The EUR/USD currency pair

• Prev Open: 1.0691
• Prev Close: 1.0704
• % chg. over the last day: +0.12%

Concerns about Italy’s political stability have resurfaced again. There is growing skepticism about whether the Draghi government (in office since February 2021) has the strength to provide economic reforms, mainly to finance next-generation EU modernization projects, before the next general election. There is discontent about the growing income gap between Italy and Germany in Rome. If uncertainty in Italy intensifies, both the euro and ECB policy could be affected.

• Support levels: 1.0672, 1.0627, 1.0611, 1.0568, 1.0509, 1.0445, 1.0379
• Resistance levels: 1.0738, 1.0770, 1.0786, 1.0869

From a technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. The MACD indicator has become inactive, the price is trading below the moving averages. Under such market conditions, investors can look for buy trades on intraday time frames from the support level of 1.0672, but only with confirmation and short targets. Sell trades can be considered from the resistance level of 1.0738 or 1.0770, but only after the additional confirmation.

Alternative scenario: if the price breaks out through the 1.0611 support level and fixes below, the downtrend will likely resume.

• – German Industrial Production (m/m) at 09:00 (GMT+3);
• – Eurozone GDP (q/q) at 12:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2529
• Prev Close: 1.2587
• % chg. over the last day: +0.46%

In the UK, the battle for the leadership of the Conservative Party is taking place amid a cost-of-living crisis that threatens to push the economy into recession. This puts pressure on the Bank of England to maintain growth and contain the highest inflation in four decades while keeping up with the Federal Reserve. Johnson’s narrow victory has no clear implications for economic policy and, therefore, for the fundamentals of the pound.

• Support levels: 1.2541, 1.2498, 1.2433, 1.2398, 1.2283, 1.2199
• Resistance levels: 1.2628, 1.2669, 1.2698, 1.2770

The GBP/USD currency pair trend is bullish on the hourly time frame. The MACD indicator became positive, and the buyers’ pressure increased. Yesterday the price sharply rebounded from the priority change level and then fixed above the moving averages. A wide price corridor is forming now. Under such market conditions, buy deals may be considered from the support level of 1.2541 or 1.2498, but only with additional confirmation and short targets. Sell deals should be looked for from the resistance level of 1.2628, but with confirmation.

Alternative scenario: if the price breaks down through the 1.2433 support level and fixes below, the mid-term downtrend will likely resume.

• – UK Construction PMI at 11:30 (GMT+3).

The USD/JPY currency pair

• Prev Open: 131.85
• Prev Close: 132.63
• % chg. over the last day: +0.59%

The Japanese yen has fallen to a 20-year low. Two factors can explain the fall in the yen. The Fed is tightening monetary policy, while the Bank of Japan is easing. And US Treasury yields are rising and are now above the 3 percent level. Rising US yields are giving confidence to the dollar index. As US interest rates move up and the Bank of Japan limits JGB yields, the difference in the US and Japanese interest rates continues to widen, and the risk to the yen remains skewed to the downside.

• Support levels: 132.00, 131.00, 130.12, 129.48, 128.76, 128.10, 127.64, 127.24, 127.04
• Resistance levels: 133.86

The medium-term trend on the USD/JPY currency is bullish. The price is steadily growing, and the MACD indicator is in the positive zone, but there are signs of overbought and divergence. It is best to wait for a slight correction, as the price has deviated strongly from the moving lines. Buy trades can be considered from the support level of 132.00, but with confirmation. A resistance level of 133.86 is good for sell deals, but only with additional confirmation in the form of a reverse initiative and short targets.

Alternative scenario: If the price fixes below 129.48, the downtrend will likely resume.

• – Japan GDP (q/q) at 02:50 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.2574
• Prev Close: 1.2532
• % chg. over the last day: -0.34%

After two months of strong growth in goods imports and exports, imports fell by 0.4%, and exports lost 2.1% in real (physical) terms in April. This is not a good sign for the Canadian currency, but analysts are confident that the decline is temporary. The Canadian dollar is a commodity currency, so it depends on the dollar index and the dynamics of oil prices. Oil prices have reached almost three-month highs, as the supply shortage generally supported the market.The fundamental picture now is favorable to strengthening both the American dollar and the Canadian one, so it is not worth waiting for the mid-term trend movements here.

• Support levels: 1.2537, 1.2510
• Resistance levels: 1.2567, 1.2623, 1.2676, 1.2728, 1.2765, 1.2807, 1.2893, 1.2953

The USD/CAD currency pair is bearish in terms of technical analysis. The MACD indicator is negative again, but the divergence is observed on several time frames. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2537 or 1.2510, but it is better to wait for the bullish initiative. For sell deals, it is better to consider the resistance level of 1.2567, but also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates above 1.2728, the uptrend will likely resume.