The EUR/USD currency pair

• Prev Open: 1.0056
• Prev Close: 1.0020
• % chg. over the last day: -0.36%

Yesterday EUR/USD dropped below 1 for the first time in 20 years after Italian Prime Minister Mario Draghi’s party in the coalition government did not support the parliament’s vote of confidence, following which Draghi announced his resignation. However, the Italian president rejected the resignation. Inflation data will be released in Italy today. Analysts expect to see consumer prices rise by another 1.2%. The Federal Reserve officials Waller and Bullard said yesterday that they favor a 75 basis point hike at the July Central Bank meeting, making a more aggressive move of 100 basis points less likely. Still, analysts believe the US Dollar Index will continue to rise as the dollar benefits from higher rate hike prospects than other global central banks, including the European Central Bank.

• Support levels: 1.0000
• Resistance levels: 1.0074, 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. The situation remains the same. At the moment, the price is trading below the moving averages, and the MACD indicator is in the negative zone, but the divergence is already observed on several timeframes. Under such market conditions, sell deals can be considered from the resistance level of 1.0174 or 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 1.0221 resistance level and fixes above, the uptrend will likely resume.

• – Eurozone Italian Consumer Price Index (m/m) at 11:00 (GMT+3);
• – US Retail Sales (m/m) at 15:30 (GMT+3);
• – US NY Empire State Manufacturing Index (m/m) at 15:30 (GMT+3);
• – US Industrial Production (m/m) at 16:15 (GMT+3);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1889
• Prev Close: 1.1822
• % chg. over the last day: -0.57%

Despite positive UK GDP data from last month, key indicators of consumer confidence in the country remain low. Household spending is rising, and incomes are not keeping up with this growth. Nevertheless, economists are optimistic and confident that the UK economy will not face a recession this year, despite record levels of inflation, which is expected to peak in the fall. Goldman Sachs predicts that the positive GDP momentum will continue in the coming months and expects a GDP growth of 0.4% in the third quarter.

• 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 situation is similar to the euro. 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 1.2003 resistance level and fixes above, the uptrend will likely resume.

The USD/JPY currency pair

• Prev Open: 137.29
• Prev Close: 138.94
• % chg. over the last day: +1.20%

The dollar has jumped to a 24-year high against the Japanese yen as the Central Bank of Japan maintains a dovish stance. The huge gap between interest rates and the diametrically opposed monetary policy between Japan and the US has already pushed the USD/JPY to multi-year highs. Japan’s government is once again concerned about the yen’s sharp drop and will monitor the currency market with even more urgency, working closely with the Bank of Japan, Chief Cabinet Secretary Hirokazu Matsuno said on Thursday. But Mr. Matsuno would not comment on the issue of currency intervention. The Bank of Japan is expected to keep interest rates ultra-low at its next meeting on July 20-21, highlighting a growing divergence from the global wave of central bank rate hikes.

• Support levels: 138.12, 137.44, 137.12, 136.48, 135.92, 135.40, 134.64, 134.11
• Resistance levels: 139.10

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. Under such market conditions, it is best to wait for a slight pullback, as the price has deviated strongly from the average values. Buy trades can be searched for within a day from the support level of 138.12, but with confirmation. A resistance level of 139.90 may be considered for selling, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes below 136.48, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2970
• Prev Close: 1.3115
• % chg. over the last day: +1.17%

The Canadian dollar is a commodity currency and depends not only on the monetary policy of the Bank of Canada but also on the dynamics of the US Dollar Index and oil prices. Yesterday in the morning, the US Dollar Index rose sharply, while oil prices fell by $9. As a result, the price of USD/CAD jumped. But by the end of the day, oil prices leveled off, and the dollar rebounded from its highs, which led to a slight correction in the USD/CAD. At the moment, the central banks in the US and Canada are on a path to raising interest rates, and the size of interest rates is equivalent, so no medium-term trends should be expected here.

• Support levels: 1.3060, 1.3024, 1.2959
• Resistance levels: 1.3154, 1.3236

In terms of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is trading above the moving averages again, but there are weak signs of divergence. Under such market conditions, it is best to look for buy trades on the lower time frames after a slight pullback to the support level of 1.3060 or 1.3024, but with confirmation. For sell deals, it is best to consider the resistance level of 1.3154, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below the 1.2934 support level, the downtrend will likely resume.

• – Canada Retail Sales (m/m) at 15:30 (GMT+3).