The EUR/USD currency pair

• Prev Open: 1.0164
• Prev Close: 1.0168
• % chg. over the last day: +0.04%

The US Dollar Index rose on Wednesday after data showed an unexpected recovery in US PMI services in July, which provided further support for the currency after hawkish comments from Federal Reserve officials on Tuesday. With the US Federal Reserve tightening monetary policy, the US dollar is both a source of growth and a safe haven for investors, especially during a war between Ukraine and Russia and new geopolitical tensions between China and Taiwan.

• Support levels: 1.0112, 1.0035, 1.0000
• Resistance levels: 1.0179, 1.0264, 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 bullish. The price is still forming a wide volatile balance, but buyers’ pressure has changed to sellers’ initiative. The MACD indicator has become negative. Under such market conditions, buy trades are best sought on intraday time frames from the support level of 1.0112. Sell trades can be considered from the resistance level of 1.0179, but only after additional confirmation and only with short targets.

Alternative scenario: if the price breaks down through the 1.0112 support level and fixes below, the downtrend will likely resume.

• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US FOMC Member Mester Speaks (m/m) at 19:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2164
• Prev Close: 1.2146
• % chg. over the last day: -0.15%

The Bank of England is preparing for its biggest interest rate hike in 27 years because of rising inflation. The BoE is expected to raise interest rates by 50 basis points today, the most considerable increase since 1995. The probability of such a scenario is 70%. So, if 50 basis points raise the rate, the cost of borrowing will rise to 1.75%. This scenario is likely already priced in, and the most important event will be the speech of the governor of the Bank of England, Andrew Bailey. He will voice his views on further easing monetary policy and how quickly the Bank of England will reduce its balance sheet.

• Support levels: 1.2114, 1.2114, 1.2063, 1.1907, 1.1803
• Resistance levels: 1.2167, 1.2209, 1.2294

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame is bullish. The price is now balanced and trading between the moving averages. The MACD indicator is in the negative zone, and there is an initiative from the sellers. Under such market conditions, it is better to look for buy trades on the intraday time frames from the support level of 1.2114, but only with confirmation since the level was tested yesterday. Sell trades can be considered from the resistance level of 1.2167 or 1.2209, but only after additional confirmation and with short targets.

Alternative scenario: if the price breaks down through the 1.2063 support level and fixes below, the downtrend will likely resume.

• – UK Construction PMI (m/m) at 11:30 (GMT+3);
• – UK BoE Inflation Report (m/m) at 14:00 (GMT+3);
• – UK BoE Interest Rate Decision (m/m) at 14:00 (GMT+3);
• – UK BoE Monetary Policy Statement (m/m) at 14:00 (GMT+3);
• – UK BoE Gov Bailey Speaks at 14:30 (GMT+3).

The USD/JPY currency pair

• Prev Open: 133.14
• Prev Close: 133.85
• % chg. over the last day: +0.53%

The USD/JPY currency pair is returning to an upward movement amid renewed dollar growth. Fundamentally, the difference in the interest rates and diametrically opposite monetary policies between the United States and Japan contributes to the growth of quotes. Most likely, no significant changes are planned before the end of the year.

• Support levels: 132.12, 131.37, 130.85
• Resistance levels: 135.29, 136.03, 137.11

From the technical point of view, the medium-term trend on the USD/JPY currency pair is bearish. But in the last two trading sessions, the dollar is getting stronger, and now the price is trading between the moving averages. The MACD indicator is in the positive zone, and buyer pressure is increasing. Under such market conditions, buy trades can be sought from the support level of 132.12, but with additional confirmation. Resistance levels of 135.29 may be considered for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes above 135.29, the uptrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2874
• Prev Close: 1.2840
• % chg. over the last day: -0.26%

The Canadian dollar is a commodity currency that highly depends on the US Dollar Index and oil prices. Oil prices decreased by 3% yesterday after an unexpected 4.5 million barrels increase in inventories last week (forecast +600K), while the US Dollar Index increased on rising geopolitical tensions in Asia. As a result, the USD/CAD quotes demonstrated growth, but the end of the trading day was for the Canadian. Investors should consider the fact that the interest rates of the Bank of Canada and the US Federal Reserve are now at the same level. This means traders should not expect medium-term trends in this currency pair.

• Support levels: 1.2803, 1.2786
• Resistance levels: 1.2880, 1.2929, 1.3006, 1.3085, 1.3154

In terms of technical analysis, the USD/CAD currency pair trend is bearish. At the moment, the price is forming a wide balance. The MACD indicator became positive, and there was an initiative of buyers. Under such market conditions, it is better to consider sell deals from the resistance level of 1.2880, but with confirmation. Buy trades should be considered on the lower time frames from the support level of 1.2803 or 1.2789, but only with confirmation and short targets.

Alternative scenario: if the price breaks out and consolidates above the 1.2929 resistance level, the uptrend will likely resume.