InvestMacro

The EUR/USD currency pair

• Prev Open: 1.0006
• Prev Close: 0.9903
• % chg. over the last day: -0.13 %

The European Central Bank raised its three official interest rates by 75 basis points, the largest interest rate change in ECB history. The Central Bank also warned of further hikes as it struggled to get record-high inflation back under control. “Based on its current assessment, the Governing Council expects to raise interest rates even further in the next few meetings to reduce demand and guard against the risk of persistent increases in inflation expectations,” the ECB said in a statement. Goldman Sachs recommends investors sell the euro against the Swiss franc after the ECB’s record rate hike, as they believe it is likely that the Swiss National Bank will want to take action to stop the franc from depreciating.

• Support levels: 1.0016, 0.9971, 0.9912
• Resistance levels: 1.0077, 1.0111, 1.0150

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish, but the price is trading at the priority change level, and the probability of a trend change is very high. Technically, the price is still trading in a wide balance with a range of 0.9912-1.0077. The MACD indicator became positive, there is buying pressure. Under such market conditions, buy trades are best sought on intraday time frames from the support level of 1.0016 or 0.9971. Sell trades can be considered from the resistance levels of 1.0077, but only after an additional confirmation in the form of a false breakout of the level and reverse initiative.

Alternative scenario: if the price breaks out of the 1.0077 resistance level and fixes above, the uptrend will likely resume.

• – US FOMC Member George Speaks (m/m) at 19:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1514
• Prev Close: 1.1502
• % chg. over the last day: -0.10 %

British Prime Minister Liz Truss on Thursday announced a broad stimulus package to help Britons cope with rising energy bills and attract investment in the energy sector. In her first major step in her leadership position, Truss announced that households will pay no more than 2,500 pounds ($2,880) a year each of the next two years. The restriction will take effect October 1. According to politicians, such a move will reduce inflation to 5%. A similar guarantee for businesses will be in effect for the next six months. Then further support will be given to vulnerable sectors. Reports also indicate that there will be a £40 billion package to support businesses with their energy costs, bringing the total expected amount of support measures to  180 billion.

• Support levels: 1.1518, 1.1449, 1.1400
• Resistance levels: 1.1669, 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 bearish. At the moment, the price is trading at the level of moving averages, and the MACD indicator is positive again. It is best to look for sell trades on intraday time frames, the nearest resistance level is 1.1669. Buy trades can be considered from the support level of 1.1518, but only with confirmation.

Alternative scenario: if the price breaks out through the 1.1669 resistance level and fixes above, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev Open: 142.70
• Prev Close: 143.74
• % chg. over the last day: +0.72 %

Japan’s GDP increased from 2.2% to 3.5% (y/y) in the second quarter, showing confidence in the economy. But it had little effect on the Japanese Yen. The dollar index rose against the yen on Thursday amid new announcements by Fed officials to raise the rate by 0.75% at the September 20-21 meeting. USD/JPY quotes have been rising for 9 out of the last 10 trading sessions. Analysts say the worst is not over for the Japanese yen, and it could fall even more in the coming months. Analysts think that the rate can easily go to 150 or even 160.

Trading recommendations

• Support levels: 142.83, 141.77, 141.00, 139.61, 138.78, 137.65, 136.80, 135.20
• Resistance levels: 144.05, 145.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. Today, the price has fallen below the average lines, the buyers’ pressure has eased. The MACD indicator has become negative. Under such market conditions, buy trades can be sought from the support level 142.83 or 141.77, but with additional confirmation. Sell positions can be searched for on the intraday time frames from the level of 144.05, but only with an additional confirmation, because fundamentally USD/JPY quotes are inclined to grow.

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

There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.3119
• Prev Close: 1.3089
• % chg. over the last day: -0.23 %

The Canadian dollar is a commodity currency, so it is highly dependent on the dynamics of oil prices as well as the dynamics of the dollar index. At the moment, the Canadian dollar is strengthening for two reasons. The first is that the Bank of Canada is holding the highest interest rate among major economies. The second is that crude oil prices increased by 1% on Thursday after falling to a seven-month low in the previous session, as Russia threatened to halt oil and gas exports to some buyers.

Trading recommendations

• Support levels: 1.3020, 1.2989, 1.2958, 1.2936, 1.2900
• Resistance levels: 1.3108, 1.3220

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is now trading below the moving averages, the MACD indicator has become negative, and there is slight seller pressure. Under such market conditions, buy trades should be considered on the lower time frames from the support level 1.3020, but only with confirmation. For sell deals, it is best to consider the resistance level of 1.3108, but only after the additional confirmation.

Alternative scenario: if the price breaks down and consolidates below the 1.3020 support level, the downtrend will likely resume.

News feed for 2022.09.09:

• – Canada Unemployment Rate (m/m) at 15:30 (GMT+3).

The EUR/USD currency pair

• Prev Open: 0.9903
• Prev Close: 0.9903
• % chg. over the last day: +0.91 %

The ECB will hold its monetary policy meeting today, where analysts expect to see an excessive interest rate hike of 0.75%. And given the euro strengthening yesterday, there is every reason to believe that investors are already buying European currencies in the expectation that the ECB will hold an aggressive rate hike, unusual for itself. But many analysts believe it is too early to consider the euro as an investment, as the euro is still under a lot of pressure due to fears of recession, the conflict in Ukraine, and the energy shock. Also, it should be noted that the US Federal Reserve will also raise the rate by 0.5-0.75% at its next meeting, so the interest rate differential between the Fed and the ECB will continue to put downward pressure on the EUR/USD quotes.

• Support levels: 0.9953, 0.9929, 0.9912.
• Resistance levels: 1.0016, 1.0046, 1.0077, 1.0111, 1.0150

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. EUR/USD quotes are trading near parity again. Technically, there is a formation of a wide balance with a range of 0.9912-1.0077. The MACD indicator became positive, and the price returned to the range, forming a false breakdown zone below. Under such market conditions, buy trades are best to look for on intraday time frames from the support level of 0.9953 or 0.9929. Sell trades can be considered from resistance levels of 1.0016 or 1.0046, but only after the additional confirmation.

Alternative scenario: if the price breaks out of the 1.0047 resistance level and fixes above, the uptrend will likely resume.

• – Eurozone Marginal Lending Facility (m/m) at 15:15 (GMT+3);
• – Eurozone ECB Monetary Policy Statement (m/m) at 15:15 (GMT+3);
• – Eurozone ECB Interest Rate Decision (m/m) at 15:15 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – Eurozone ECB Press Conference at 15:45 (GMT+3);
• – US Fed Chair Powell Speaks at 16:10 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 17:15 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1516
• Prev Close: 1.1516
• % chg. over the last day: 0.00 %

The plan of the new British Prime Minister Liz Truss was well received by the British pound yesterday. According to preliminary information, the new government plans to freeze Britain’s energy bills, which will cost the country 130 billion pounds. According to analysts, it will give a temporary boost to the British currency. Onward everything depends on the actions of the Bank of England.

• Support levels: 1.1449, 1.1400
• Resistance levels: 1.1561, 1.1669, 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 bearish. At the moment, the price is trading at the level of moving averages, and the MACD indicator is positive again. It is best to look for sell trades on intraday time frames, the nearest resistance level is 1.1561. Buy trades can be considered from the support level of 1.1449, but only with confirmation.

Alternative scenario: if the price breaks out through the 1.1670 resistance level and fixes above, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev Open: 142.70
• Prev Close: 143.74
• % chg. over the last day: +0.72 %

From a fundamental point of view, the situation remains the same. With inflation in Japan still subdued, traders are betting that the Bank of Japan will not lift a finger to stop the yen’s fall. Most importantly, wage growth and inflation expectations remain subdued, so it does not look like inflation will take root. Consequently, the Bank of Japan is convinced that this is a global supply shock that will soon dissipate. The Japanese yen has already lost 25% of its value against the dollar index this year. With regard to the implementation of currency intervention, such a move now seems unrealistic. First, Japan would have to intervene alone, because neither Europe nor the US would agree to loosen its monetary policy now. Second, individual intervention implies a lower probability of success, requiring tons of foreign exchange reserves, and may even have unpleasant consequences.

Trading recommendations

• Support levels: 142.83, 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 above the average lines, and the buyers’ pressure is still there. The MACD indicator remains positive, there is no sign of reversal. Under such market conditions buy trades can be sought from the support level of 142.83 or 141.77, but with additional confirmation. Sell deals can be considered on the intraday time frames from the psychological level of 145.00, but only with additional confirmation, as fundamentally, USD/JPY quotes are inclined to grow.

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

There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.3151
• Prev Close: 1.3118
• % chg. over the last day: -0.25 %

The Bank of Canada held its fourth consecutive interest rate hike in an attempt to lower inflation from a four-year high. Policymakers led by Governor Tiff Macklem raised the benchmark overnight rate by 75 basis points to 3.25% on Wednesday, giving Canada’s Central Bank the highest interest rate among major advanced economies. At the same time, officials said they expect rate hikes to continue in the coming months, but the next hikes are likely to have a small adjustment.

Trading recommendations

• Support levels: 1.3077, 1.3020, 1.2989, 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 now trading below the moving averages, the MACD indicator has become negative, and there is some seller pressure, but the latent divergence indicates that the price is difficult to move lower. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3077, but only with confirmation. The best way to sell is to consider the resistance level of 1.3220, but only after a false breakout, as the level has already been tested and a lot of liquidity has been formed above the level.

Alternative scenario: if the price breaks down and consolidates below the 1.3077 support level, the downtrend will likely resume.

News feed for 2022.09.08:

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

The EUR/USD currency pair

• Prev Open: 0.9921
• Prev Close: 0.9903
• % chg. over the last day: -0.18 %

The US service sector PMI Index rose to a four-month high due to increased demand. The dollar Index and Treasury yields rose sharply after strong economic data, with the 10-year Treasury yield reaching a new three-month high. This in turn, put negative pressure on the European currency, which is trading near multi-year lows again.

• Support levels: 0.9900
• Resistance levels: 0.9963, 0.9988, 1.0016, 1.0046, 1.0077, 1.0111, 1.0150

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. EUR/USD quotes are trading below parity. Technically, there is a formation of a wide balance with a range of 0.9912-1.0077, but the price is now trading below the level of 0.9912. The MACD indicator is in the negative zone, and selling pressure remains, but there are signs of divergence. Under such market conditions, it is better to look for buy trades on intraday time frames from the support level of 0.9912 after the price fixes higher. Sell trades can be considered from resistance levels of 0.9963 or 0.9988, but only after the additional confirmation.

Alternative scenario: if the price breaks out of the 1.0047 resistance level and fixes above, the uptrend will likely resume.

• – German Industrial Production (m/m) at 09:00 (GMT+3);
• – Eurozone GDP (q/q) at  2:00 (GMT+3);
• – US FOMC Member Mester Speaks (m/m) at 17:00 (GMT+3);
• – US FOMC Member Brainard Speaks (m/m) at 19:35 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1508
• Prev Close: 1.1517
• % chg. over the last day: +0.08 %

UK 10-year bond yields exceeded 3%, the highest level in over a decade, amid expectations that new Prime Minister Liz Truss will trigger a wave of government spending. Swaps related to the Bank of England policy meetings show that expectations of a rate hike have been rising steadily since early August, meaning that the key rate will more than double by the end of the year. There are fears that inflation, which was 10.1% in July, will spiral out of control, even after six consecutive rate hikes by policymakers.

• Support levels: 1.1500, 1.1400
• Resistance levels: 1.1669, 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 bearish. At the moment, the price is trading below the moving average levels, and below the psychological level of 1.1500, the MACD indicator is negative again. It is best to look for sell trades on intraday time frames, the nearest resistance level is 1.1500. Buy trades can be considered from the support level of 1.1500 if the price consolidates above the round level.

Alternative scenario: if the price breaks out through the 1.1670 resistance level and fixes above, the uptrend will likely resume.

• – UK BOE Monetary Policy Report (m/m) at 12:00 (GMT+3);
• – UK BOE Gov Bailey Speaks (m/m) at 12:00 (GMT+3).

The USD/JPY currency pair

• Prev Open: 140.57
• Prev Close: 142.78
• % chg. over the last day: +1.57 %

From a fundamental point of view, the Bank of Japan is firmly committed to its soft policy through its Yield Curve Control (YCC) program, while the US Fed continues to aggressively raise interest rates in an attempt to rein in inflation. And until the BoJ starts to worry about inflation or the Fed sees that the US economy has slowed enough to suspend rate hikes, these fundamental dynamics will continue to push USD/JPY quotes up. With 2-year Treasury yields hitting 3.50%, the highest level in 15 years, there is little sign of the fundamental momentum weakening yet. But after the yen plunged sharply yesterday, the Bank of Japan said it would increase its planned bond purchases as an escalating sell-off in Treasuries puts upward pressure on global yields and weakens the yen.

• Support levels: 142.83, 141.77, 141.00, 139.61, 138.78, 137.65, 136.80, 135.20
• Resistance levels: 144.00, 145.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading above the average lines, and the buyers’ pressure is still there. The MACD indicator remains positive, there is no sign of reversal. Under such market conditions, buy trades can be sought from the support level of 142.83 or 141.77, but with additional confirmation. Sell deals can be considered on the intraday time frames from the psychological level of 144.00, but only with additional confirmation, as fundamentally, USD/JPY quotes are inclined to grow.

Alternative scenario: If the price fixes below 139.61, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3134
• Prev Close: 1.3149
• % chg. over the last day: +0.11 %

The Bank of Canada will hold a monetary policy meeting today. The Bank of Canada is expected to raise its key rate by 75 basis points to 3.25% as another step in the fight against inflation. The focus is on whether the bank will call for further tightening or not. In its latest statement released July 13, the bank said, “The Board of Governors continues to believe that interest rates will need to be raised further, and the pace of the increase will be determined by the bank’s current assessment of the economy and inflation.” Going forward, analysts expect the BoC to pause in its October 26 policy decision.

• Support levels: 1.3157, 1.3077, 1.3020, 1.2989, 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 now trading above the moving averages, the MACD indicator is positive, and there is slight buying pressure. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3157, but only with confirmation. For sell deals, it is better to consider the resistance level of 1.3220, but only after a false breakout, as the level has already been tested, and a lot of liquidity has been formed above the level.

Alternative scenario: if the price breaks down and consolidates below the 1.3077 support level, the downtrend will likely resume.