InvestMacro

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).

The EUR/USD currency pair

• Prev Open: 0.9703
• Prev Close: 0.9699
• % chg. over the last day: -0.04 %

September FOMC minutes did not report anything new, so investors’ main focus is on the US Consumer Price Index, which will be released today. It is a very important report which will tell how aggressive the US Central Bank will be in its next meetings. If the data shows a slowdown in inflation, it may give a sharp boost to risky assets such as the euro and the pound on expectations that the US Fed will be less aggressive. On the other hand, if inflation shows no sign of slowing, the dollar index will continue to strengthen, leading to further declines in the euro.

• 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 price forms a balance, and there is an accumulation of liquidity before the important news, which means that the impulse movement will be significant. The MACD indicator has become inactive. Buy trades should be considered from the support level of 0.9601, 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.

• – US FOMC member Bowman Speaks at 01:30 (GMT+3);
• – US Consumer Price Index (m/m) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.0963
• Prev Close: 1.1093
• % chg. over the last day: +1.18 %

The pound rose against the dollar yesterday as traders bet on a more aggressive interest rate hike by the Bank of England due to concerns that a budget of unaccounted tax cuts would further boost UK inflation. The higher cost of borrowing by the UK government reflects market worries about the affordability of upcoming tax cuts aimed at supporting the British economy, which is in danger of recession. At the moment, investors are confused, so there are likely to be no significant changes before the Bank of England meeting.

• Support levels: 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 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, but buyer pressure is weak. Under such market conditions, buy trades can be considered from the support level of 1.0816. Sell trades are best to look for on intraday timeframes, 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.

The USD/JPY currency pair

• Prev Open: 145.85
• Prev Close: 146.84
• % chg. over the last day: +0.68 %

The yen weakened to a new low in almost 25 years after Bank of Japan Governor Haruhiko Kuroda pledged to maintain a soft monetary policy to support the economic recovery. Earlier this week, Japanese Prime Minister Fumio Kishida also pledged support for the Bank of Japan’s ultra-easy monetary policy, despite the yen’s fall this year. The Bank of Japan is one of the few central banks in the world to maintain minimum rates, while most of its peers aggressively raise rates to fight inflation. This divergent policy continues to affect the Japanese yen negatively.

• Support levels: 146.21, 145.92, 144.91, 144.16, 143.00, 140.60, 139.61
• 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, 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 147.00 or 148.00 resistance level, 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: 1.3794
• Prev Close: 1.3813
• % chg. over the last day: +0.14 %

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 continue to decline amid falling demand due to new restrictions in China. On the other hand, OPEC+ is planning to cut production significantly. As a result, there are two opposing forces in the oil market. The US Index may change the parity, the dynamics of which will be determined after today’s inflation data.

• Support levels: 1.3752, 1.3619, 1.3583, 1.3535, 1.3454
• Resistance levels: 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 average lines, but the balance is forming before the news. The MACD indicator is positive, but the divergence is present. 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 sell deals, it is better to consider the resistance level of 1.3858, but only after an additional confirmation in the form of a false breakout or reverse initiative.

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

• – US Crude Oil Reserves (w/w) at 18:00 (GMT+3).

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.