Meanwhile, the Bank of Japan is not expected to change its policy next week. Perhaps the only possibility of a significant bearish reversal of the USD/JPY pair will be a currency intervention by the Japanese government. However, Japanese Finance Minister Suzuki denied yesterday the rumors of currency intervention.

• Support levels: 133.00, 132.00, 131.00, 130.12, 129.48, 128.76, 128.10, 127.64
• Resistance levels: 134.45, 135.16

The medium-term trend on the USD/JPY currency is bullish. The price is growing steadily, and the MACD indicator is in the positive zone, but there are signs of price slowing down and divergence. It is best to wait for a slight correction, as the price has deviated strongly from the average lines. Buy trades can be considered from the support level of 133.00, but with confirmation. A resistance level of 135.16 is good for sell deals, but only with additional confirmation in the form of a reverse initiative and short targets.

Alternative scenario: If the price fixes below 130.99, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2551
• Prev Close: 1.2698
• % chg. over the last day: +1.17%

Bank of Canada Governor Tiff Macklem talked mostly about households and the overheated real estate market in his speech yesterday. “Strong demand for additional living space, low-interest rates, inadequate supply, increased investor activity, and expectations of future price increases all led to a hot market during the pandemic. Housing prices have risen an average of about 50% since the pandemic began,” Macklem said. Also, he added that because inflation is well above the 2% target and Canada’s economy is overheated, the Bank’s number one priority is to get inflation back to the target level. For that reason, the Bank is aggressively raising interest rates.

• Support levels: 1.2685, 1.2618, 1.2578, 1.2510
• Resistance levels: 1.2736, 1.2765, 1.2807, 1.2893, 1.2953

The USD/CAD currency pair is bearish in terms of technical analysis. But the quotes increased sharply yesterday on the background of the dollar index growth. The MACD indicator is in the overbought area. The price has consolidated above the moving lines and approached the priority change level. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2618 or 1.2578, where the bullish initiative started. For sell deals, it is better to consider the resistance level of 1.2736, but also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates above 1.2736, the uptrend will likely resume.

• – Canada Unemployment Rate (m/m) at 15:30 (GMT+3).