The EUR/USD currency pair

• Prev Open: 0.9850
• Prev Close: 0.9771
• % chg. over the last day: -0.81 %

The annual inflation rate in the Eurozone increased to 9.9% in September 2022, up from 9.1% in August. Core inflation, which excludes food and energy prices, rose to 4.8% from 4.3%. According to a report released by Eurostat, inflation remains high in almost all categories. Amid this jump in consumer prices, ECB representative Vasle indicated yesterday that the central bank should raise interest rates by 75 basis points at its next two meetings.

• Support levels: 0.9752, 0.9701
• Resistance levels: 0.9848, 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. But the price is trading below the moving averages. Indicator MACD has become negative, and the buyers’ pressure is weakening, but active sellers are not observed too. Buy trades should be considered from the support level of 0.9752, but with additional confirmation in the form of reverse initiative. Sell deals may be considered from the resistance level of 0.9848, but also 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.

• – Germany Producer Price Index (m/m) at 09:00 (GMT+3);
• – Eurozone EU Leaders Summit (m/m) at 13:00 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+3);
• – US Existing Home Sales (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1306
• Prev Close: 1.1213
• % chg. over the last day: -0.83 %

The UK Consumer Price Index rose from 9.9% to 10.1% year-over-year, slightly above expectations of 10%. Annual core inflation increased from 6.3% to 6.5%. Now that there is some clarity on the new mini-budget, benefits, and taxes, and the inflation rate is known, the next step is up to the Bank of England. Analysts are predicting a significant rate hike (0.75-1%) at the next meeting on November 3. Investors expect the pound to remain under pressure amid rising inflation and recession in the UK.

• Support levels: 1.1186, 1.1093, 1.0915, 1.0817
• Resistance levels: 1.1311, 1.1367, 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 price is trading below the moving averages. The MACD indicator has become negative, indicating a weakness of the buyers. Under such market conditions, buy trades can be considered from the support level of 1.1186, but better after confirmation. It is better to look for sell trades on the intraday time frames, and the nearest resistance level is 1.1311.

Alternative scenario: if the price breaks down of the 1.1094 support level and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 149.23
• Prev Close: 149.90
• % chg. over the last day: +0.45 %

Traders expect the Japanese Finance Ministry and the Central Bank to enter the market again as the currency pair is approaching the key psychological barrier at 150. Analysts believe that if the price passes the 150 level, it will accelerate the quotes’ growth. Yesterday, Prime Minister of Japan Fumio Kishida said that the government could not tolerate the sudden one-sided and excessive movements in the currency market. The possibility of a new intervention is increasing, but previous attempts to stop the growth were unsuccessful. Perhaps investors are in for a surprise monetary policy “reversal” from the Bank of Japan. Still, so far, such a scenario seems unlikely, as Bank of Japan leaders on Wednesday stressed the need to maintain the ultra-soft monetary policy in order to protect the economy from possible risks. Credit Suisse analysts are confident that the yen could weaken well above the 150 level if Japan’s central bank maintains its monetary policy at its October 27-28 meeting.

• Support levels: 149.48, 147.67, 146.44, 145.93, 144.91, 144.16, 143.00
• Resistance levels: 150.00

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, the buyer’s pressure remains, but the divergence is increasing, which indicates a soon corrective movement. Under such market conditions, buy trades can be searched for on intraday time frames from the support level of 149.48, but with confirmation. Sell deals can be searched from the resistance level of 150.00, but only with additional confirmation in the form of a reverse initiative or a false breakout.

Alternative scenario: If the price fixes below 147.67, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3738
• Prev Close: 1.3763
• % chg. over the last day: +0.18 %

Canada’s annual inflation for the month of September was 6.9% year-over-year (August: 7.0%), indicating a third consecutive decline in overall inflation. Core inflation, which excludes energy and food prices, was up from 5.8% to 6.0% year-over-year. Analysts believe the jump in core inflation reinforces the likelihood that the Bank of Canada will raise interest rates another 75 basis points next week and remain on an aggressive path for a while longer.

• Support levels: 1.3732, 1.3619, 1.3583, 1.3535, 1.3454
• Resistance levels: 1.3795, 1.3855, 1.3968

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is trading at the level of moving averages. The MACD indicator has become inactive, forming a wide sideways. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3732, but after confirmation, as the level has already been tested. For sell deals, it is best to consider the resistance level of 1.3855, 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 1.3677, the downtrend will likely resume.