The EUR/USD currency pair

• Prev Open: 1.0616
• Prev Close: 1.0517
• % chg. over the last day: -0.94%

US inflation accelerated in May, while core inflation failed to dip below 6%. Demand continues to outpace the supply side of the US economy, and with supply factors showing no signs of short-term improvement, the Fed may raise interest rates through the end of the year. This outlook sharply increased the dollar index on Friday, causing major currencies to fall against the US dollar. On Friday, Spain also released its inflation data, which showed an increase from 8.3% to 8.7% year-over-year. German, French, and Italian inflation data will also be released this week, followed by the total Eurozone value at the end of the week.

• Support levels: 1.0445, 1.0379
• Resistance levels: 1.0509, 1.0563, 1.0611, 1.0680

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame has changed to bearish. The price confidently broke through the priority change level and consolidated below the moving averages. The MACD indicator is in the negative zone with signs of oversold. Under such market conditions, it is better to wait for a small pullback, as the price has strongly deviated from the averages. Sell deals can be considered from the resistance level 1.0563 or 1.0611, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.0445, but only with confirmation and short targets.

Alternative scenario: if the price breaks out through the 1.0680 resistance level and fixes above, the uptrend will likely resume.

• – US FOMC Member Brainard Speaks at 21:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2493
• Prev Close: 1.2315
• % chg. over the last day: -1.45%

Like the euro, the British pound fell against the dollar after Friday’s inflation data. Today the UK will release its GDP data for the quarter. GDP is expected to show a growth of 0.2%. If the actual data is worse than expected, it may be positive for the GBP as slower than expected economic growth will likely lead to a more aggressive policy from the Bank of England, which in turn will support the GBP. Traders should also pay attention to industrial production data.

• Support levels: 1.2265, 1.2199
• Resistance levels: 1.2300, 1.2363, 1.2422, 1.2470, 1.2523, 1.2629

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame has changed to bearish. The price confidently broke through the priority change level and consolidated below the moving averages. The MACD indicator is in the negative zone with signs of oversold and with no signs of reversal. Under such market conditions, it is better to wait for a small pullback, as the price has strongly deviated from the averages. Sell deals can be considered from the resistance level of 1.2363 or 1.2422, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.2265, but only with confirmation and short targets.

Alternative scenario: if the price breaks out through the 1.2523 resistance level and fixes above, the uptrend will likely resume.

• – UK GDP (q/q) at 09:00 (GMT+3);
• – UK Industrial Production (m/m) at 09:00 (GMT+3).

The USD/JPY currency pair

• Prev Open: 134.32
• Prev Close: 134.38
• % chg. over the last day: +0.04%

Japan’s monetary policy remains ultra-soft. Nevertheless, in economic terms and bank reports, there are signs that a period of tightening may be on the horizon. Governor Haruhiko Kuroda retracted his earlier comments, saying consumers have become more tolerant of higher prices. The weak yen has also exacerbated already expensive energy imports. But no changes to the bank’s yield curve management program are expected for now. Despite a rise in inflation above the 2% target, overnight index swaps (OIS) show little chance of a rate change over the next few meetings.

• Support levels: 134.44, 133.00, 132.00, 131.00, 130.12, 129.48, 128.76, 128.10, 127.64
• Resistance levels: 135.16

The medium-term trend on the USD/JPY currency pair is bullish. The price is growing steadily. The MACD indicator is in the positive zone, but there are signs of price slowing down, and divergence is already observed on several timeframes. 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 134.44, 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 132.00, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2698
• Prev Close: 1.2785
• % chg. over the last day: +0.68%

The USD/CAD currency pair rose for the fourth day in a row as lower oil prices along with a stronger US dollar contributed to the rise in quotes. Canada’s unemployment rate fell from 5.2% to 5.1%, indicating that the labor market remains strong. The fundamental picture is such that both the dollar index and the Canadian dollar have central bank support, so no medium-term trends should be expected in this currency pair.

• Support levels: 1.2765, 1.2685, 1.2618, 1.2578, 1.2510
• Resistance levels: 1.2815, 1.2893, 1.2953

In terms of technical analysis, the trend on the USD/CAD currency pair has changed to bullish. The price confidently broke through the priority change level and consolidated above. The MACD indicator shows that it is overbought, and there are signs of divergence. Under such market conditions, it is better to look for buy deals in the lower time frames from the support level of 1.2685 or 1.2618. For sell deals, it is better to consider the resistance level of 1.2815, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below the 1.2578 support level, the downtrend will likely resume.