InvestMacro

The EUR/USD currency pair

• Prev Open: 0.9972
• Prev Close: 0.9994
• % chg. over the last day: +0.22 %

New Eurozone inflation data will be released today. Analysts forecast that the Consumer Price Index will not change and will remain at the same level. But there may be surprises in the form of a new round of price acceleration, so investors should keep a close eye on the report. Volatility in currency pairs with the euro will increase.

• Support levels: 0.9971, 0.9912
• Resistance levels: 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 is trading in a narrow range, and a sharp impulse movement is expected. The MACD indicator has become inactive. Under such market conditions, it is best to look for buy deals on intraday time frames from the support level of 0.9912, but with confirmation. Sell trades can be considered from resistance levels of 1.0111 or 1.0162.

Alternative scenario: if the price breaks down through the support level of 0.9912 and fixes below, the downtrend will likely resume.

• – Eurozone Italian Consumer Price Index (m/m) at 12:00 (GMT+3);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1541
• Prev Close: 1.1462
• % chg. over the last day: -0.69 %

The pound is one of the major currencies with the worst performance in 2022 due to expectations of a prolonged recession, sustained high inflation, and political instability. New Prime Minister Liz Truss’s plans to finance a giant energy support package by increasing borrowing have heightened investor fears about the long-term prospects of the British economy. The Bank of England (BoE) will meet next week and is expected to raise interest rates by at least 50 basis points (bps), perhaps even 75 bps, as it looks to slow inflation. According to Refinitiv, money markets currently assume a 65% chance of a 75 basis point increase.

• Support levels: 1.1449, 1.1400
• Resistance levels: 1.1626, 1.1693, 1.1816, 1.1901, 1.1994, 1.2035, 1.2167

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame is bullish. But at the moment, the price is trading below the moving averages again, and the MACD indicator is in the negative zone, but there are signs of divergence. Buy trades can be considered from the support level of 1.1449, but only with confirmation. Sell trades are best to look for on intraday time frames, and the nearest resistance level is 1.1626 or 1.1693.

Alternative scenario: if the price breaks down the support level of 1.1449 and fixes below it, the downtrend will likely resume.

• – UK Retail Sales (m/m) at 09:00 (GMT+3).

The USD/JPY currency pair

• Prev Open: 143.11
• Prev Close: 143.46
• % chg. over the last day: +0.25 %

Koichi Hagiuda, executive director of Japan’s ruling party, calls for $209 billion to fight inflation and the weak yen. A senior Japanese ruling party official suggested Thursday that a stimulus package worth more than 30 trillion yen is needed to address inflationary pressures in Japan’s economy. Haguida’s remarks followed Prime Minister Fumio Kishida’s comments last week that the government would prepare a new economic package in October to soften the blow that rising prices are taking on households and businesses. The government has unveiled short-term stimulus measures that include financial support for low-income households, tax exemptions for residents, and an extension of gasoline subsidies and other measures through the end of the year.

• Support levels: 142.88, 141.77, 141.00, 139.61, 138.78, 137.65, 136.80, 135.20
• Resistance levels: 144.22, 145.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading at the level of moving averages. The MACD indicator has become inactive. Under such market conditions, buy trades can be sought from the support level of 142.88, but with additional confirmation. Sell deals can be sought on intraday time frames from the resistance level of 144.22 or 145.00, but only with additional confirmation since the USD/JPY is inclined to grow.

Alternative scenario: If the price fixes below 141.00, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3167
• Prev Close: 1.3226
• % chg. over the last day: +0.45 %

The Canadian dollar has fallen to its lowest level against the US dollar since 2020. Despite falling more than 4% this year against its US counterpart, the Canadian dollar will remain one of the best-performing currencies in the world in 2022. The economy has been helped by higher commodity and energy prices as well as reduced COVID restrictions, with growth actually accelerating in the second quarter even as fears about the global economic crisis intensified.

• Support levels: 1.3220, 1.3053, 1.2990, 1.2958, 1.2936, 1.2900
• Resistance levels: 1.3326

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 averages, and the MACD indicator is in the positive zone, but there are the first signs of divergence. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3220. For sell deals, it is better to consider the resistance level of 1.3326, but only after an additional confirmation in the form of a false breakout.

Alternative scenario: if the price breaks down and consolidates below the 1.2990 support level, the downtrend will likely resume.

The EUR/USD currency pair

• Prev Open: 0.9965
• Prev Close: 0.9979
• % chg. over the last day: +0.14 %

Industrial production in the Eurozone has decreased by 2.3% over the last month. These statistics clearly indicate that the region’s economy is struggling. ECB Governing Council spokesman Francois Villeroy de Galhau said Wednesday that interest rates in the Eurozone could reach 2% by year’s end. Another Governing Council representative, Gediminas Simkus, head of Lithuania’s Central Bank, said the Central Bank should raise interest rates by at least half a point at its October meeting. ECB President Philip R. Lane indicated yesterday that, based on current estimates, the ECB should stick with further interest rate hikes over the next few meetings. The new projections call for inflation to average 8.1% in 2022, 5.5% in 2023, and 2.3% in 2024

• Support levels: 0.9971, 0.9912
• Resistance levels: 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 formed a false breakout zone above the level of 1.0111 and returned to the wide range. The MACD indicator became negative, and the sellers’ pressure intensified. Under such market conditions, it is best to look for buy trades on intraday time frames from the support level of 0.9972 or 0.9912, but with confirmation. Sell trades can be considered from the resistance levels of 1.0111 or 1.0162.

Alternative scenario: if the price breaks down through the support level of 0.9912 and fixes below, the downtrend will likely resume.

• – Eurozone French Consumer Price Index (m/m) at 09:45 (GMT+3);
• – US Retail Sales (m/m) at 15:30 (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 Industrial Production (m/m) at 16:15 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1491
• Prev Close: 1.1538
• % chg. over the last day: +0.41 %

The annual UK inflation rate unexpectedly fell to 9.9% due to lower fuel prices. But food prices rose as the country’s cost of living crisis continued. On a month-to-month basis, consumer prices increased by 0.5%, slightly below forecasts. Core inflation, which excludes energy, food, alcohol, and tobacco, rose by 0.8% month-over-month and to 6.3% year-over-year, in line with expectations. The Bank of England is set to announce its final monetary policy decision of the year next Thursday and is expected to choose a sharp 75 basis point interest rate hike as it helps slow inflation.

• Support levels: 1.1503, 1.1449, 1.1400
• Resistance levels: 1.1627, 1.1693, 1.1816, 1.1901, 1.1994, 1.2035, 1.2167

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame is bullish. At the moment, the price is trading below the moving averages again, and the MACD indicator is in the negative zone. Buy trades can be considered from the support level of 1.1503 or 1.1449, but only with confirmation. Sell trades are best to look for on intraday time frames, and the nearest resistance level is 1.1627 and 1.1693.

Alternative scenario: if the price breaks down the support level of 1.1449 and fixes below it, the downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 144.54
• Prev Close: 143.16
• % chg. over the last day: -0.96 %

The Nikkei newspaper reported on Wednesday that the Bank of Japan conducted an interest rate check-in in apparent preparation for currency intervention, as policymakers stepped up warnings of a sharp drop in the yen. The Central Bank probably considers the recent changes in the yen’s exchange rate to be too extensive. Japanese Finance Minister Shunichi Suzuki also said that the yen’s recent moves have been “swift and one-sided,” which could prompt the government to back the currency. So far, this is all at the level of rumor and talk, which may help slow the yen’s depreciation, but is unlikely to change the trend unless dollar and UST yields fall precipitously or the Bank of Japan changes its policy.

• Support levels: 142.88, 141.77, 141.00, 139.61, 138.78, 137.65, 136.80, 135.20
• Resistance levels: 145.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading at the level of moving averages. The MACD indicator has become inactive. Under such market conditions, buy trades can be sought from the support level of 142.88, but with additional confirmation. Sell deals can be considered on the intraday time frames from the level of 145.00, but only with additional confirmation, as fundamentally, USD/JPY quotes are inclined to growth.

Alternative scenario: If the price fixes below 141.00, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3150
• Prev Close: 1.3165
• % chg. over the last day: +0.11 %

Canada’s Central Bank is holding interest rates at 3.25%, and it’s 0.75% higher than the US Fed. The US Central Bank is planning another 0.75% rate hike next week, which will flatten rates between the US and Canadian banks again. Thus, the imbalance in pricing will come mainly from oil prices alone since the Canadian dollar is a commodity currency. The growth of oil prices will contribute to the strengthening of the Canadian currency.

• Support levels: 1.3053, 1.2990, 1.2958, 1.2936, 1.2900
• Resistance levels: 1.3220

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 averages, the MACD indicator is in the positive zone, and a narrow flat is forming. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3053 after the pullback. The best way to sell is to consider the resistance level of 1.3220, but only after an additional confirmation in the form of a false breakout.

Alternative scenario: if the price breaks down and consolidates below the 1.2990 support level, the downtrend will likely resume.

The EUR/USD currency pair

• Prev Open: 1.0121
• Prev Close: 0.9968
• % chg. over the last day: -1.53 %

Germany’s Consumer Price Index showed 7.9% YoY after 7.5% in July. Inflation has been above 7% for more than six months. The main reason for the high inflation is still an increase in energy and food prices. The annualized inflation rate in Spain has declined from 10.7% to 10.5%. The US Consumer Price Index increased by 0.1% last month, with core inflation up to 0.6%, against expectations of 0.3%. Thus, US inflation showed no signs of slowing, which caused a sharp flow of money into the dollar index, on expectations that the US Federal Reserve will continue to raise interest rates aggressively.

• Support levels: 0.9971, 0.9912.
• Resistance levels: 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 formed a false breakout zone above the level of 1.0111 and returned to the wide range. The MACD indicator became negative, and the sellers’ pressure intensified. Under such market conditions, it is best to look for buy trades on intraday time frames from the support level of 0.9971, but with confirmation. Sell trades can be considered from resistance levels of 1.0111 or 1.0162.

Alternative scenario: if the price breaks down through the support level of 0.9912 and fixes below, 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).

The GBP/USD currency pair

• Prev Open: 1.1676
• Prev Close: 1.1491
• % chg. over the last day: -1.61 %

UK labor market data showed that average payrolls, including bonuses, rose from 5.2% to 5.5%, jobless claims increased by 6,300, and the unemployment rate fell from 3.8% to 3.6%. Total UK jobs rose by 290,000 for the quarter to a record 35.8 million, exceeding the December 2019 pre-coronavirus level for the first time. Thus, the UK labor market remains strong, opening room for the Bank of England to be more aggressive. The question is whether the Bank of England will act more aggressively under a new prime minister.

• Support levels: 1.1503, 1.1449, 1.1400
• Resistance levels: 1.1627, 1.1693, 1.1816, 1.1901, 1.1994, 1.2035, 1.2167

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. At the moment, the price is trading below the moving averages again, and the MACD indicator is in the negative zone. Buy trades can be considered from the support level of 1.1503, but only with confirmation. Sell trades are best to look for on intraday time frames, and the nearest resistance level is 1.1627 and 1.1693.

Alternative scenario: if the price breaks down the support level of 1.1449 and fixes below it, the downtrend will likely resume.

• – UK Consumer Price Index (m/m) at 09:00 (GMT+3).

The USD/JPY currency pair

• Prev Open: 142.82
• Prev Close: 144.52
• % chg. over the last day: +1.19 %

The situation on the USD/JPY currency pair remains the same. Japan’s Central Bank keeps interest rates ultra-low and its monetary policy ultra-soft, while the US Federal Reserve is in a cycle of monetary tightening, raising interest rates, and reducing the balance sheet. This divergent policy has already sent the USD/JPY quotes to a 24-year high. Analysts expect the quotes will continue to rise as no changes are expected in the near term.

• Support levels: 142.86, 141.77, 141.00, 139.61, 138.78, 137.65, 136.80, 135.20
• Resistance levels: 145.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading at the level of moving averages. The MACD indicator has become positive, but the buyers’ pressure remains. Under such market conditions, buy trades can be sought from the support level of 142.86, but with additional confirmation. Sell deals can be considered on the intraday time frames from the level of 145.00, but only with additional confirmation, as fundamentally, USD/JPY quotes are inclined to growth.

Alternative scenario: If the price fixes below 141.00, the downtrend will likely resume.

• – Japan Industrial Production (m/m) at 07:30 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.2976
• Prev Close: 1.3173
• % chg. over the last day: +1.52 %

Macroeconomic forecasts continue to reflect a relatively higher growth rate in Canada compared to the US this year and next year. Analysts expect the Bank of Canada rate to peak at 3.75% this year, slightly higher than the (revised) forecast of 3.5%. The USD/CAD exchange rate is forecast at 1.30 at the end of the year and 1.25 at the end of next year.

• Support levels: 1.3053, 1.2990, 1.2958, 1.2936, 1.2900
• Resistance levels: 1.3169, 1.3220

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 averages, the MACD indicator is in the positive zone, and signs of bullish pressure remain. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3053 after the pullback, as the price has strongly deviated from the averages. For sell deals, it is best to consider the resistance level of 1.3169 or 1.3220, but only after the additional confirmation.

Alternative scenario: if the price breaks down and consolidates below the 1.2990 support level, the downtrend will likely resume.

• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3).