The EUR/USD currency pair

• Prev Open: 0.9943
• Prev Close: 0.9950
• % chg. over the last day: +0.07 %

Friday’s employment report (Non-Farm Payrolls) for August was mixed: while the economy added more jobs than expected, wage growth slowed, and the unemployment rate rose. Thus, investors are still trying to determine which interest rate hike (50 bps or 75 bps) the US Federal Reserve will choose at its next meeting. Today is a bank holiday in the USA, that’s why volatility will be low during the American session. On the other hand, in the European session, there will be a lot of economic data on the business activity in the service sector.

• Support levels: 0.9912
• Resistance levels: 0.9988, 1.0016, 1.0112, 1.0046, 1.0077, 1.0111, 1.0150

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. EUR/USD quotes are trading below parity again. Technically, there is a formation of a wide balance with a range of 0.9912-1.0077. The MACD indicator is negative again, and the selling pressure remains, but there are the first signs of divergence. Under such market conditions, it is best to look for buy trades on intraday time frames after a false breakdown of the support level of 0.9912, because a lot of liquidity has accumulated behind this level. Sell trades can be considered from the resistance levels of 0.9988 or 1.0016, but only after the additional confirmation.

if the price breaks out of the 1.0077 resistance level and fixes above, the uptrend will likely resume.

• – Spanish Service PMI (m/m) at 10:15 (GMT+3);
• – Italian Service PMI (m/m) at 10:45 (GMT+3);
• – French Service PMI (m/m) at 10:50 (GMT+3);
• – German Service PMI (m/m) at 10:55 (GMT+3);
• – Eurozone Service PMI (m/m) at 11:00 (GMT+3);
• – Eurozone Retail Sales (m/m) at 12:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1541
• Prev Close: 1.1496
• % chg. over the last day: -0.39 %

The widening of the interest rate differential is one of the main reasons why GBP/USD quotes are falling. The actions taken by the Bank of England have so far failed to compensate for the downward pressure on the currency due to the increasingly acute balance of payments problem caused by the energy crisis. Britain is a large net importer of energy, and the sharp rise in oil and gas prices this year has adversely affected its terms of trade, leading to a record current account deficit for the country in the first quarter. This current account deficit is likely to be complemented by a growing budget deficit if Foreign Secretary Liz Truss (the favorite according to the polls) wins the vote, the results of which will be announced Monday.

• Support levels: 1.1500, 1.1400
• Resistance levels: 1.1558, 1.1669, 1.1816, 1.1901, 1.1994, 1.2035, 1.2167

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. Throughout last week the British pound was declining against the US dollar. At the moment the price is trading below the moving averages, the MACD indicator is in the negative zone, but the divergence is increasing. At the moment, it is best to look for sell trades on intraday time frames, the nearest resistance level is 1.1558. Buy trades can be considered from the support level of 1.1500, but only after an additional confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks out through the 1.1817 resistance level and fixes above, the uptrend will likely resume.

• – UK Service PMI (m/m) at 11:30 (GMT+3).

The USD/JPY currency pair

• Prev Open: 140.11
• Prev Close: 140.20
• % chg. over the last day: +0.04 %

The USD/JPY traded almost unchanged on Friday. The price is now near the level of 140, which was last seen in 1998. There is increasing pressure on Japanese officials to support the currency. At the moment, the Bank of Japan is pursuing an ultra-soft monetary policy and is keeping interest rates below 0, while the US Federal Reserve is in a cycle of rate hikes. If the Japanese government does not interfere in its monetary policy, USD/JPY will continue to rise.

• Support levels: 139.61, 138.78, 137.65, 136.80, 135.20
• Resistance levels: 141.00, 142.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading above the average lines, and the buyers’ pressure is still there. The MACD indicator remains positive, but there are signs of divergence, which means that a technical correction will take place soon. Under such market conditions buy trades can be sought from the support level of 139.60, but with additional confirmation. Sell deals can be considered on the intraday time frames, but only with additional confirmation, as fundamentally, USD/JPY quotes are inclined to grow.

Alternative scenario: If the price fixes below 137.65, the downtrend will likely resume.

• – Japan Service PMI (m/m) at 03:30 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.3156
• Prev Close: 1.3124
• % chg. over the last day: +0.24 %

According to preliminary data from Statistics Canada, the Canadian economy contracted in July after four consecutive quarters of growth. The country’s annualized economic growth rate was 3.3% in the second quarter, below the federal agency’s preliminary estimate of a 4.6% annualized rate. Some experts have warned that the sluggish second-quarter numbers are an early sign that the country is headed for a recession. Economists usually define recession as two consecutive quarters of negative GDP.

• Support levels: 1.3077, 1.3020, 1.2989, 1.2958, 1.2936, 1.2900
• Resistance levels: 1.3220

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is now trading above the moving averages. Now the price is trading at the level of moving averages, the indicator MACD has become negative, and the price is correcting. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3077 or 1.3020, but only with confirmation. For sell deals, it is better to consider the resistance level of 1.3220, but only after a false breakout, as the level has already been tested and a lot of liquidity has been formed above the level.

Alternative scenario: if the price breaks down and consolidates below the 1.2989 support level, the downtrend will likely resume.