The EUR/USD currency pair

• Prev Open: 0.9694
• Prev Close: 0.9704
• % chg. over the last day: +0.10 %

Recent strong US Labor Market reports have dashed market participants’ hopes that Fed policymakers may slow down the rate hikes before the end of the year. HSBC is selling the euro against the US dollar, expecting a retest of the 2022 lows, as the recent rally is seen as a reduction in investor sentiment due to premature hopes of a Federal Reserve reversal. HSBC has been advocating a drop in the euro for more than a year and believes the euro will fall even further in the coming months.

• Support levels: 0.9667, 0.9601
• Resistance levels: 0.9743, 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. The MACD indicator became inactive, and the price is forming a balance. Buy trades should be considered from the support level of 0.9667, but with additional confirmation in the form of reverse initiative. Sell deals can be considered from the resistance level of 0.9743, 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.

• – Eurozone Industrial Production (m/m) at 12:00 (GMT+3);
• – US Producer Price Index (m/m) at 15:30 (GMT+3);
• – Eurozone ECB President Lagarde Speaks (m/m) at 16:30 (GMT+3);
• – US FOMC Meeting Minutes at 21:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1055
• Prev Close: 1.0963
• % chg. over the last day: -0.84 %

The pound fell to a new two-week low after Bank of England Governor Andrew Bailey confirmed that the central bank would end its emergency bond-buying program on Friday and told pension fund managers to complete rebalancing their positions within that time frame. The Bank of England also signaled to bankers that it might extend its bond-buying program beyond Friday’s deadline if market conditions require it. The movements in the UK bond market are confusing investors. Analysts believe that the situation may worsen. As a result, such uncertainty scares investors, who sell the British pound and move to safe-haven assets.

• Support levels: 1.0956, 1.0915, 1.0816, 1.0711, 1.03
• Resistance levels: 1.1130, 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. The MACD indicator is in the negative zone, but there is a divergence, indicating the sellers’ weakness. Under such market conditions, buy trades can be considered from the support level of 1.0956 or 1.0915. Sell trades are best to look for on intraday time frames, and the nearest resistance level is 1.1130, but better with confirmation.

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

• – UK GDP (m/m) at 09:00 (GMT+3);
• – UK Industrial Production (m/m) at 09:00 (GMT+3);
• – UK Manufacturing Production (m/m) at 09:00 (GMT+3);
• – UK FPC Meeting Minutes (Tentative);
• – UK FPC Statement (Tentative).

The USD/JPY currency pair

• Prev Open: 145.71
• Prev Close: 145.85
• % chg. over the last day: +0.10 %

The Japanese yen has again renewed its 24-year low against the US dollar. Japan’s top currency diplomat spoke on potential currency intervention Tuesday, saying the authorities had always been ready to take necessary measures against excessive currency volatility. At a regular briefing Wednesday, the chief cabinet secretary said that officials remain ready to take appropriate steps to counter excessive currency volatility. But analysts say it is not worth waiting for a second intervention, as it is costly and has only a temporary effect. To stop the trend, either the Bank of Japan needs to start shifting from a softer monetary policy to a more neutral one, or the US Federal Reserve needs to change its approach and reduce its aggressive attitude towards interest rate hikes.

• Support levels: 145.92, 144.91, 144.16, 143.00, 140.60, 139.61, 138.78, 137.65
• Resistance levels: 147.00, 148.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading above the moving levels. The MACD indicator is in the positive zone, but divergence has appeared. Under such market conditions, buy trades can be sought on the intraday time frames from the support level of 145.92, but with confirmation. Sell deals can be searched from the resistance level of 147.00 or 148.00, but only with additional confirmation in the form of a reverse initiative.

Alternative scenario: If the price fixes below 143.00, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3774
• Prev Close: 1.3794
• % chg. over the last day: +0.15 %

The Canadian dollar is a commodity currency and depends not only on the monetary policy of the Bank of Canada but also on the dollar index and oil prices. Oil prices continued to fall yesterday as the number of Covid cases in China reached the highest level since August, which will lead to lower demand. Fundamentals are predicting higher oil prices due to significant OPEC production cuts, but any disruption in risky assets could continue to negatively impact oil prices.

• 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 bullish. The price is trading above the moving lines. The MACD indicator is positive, but there is a divergence. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3752, but with confirmation. For selling, it is better to consider the resistance level of 1.3858, but only after the additional confirmation

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3583, the downtrend will likely resume.