The EUR/USD currency pair

• Prev Open: 1.0515
• Prev Close: 1.0408
• % chg. over the last day: -1.02%

ECB member Kazimir said yesterday that he sees a clear need for a 50 basis point rate hike in September. Such hawkish rhetoric from ECB officials is very rare. This means that sentiment within the bank is driven by a more aggressive tightening of monetary policy. On the other hand, according to WSJ, Fed officials may approve a 0.75% interest rate hike this week. Such an announcement led to an even stronger US dollar.

• Support levels: 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 is bearish. The price is steadily declining. The MACD indicator is in the negative zone with signs of oversold and divergence. 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 1.0509 or 1.0563, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.0379, 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.

• – Eurozone German Consumer Price Index (m/m) at 09:00 (GMT+3);
• – Eurozone German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• – Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
• – US Producer Price Index (m/m) at 15:30 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2310
• Prev Close: 1.2132
• % chg. over the last day: -1.46%

The Bank of England will hold its monetary policy meeting this week. Analysts think that the Bank of England will raise the rate by 25 basis points for the fourth time as policymakers continue to balance the risk of persistently high inflation against growth uncertainty. However, the combination of Friday’s US inflation surprise and hawkish statements from European Central Bank officials means that investors expect a 75 basis point rate hike in the next two meetings, and predict that the Bank of England rate will reach nearly 3.5% by this time next year. This is despite the fact that the Bank of England said at its last meeting in May that market expectations were exaggerated.

• Support levels: 1.2127, 1.1974
• Resistance levels: 1.2199, 1.2265, 1.2363, 1.2422, 1.2470, 1.2523, 1.2629

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The MACD indicator is in the negative zone with signs of oversold and divergence. 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 1.2265, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.2127, 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 Average Earnings Index (m/m) at 09:00 (GMT+3);
• – UK Claimant Count Change (m/m) at 09:00 (GMT+3);
• – UK Unemployment Rate (m/m) at 09:00 (GMT+3).

The USD/JPY currency pair

• Prev Open: 134.32
• Prev Close: 134.39
• % chg. over the last day: +0.05%

The fundamental picture of the USD/JPY currency pair remains the same. The Federal Reserve is tightening the policy, while Japan is holding an accommodative monetary policy. The interest rate differential in favor of placing dollars against the yen is rising sharply. As a result, the dollar index is rising, and the Japanese yen is getting cheaper. The Japanese public is very indignant about the weakening of the yen. Since the elections to the upper house will be held in July, the government is very attentive to public concerns. As a result, yesterday, the Japanese government and the central bank issued a rare joint statement expressing concern about the yen’s sharp decline. Some investors fear either currency intervention or indecision to hold bond yields.

• Support levels: 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. But there are signs of slowing growth, and divergence is already observed in 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 132.00, 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 132.00, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2780
• Prev Close: 1.2897
• % chg. over the last day: +0.92%

The USD/CAD currency pair grows for the fifth day in a row. Even a rise in oil prices on Monday could not give confidence to the Canadian currency, which is a commodity currency, as the rise in the dollar index is supported by the hawkish intentions of the Federal Reserve to raise the interest rate by 75 basis points tomorrow.

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

In terms of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is steadily growing but has reached an important resistance level now. 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 1.2815 or 1.2765. For sell deals, it is better to consider the resistance level of 1.2893, 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.