The EUR/USD currency pair

• Prev Open: 0.9737
• Prev Close: 0.9814
• % chg. over the last day: +1.48 %

Four European Central Bank officials on Thursday supported another significant interest rate hike, with arguments in favor of a 75 basis point interest rate hike in October. Inflation data showed yesterday that German consumer prices reached their highest level in decades. On an annualized basis, the inflation rate reached 10%, up from 7.4% in the previous month. In Spain, on the other hand, the numbers were more positive. Spain’s annual inflation rate declined from 10.5% to 9.0%. Inflation data will be released today in France, Italy, and the Eurozone. Analysts expect consumer prices in Europe to rise from 9.1% to 9.7% on an annualized basis.

• Support levels: 0.9666, 0.9601
• Resistance levels: 0.9808, 0.9865, 0.9949, 1.0111, 1.0162, 1.0230

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish, but the price has approached the priority change level. The MACD indicator is in the positive area, and the buyers’ pressure remains. It is better to look for sell deals from the resistance level of 0.9808 or 0.9865. Buy trades can be considered from the support level of 0.9666 or 0.9601, but only with confirmation.

Alternative scenario: if the price breaks out through the resistance level of 0.9808 and fixes above it, the uptrend will likely resume.

• – Eurozone German Retail Sales (m/m) at 09:00 (GMT+3);
• – Eurozone French CPI (m/m) at 09:45 (GMT+3);
• – Eurozone German Unemployment Rate (m/m) at 10:55 (GMT+3);
• – Eurozone Italian CPI (m/m) at 12:00 (GMT+3);
• – Eurozone CPI (m/m) at 12:00 (GMT+3);
• – Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
• – US PCE Price index (m/m) at 15:30 (GMT+3);
• – US FOMC Member Brainard Speaks at 16:00 (GMT+3);
• – US Chicago PMI (m/m) at 16:45 (GMT+3);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3);
• – US FOMC Member Bowman Speaks at 18:00 (GMT+3);
• – US FOMC Member Williams Speaks at 23:15 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.0876
• Prev Close: 1.1109
• % chg. over the last day: +2.14 %

The British pound rose for the third day after the Bank of England bought bonds. The Bank of England spent the second-day buying bonds to stabilize financial markets. The Bank of England bought 1.415 billion pounds ($1.55 billion) of British government bonds with maturities of more than 20 years on Thursday, the second day of a multibillion-dollar program aimed at stabilizing the market. But analysts are confident that the rise in sterling due to the Bank of England’s actions is not sustainable.

• Support levels: 1.0918, 1.0711, 1.03
• Resistance levels: 1.1210, 1.1449, 1.1626, 1.1693, 1.1816, 1.1901

From the technical point of view, the trend on the GBP/USD currency pair on the hour time frame is bearish. At the moment, the pound is strengthening due to the actions of the Bank of England. The MACD indicator remains positive, indicating a predominance of buyers. In such market conditions, sell deals are better to look for on the intraday time frames. The nearest resistance level is 1.1210, the level of the priority change. Buy trades can be considered from the support level of 1.0918 or 1.0711, but only with confirmation and short targets.

Alternative scenario: if the price breaks out of the 1.1210 resistance level and fixes above it, the uptrend will likely resume.

• – UK GDP (q/q) at 09:00 (GMT+3).

The USD/JPY currency pair

• Prev Open: 144.02
• Prev Close: 144.41
• % chg. over the last day: +0.27 %

Finance Minister Shun’ichi Suzuki said Thursday that Japan’s recent currency intervention was to correct market distortions caused by speculative currency movements. He also clarified that the Ministry of Finance is ready to intervene again if necessary. Thus, there is no point in expecting a significant movement in the currency pair USD/JPY, as the price has two opposing forces. Where on the one hand, the difference in policy between the US Federal Reserve and the Bank of Japan is pushing quotes up, and on the other hand, the Ministry of Finance of Japan is defending the depreciation of the yen.

• Support levels: 143.00, 140.60, 139.61, 138.78, 137.65, 136.80, 135.20
• Resistance levels: 144.77, 145.35

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish despite last week’s intervention. The MACD indicator has become inactive, and there is slight selling pressure. The price has formed the “Head and Shoulders” pattern, which indicates a possible downward movement. Under such market conditions, buy trades can be searched for on intraday timeframes from the support level of 143, but with confirmation. Sell deals can be searched from the resistance level of 144.77, but only with additional confirmation.

Alternative scenario: If the price fixes below 140.60, the downtrend will likely resume.

• – Japan Industrial Production (m/m) at 02:30 (GMT+3);
• – Japan Unemployment Rate (m/m) at 02:50 (GMT+3);
• – Japan Retail Sales (m/m) at 02:50 (GMT+3);
• – Japan Consumer Confidence (m/m) at 08:00 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.3602
• Prev Close: 1.3681
• % chg. over the last day: +0.58 %

Canada’s real Gross Domestic Product (GDP) rose by 0.1% in July. Thus, the Canadian economy is experiencing an inflation shock more steadily than the US economy. Inflation in Canada is already showing signs of slowing, allowing the Bank of Canada to be less aggressive in raising interest rates further.

• Support levels: 1.3611, 1.3545, 1.3453, 1.3297, 1.3212, 1.3053, 1.2990, 1.2958
• Resistance levels: 1.3755, 1.3858, 1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The MACD indicator has become inactive. The price is trading at the level of the moving averages and forming a balance. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3611 or 1.3545. For sell deals, it is best to consider the resistance level of 1.3755, but only after additional confirmation, as the level has already been tested.

Alternative scenario: if the price breaks down and consolidates below the 1.3545 support level, the downtrend will likely resume.