The EUR/USD currency pair

• Prev Open: 1.0037
• Prev Close: 1.0057
• % chg. over the last day: +0.20%

US inflation has beaten analysts’ expectations. The US consumer price index reached 9.1% year-on-year, compared to expectations of 8.8%. It is the highest rate since 1981. Last month’s gain was 1.3%. The Core Index (which excludes food and energy prices) reached 5.9%, with 5.7% expected. On a monthly basis, the Core CPI rose by 0.7%. European countries also saw an increase in consumer prices. Over the past month, inflation in Germany increased by 0.1%, in France by 0.7%, and in Spain by 1.5% to 10.2% on an annualized basis. Such data has hit confidence that the pace of slowing inflation in the future will be challenging. In his speech yesterday, FOMC spokesman Bostic said that a 100 basis point rate hike is also being considered by the Committee. There is a growing possibility that the ECB will also consider a 0.5% hike, although Fed Chair Christine Lagarde has argued several times that the first hike will be 0.25%.

• Support levels: 1.0000
• Resistance levels: 1.0147, 1.0221, 1.0284, 1.0365, 1.0415, 1.050

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. The MACD indicator is in the negative zone, but the divergence is already observed in several timeframes. Under such market conditions, sell deals can be considered from the resistance level of 1.0147, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.0000, but only with confirmation and short targets.

Alternative scenario: if the price breaks out through the 1.0284 resistance level and fixes above, the uptrend will likely resume.

• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Producer Price Index (m/m) at 15:30 (GMT+3);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+3);
• – US FOMC Member Waller Speaks at 18:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1884
• Prev Close: 1.1889
• % chg. over the last day: +0.04%

UK GDP unexpectedly showed a 0.5% growth in the last month, overlapping the decrease over the previous three months. Experts had expected a decline of 0.2%. At the same time, the Industrial Production Index had grown by 0.9% (expected -0.1%), while manufacturing production had added 1.5% (expected -0.6%). Such positive sentiment gave confidence to the pound sterling.

• Support levels: 1.1801
• Resistance levels: 1.1887, 1.2002, 1.2065, 1.2137

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, but there are signs of divergence. Under such market conditions, sell deals can be considered from the resistance level of 1.1887, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.1801, 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: 136.86
• Prev Close: 137.37
• % chg. over the last day: +0.35%

The situation on the USD/JPY currency pair remains the same. The huge gap between the interest rates and diametrically opposed monetary policy has already caused USD/JPY quotes to reach multi-year highs. There were suggestions that the Bank of Japan would be forced to intervene to strengthen the currency or adjust its control of the yield curve, but no such action has been taken. Japan’s central authorities are still pushing for a weaker currency. And the situation will not change soon, so traders should not count on a price reversal based on fundamental factors.

• Support levels: 137.44, 137.12, 136.48, 135.92, 135.40, 134.64, 134.11
• Resistance levels: 138.89

From the technical point of view, the medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator has become positive, the buyer’s pressure has increased, and the price continues an upward trend. But there are signs of divergence. Under such market conditions, buy trades can be considered within a day from the support level of 137.44, but with confirmation. A resistance level of 138.89 is good for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes below 135.93, the downtrend will likely resume.

• – Japan Industrial Production (m/m) at 07:30 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.3019
• Prev Close: 1.2978
• % chg. over the last day: -0.31%

The Canadian dollar strengthened after the Bank of Canada raised its benchmark interest rate by a full percentage point, surprising markets with the most significant increase since 1998. The Bank of Canada said in a statement that inflation in Canada remains more resilient than the Bank expected in its April monetary policy report and is likely to stay around 8% for the next few months. The Bank expects Canada’s economy to grow 3.5% in 2022, 1.75% in 2023, and 2.5% in 2024. Economic activity is slowing as global growth slows and monetary policy tightens. The outlook for prices suggests that inflation will begin to decline later this year, dropping to about 3% by the end of next year and returning to the 2% target by the end of 2024.

• Support levels: 1.2959, 1.2934, 1.2894
• Resistance levels: 1.3001, 1.3050, 1.3113

In terms of technical analysis, the trend on the USD/CAD currency pair is bullish. But there are signs of interception of the initiative. The price is trading below the moving averages, and there is slight pressure from the sellers. Under such market conditions, it is best to look for buy trades on the lower time frames from the support level of 1.2959, but with confirmation. For sell deals, it is best to consider the resistance level of 1.3001, 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.