By JustForex
The EUR/USD currency pair
- Prev Open: 1.0175
- Prev Close: 1.0086
- % chg. over the last day: -0.88%
The Eurozone Consumer Price Index (CPI) reached 8.9% in annual terms, compared to June’s value of 8.6%. A year earlier, the figure was 2.5%. The lowest annual rates were recorded in France, Malta (both 6.8%), and Finland (8.0%). The highest annual rates were recorded in Estonia (23.2%), Latvia (21.3%), and Lithuania (20.9%). Compared to June, annual inflation declined in six members, remained stable in three, and rose in eighteen. In July, energy (+4.02%) made the largest contribution to the annual inflation rate in the Eurozone, followed by food (+2.08%). Thus, there are no signs of an inflation slowdown in the region. Analysts predict that the ECB may raise the rate by 0.75% at the next meeting.
- Support levels: 1.0035, 1.0000
- Resistance levels: 1.0146, 1.0230, 1.0286, 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. Yesterday prices started a new downward wave. The MACD indicator is in the negative zone, but there are the first signs of divergence. Under such market conditions, it is better to look for buy trades on the intraday time frames from the support level of 1.0036, but with a confirmation in the form of reverse initiative. Sell trades can be considered from resistance levels of 1.0146, but only after the additional confirmation.
Alternative scenario: if the price breaks out of the 1.0230 resistance level and fixes above, the uptrend will likely resume.
- – Germany Producer Price Index (m/m) at 09:00 (GMT+3).
The GBP/USD currency pair
- Prev Open: 1.2045
- Prev Close: 1.1929
- % chg. over the last day: -0.98%
The British pound is under pressure because of the stronger dollar index, and the negative investor sentiment about the UK economy as the country enters recession. The GfK consumer confidence index fell by three points to -44 in August, the lowest-ever reading. Today the UK is expected to report a decline in July retail sales. The swap market predicts an 80% chance of a 50 basis point hike at the Bank of England meeting in mid-September and a 75 bps hike of a 20% chance.
- Support levels: 1.1871
- Resistance levels: 1.2000, 1.2035, 1.2167, 1.2215, 1.2294
From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price is now trading below the moving averages, indicating selling pressure. The MACD indicator has become negative, and there are no signs of divergence. At the moment, it is better to look for sell trades from the resistance level of 1.2000, but only after the additional confirmation. Buy trades can be considered on intraday time frames from the support level of 1.1871, but only with confirmation.
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Alternative scenario: if the price breaks out through the 1.2167 resistance level and fixes above, the uptrend will likely resume.
- – UK Retail Sales (m/m) at 09:00 (GMT+3).
The USD/JPY currency pair
- Prev Open: 134.98
- Prev Close: 135.87
- % chg. over the last day: +0.66%
Japan’s National Core CPI reached 2.4% annually (the previous 2.2%). After decades of deflation, inflationary pressures are a new world for Japanese policymakers, and the Bank of Japan has to keep an eye on inflation that is slightly above the central bank’s 2% target. Unlike the US Fed and the Bank of England, the Bank of Japan is focused on stimulating the weak economy with soft, adaptive policies. Traders should not expect the yen to strengthen until the BoJ is confident that inflation is steady.
- Support levels: 135.89, 135.35, 134.23, 133.47, 132.27, 131.08, 130.85
- Resistance levels: 137.10, 138.25
From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bullish. USD/JPY quotes continue to grow steadily, breaking through all the resistance levels. Under such market conditions, buy trades can be sought from the support level of 135.89, but with additional confirmation. For sell deals, it is possible to consider the resistance level of 137.10. Still, only with additional confirmation in the form of a reverse initiative, as fundamentally, USD/JPY quotes are inclined to grow.
Alternative scenario: If the price fixes below 134.23, the downtrend will likely resume.
- – Japan National Consumer Price Index (m/m) at 02:30 (GMT+3).
The USD/CAD currency pair
- Prev Open: 1.2907
- Prev Close: 1.2945
- % chg. over the last day: +0.30%
The Canadian dollar is a commodity currency, so it depends not only on the monetary policy of the Central Bank of Canada but also on the dollar index and oil prices. Oil prices rose yesterday, but the strengthening of the dollar index was more weighty. But do not expect the USD/CAD quotes will show a long-term trend in one direction since the interest rates of the Bank of Canada and the US Federal Reserve are at the same level. And if to look at the USD/CAD chart on the daily range, you can clearly see the balance, which reflects a certain parity between the currencies.
- Support levels: 1.2900, 1.2858, 1.2809, 1.2761
- Resistance levels: 1.2965, 1.3006
From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The MACD indicator is in the positive zone. The buyer’s pressure remains, but the price is traded before the resistance level, and the divergence is increasing. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.2900, but only with confirmation. For sell deals, it is better to consider the resistance level of 1.2965 or 1.3006, but also with confirmation.
Alternative scenario: if the price breaks down and consolidates below the 1.2809 support level, the downtrend will likely resume.
- – Canada Retail Sales (m/m) at 15:30 (GMT+3).
By JustForex
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
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