The EUR/USD currency pair

• Prev Open: 0.9871
• Prev Close: 0.9790
• % chg. over the last day: -0.82 %

The report on the ECB’s September 7, 8 monetary policy meeting released yesterday showed that many Governing Council representatives approved a 75 basis point rate hike. The report also indicated that in the medium term, a 50 basis point hike would be part of a sustainable path towards more neutral rate levels, and such a dynamic would be enough to alleviate inflationary pressures and not “drop” the economy deep into recession. But all inflation forecasts for 2023 and 2024 have been revised upward.

• Support levels: 0.9782, 0.9748, 0.9666
• Resistance levels: 0.9856, 0.9962, 1.0058, 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 bullish. But the MACD indicator became negative, the price is trading below the moving averages, and the sellers’ pressure is increasing again. Buy trades should be considered from the support level of 0.9782. Sell deals may be considered from the resistance level of 0.9856, but only with confirmation.

Alternative scenario: if the price breaks down through the support level of 0.9666 and fixes below it, the downtrend will likely resume.

• – US FOMC Member Waller Speaks (m/m) at 00:00 (GMT+3);
• – US FOMC Member Mester Speaks (m/m) at 01:30 (GMT+3);
• – German Industrial Production (m/m) at 09:00 (GMT+3);
• – US Nonfarm Payrolls (m/m) at 15:30 (GMT+3);
• – US Unemployment Rate (m/m) at 15:30 (GMT+3);
• – US FOMC Member Williams Speaks (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1324
• Prev Close: 1.1158
• % chg. over the last day: -1.49 %

The UK construction companies reported a moderate increase in business activity in September, marking a return to growth after two months of declining output. Nevertheless, subdued demand persists, as evidenced by the weakest new orders since the economic recovery began in June 2020. Confidence in business prospects fell to its lowest level in two years in September, reflecting fears of higher interest rates and a downturn in the UK economy as a whole. On a more positive note, the supply deficit narrowed in September, and delivery delays were the least common since February 2020.

• Support levels: 1.1121, 1.0915, 1.0816, 1.0711, 1.03
• Resistance levels: 1.1248, 1.1478, 1.1693, 1.1816, 1.1901

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame is bullish. But the MACD indicator became negative, the price is trading below the moving averages, and the sellers’ pressure is increasing again. Under such market conditions, buy trades can be considered from the support level of 1.1121, but only with confirmation. Sell trades are best to look for on intraday time frames. The nearest resistance level is 1.1248, but also better with confirmation.

Alternative scenario: if the price breaks down from the 1.0915 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 144.58
• Prev Close: 145.13
• % chg. over the last day: +0.38 %

The USD/JPY quotes are slowly increasing again. Analysts are confident that it is not worth expecting another currency intervention from the Japanese government, as it is costly and has a temporary effect. Secondly, the Bank of Japan does not have enough funds to stop the yen’s fall. Japan has $1.3 trillion in reserves, but only about $135.5 billion is in the form of deposits. The rest is held in US Treasury bills. To stop the yen from falling, the Bank of Japan needs to shift the narrative from a soft monetary policy to a neutral one. However, since the Bank of Japan has no plans to change anything in its policy until the end of the year, and the US Federal Reserve continues to aggressively raise rates, USD/JPY quotes will be inclined to rise.

• Support levels: 144.16, 143.00, 140.60, 139.61, 138.78, 137.65, 136.80, 135.20
• Resistance levels: 145.35

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The MACD indicator has become positive, and the price trades above the moving levels again. Under such market conditions, buy trades can be searched for on the intraday time frames from the support level of 144.16, but with confirmation. Sell deals can be searched from the resistance level of 145.35, but only with an additional confirmation in the form of a false breakout, since the level has already been tested.

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

The USD/CAD currency pair

• Prev Open: 1.3615
• Prev Close: 1.3746
• % chg. over the last day: +0.96 %

Despite falling consumer prices in Canada, Bank of Canada Governor Tiff Macklem said he is firmly on a path to raise interest rates because policymakers are concerned about heightened domestic price pressures and rising inflationary expectations. Canada’s two-year bond yield reached its highest level since 2007, rising more than five basis points to 3.98%. Traders increased the odds of a 50 basis point rate hike at the next policy decision on October 26. Analysts are predicting that the Bank of Canada will stop at 4% in its rate hike cycle. The rate is currently at 3.25%.

• Support levels: 1.3675, 1.3619, 1.3583, 1.3535, 1.3454
• 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 bearish. But the price is trading above the moving lines again. The MACD indicator has become positive, and the buyer’s pressure is increasing. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3675 or 1.3619, but with confirmation. For sell deals, it is better to consider the resistance level of 1.3756, but only after the additional confirmation.

Alternative scenario: if the price breaks out through and consolidates above the resistance level of 1.3756, the uptrend will likely resume.

• – Canada Unemployment Rate (m/m) at 15:30 (GMT+3).