The EUR/USD currency pair

• Prev Open: 1.0181
• Prev Close: 1.0161
• % chg. over the last day: -0.20%

The US dollar declined in the European session on Thursday but remained near a 20-year high yesterday as the Federal Reserve remained hawkish. Many factors are contributing to the dollar’s rise, but the main among them is an aggressive tightening of monetary policy by the US Central Bank. Fed’s last meeting minutes, released on Wednesday, indicated another 75 basis point hike in July. According to analysts, if Europe and the US fall into recession in the third quarter while the Fed continues to raise rates, the EUR/USD exchange rate will fall below 1. The published minutes of the European Central Bank’s June meeting suggest the door is still open for a rate hike of more than 25 basis points at the upcoming July 21 meeting. But for now, the baseline scenario of the ECB raising interest rates by 25 bps in July and another 50 bps in September has the highest probability.

• Support levels: 1.0135
• Resistance levels: 1.0221, 1.0284, 1.0365, 1.0415, 1.0504, 1.0564, 1.0611

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. At the moment, the price is trading below the moving averages, and the MACD indicator is in the negative zone, but there is a strong divergence. Under such market conditions, sell deals can be considered from the resistance level of 1.0221 or 1.0284, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.0135, but only with confirmation and short targets.

Alternative scenario: if the price breaks out through the 1.0415 resistance level and fixes above, the uptrend will likely resume.

• – Eurozone ECB President Lagarde Speaks at 14:55 (GMT+3);
• – US Nonfarm Payrolls (m/m) at 15:30 (GMT+3);
• – US Unemployment Rate (m/m) at 15:30 (GMT+3);
• – US FOMC Member Williams Speaks at 18:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1921
• Prev Close: 1.2023
• % chg. over the last day: +0.86%

Boris Johnson announced that he is stepping down as British Prime Minister. But this did not affect the British pound, on the contrary, the British currency increased yesterday. Traders and investors had already expected this move after dozens of senior ministers resigned in recent days in protest against Johnson’s leadership. Growing obstacles on the macroeconomic front for the UK and monetary policy divergence between the US Federal Reserve and the Bank of England will continue to be the main catalysts for price movements on the GBP/USD currency pair.

• Support levels: 1.1985, 1.1929
• Resistance levels: 1.2065, 1.2095, 1.2137

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The euro and the pound do not correlate at the moment, with the pound showing more resilience. The price is trading below the moving averages, the MACD indicator has become positive, and there is buying pressure. Under such market conditions, sell deals can be considered from the resistance level of 1.2065, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.1985 or 1.1929, but only with confirmation and short targets.

Alternative scenario: if the price breaks out through the 1.2137 resistance level and fixes above, the uptrend will likely resume.

The USD/JPY currency pair

• Prev Open: 135.92
• Prev Close: 136.01
• % chg. over the last day: +0.15%

Terrible news came from Japan. During the speech of the former Japanese Prime Minister Shinzo Abe, there was an attempted attack on the Prime Minister, as a result of which, according to preliminary information, Abe suffered a cardiac arrest from his injuries. Shinzo Abe is now in hospital, and his condition is unknown. Several other people were also injured. The suspect has been arrested. The Japanese yen reacted to this event with slight growth.

• Support levels: 135.40, 134.64, 134.11, 133.35, 131.67, 131.00, 130.12, 129.48, 128.76
• Resistance levels: 135.87, 136.48

From the technical point of view, the medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator has become inactive, and the price continues to form a wide balance. Under such market conditions, buy trades can be considered from the support level of 135.40, but with confirmation. A resistance level of 136.48 is good for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes below 133.35, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3045
• Prev Close: 1.2966
• % chg. over the last day: -0.61%

The outlook for the Canadian dollar is becoming less optimistic due to growing recession fears. Many analysts believe the Canadian dollar has strengthened throughout the year due to rising oil prices. Oil has fallen about $25 in recent weeks, diving below $100 a barrel, and Canada’s commodity-linked stock market has fallen by 15% below its March record high. However, it should be noted that the Bank of Canada has been aggressively raising interest rates during this time to keep up with the US Federal Reserve’s fight against inflation. Meanwhile, the Bank of Canada intends to raise its overnight rate by 75 basis points next week and another 50 bps in September. Currently, the risks are shifting to a lower Canadian dollar if a recession in the US occurs before Canada and oil prices continue to fall.

• Support levels: 1.2959, 1.2934, 1.2894
• Resistance levels: 1.3021, 1.3052

In terms of technical analysis, the trend on the USD/CAD currency pair is bullish. The price has corrected to the average values, and the MACD indicator has become inactive. Under such market conditions, it is best to look for buy trades on the lower time frames from the support level of 1.2959 or 1.2934. For sell deals, it is best to consider the resistance level of 1.3021, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below the 1.2894 support level, the downtrend will likely resume.

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