The EUR/USD currency pair

• Prev Open: 0.9700
• Prev Close: 0.9770
• % chg. over the last day: +0.72 %

The US consumer price Index increased by 0.4% last month, but in annual terms, the index declined from 8.3% to 8.2%. Core inflation, which excludes food and energy prices, rose by 0.6% last month, and the core index increased from 6.3% to 6.6% in annual terms. Thus, overall inflation showed signs of decline, while core inflation showed signs of acceleration. The reaction of the markets has been mixed. The European currency initially fell on the news, but by the end of the trading session, it recovered sharply and closed in positive territory. Analysts connect it with the fact that such an inflation scenario was initially put in the price.

• Support levels: 0.9777, 0.9701
• Resistance levels: 0.9856, 0.9961, 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 positive, and the buyers’ pressure is still there. Yesterday, the price formed a false breakdown zone, which can be used as support. Buy trades should be considered from the support level of 0.9777 or 0.9701, but with an additional confirmation in the form of reverse initiative. Sell deals can 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 Retail Sales (m/m) at 15:30 (GMT+3);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1094
• Prev Close: 1.1316
• % chg. over the last day: +2.00 %

The pound rose against the dollar yesterday as investors are betting on an aggressive interest rate hike from the Bank of England, which will be higher than the US Fed’s rate step. According to analysts, the worst of the inflationary shocks for the US economy has already passed, so the difference between the interest rates of the Bank of England and the US Federal Reserve will now decrease, as UK inflation is not yet at its peak.

• Support levels: 1.1229, 1.1093, 1.0915, 1.0817
• Resistance levels: 1.1478, 1.1693, 1.1816, 1.1901

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The MACD indicator is in the positive zone, and buyers’ pressure remains high. Under such market conditions, buy deals can be considered from the support level of 1.1229, but better after confirmation. Sell trades are best to look for on intraday timeframes, and the nearest resistance level is 1.1478.

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

The USD/JPY currency pair

• Prev Open: 146.90
• Prev Close: 147.22
• % chg. over the last day: +0.22 %

The yen has renewed its price low again. There are two key reasons for the rapid weakening of the Japanese currency. First is the growing divergence in monetary policy between the US and Japan. The Bank of Japan continues to keep monetary policy soft as inflation and wages remain relatively low in the country. Second, the yen has also been hit hard by Japan’s collapsing current account balance after oil prices rose sharply following Russia’s invasion of Ukraine. And the situation will not change in the coming weeks.

• Support levels: 146.21, 145.93, 144.91, 144.16, 143.00, 140.60, 139.61
• Resistance levels: 147.67, 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 price is trading above the moving average levels. The MACD indicator is in the positive zone, and the pressure on buyers remains. Under such market conditions, buy trades can be searched for on intraday time frames from the support level of 146.21, but with confirmation. Sell deals can be searched from the 147.67 or 148.00 resistance level, but only with additional confirmation in the form of a reverse initiative.

Alternative scenario: If the price fixes below 144.91, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3808
• Prev Close: 1.3753
• % chg. over the last day: -0.40 %

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 rose sharply after the inflation report, which allowed the Canadian currency to strengthen. The Bank of Canada is pretty much keeping up with the US Federal Reserve in terms of the speed of interest rate hikes, with Canada showing signs of slowing inflation. Therefore, with oil prices trending higher due to OPEC+ production cuts, the Canadian dollar could increase sharply against the dollar in the coming weeks.

• Support levels: 1.3706, 1.3619, 1.3583, 1.3535, 1.3454
• Resistance levels: 1.3818, 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 below the moving average lines. The MACD indicator is negative, and the sellers’ pressure is still present. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3706, but after a false breakdown. For selling, it is best to consider the resistance level of 1.3818 or 1.3858, but only after additional confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3706, the downtrend will likely resume.

• – Canada Wholesale Sales (m/m) at 15:30 (GMT+3).