InvestMacro

The EUR/USD currency pair

• Prev Open: 0.9966
• Prev Close: 0.9967
• % chg. over the last day: +0.01%

Dutch gas prices, the European benchmark, rose again on Wednesday as the prospect of a Nord Stream 1 supply cut kept investors on edge. Russia’s state energy company Gazprom said on Friday that Russia would suspend natural gas supplies to Europe via Nord Stream 1 for three days due to unscheduled maintenance. The spike in gas prices continues to pressure the region’s economy and the European currency in particular. Also, the difference in interest rates between the US Federal Reserve (2.5%) and the ECB (0.5%) affects the decrease in the quotes.

• Support levels: 0.9932
• Resistance levels: 0.9996, 1.0112, 1.0146, 1.0230, 1.0286, 1.0365

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The price is now forming a wide balance. The MACD indicator has become positive, and buying pressure prevails. Under such market conditions, buy trades are best to be sought on intraday time frames from the support level of 0.9932, but with confirmation. Sell trades can be considered from resistance levels of 0.9996, but only after additional confirmation, as the level has already been tested twice.

Alternative scenario: if the price breaks out of the 1.0146 resistance level and fixes above, the uptrend will likely resume.

• – Eurozone Germany GDP (q/q) at 09:00 (GMT+3);
• – Eurozone Germany Ifo Business Climate (m/m) at 11:00 (GMT+3);
• – Eurozone ECB Monetary Policy Meeting at 14:30 (GMT+3);
• – US GDP (q/q) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – Jackson Hole Symposium at 16:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1825
• Prev Close: 1.1791
• % chg. over the last day: +0.29%

Traders are betting that the ECB and Bank of England will be forced to take bolder action to rein in rising prices. Markets have increased bets on a rate hike for the Bank of England, betting that interest rates will rise to 3.5% by the end of the year. The option model shows a 60% chance that the pound will fall to $1.14 by the end of the year, the lowest level since 1985. The economy is approaching recession, energy prices continue to skyrocket, and uncertainty about who will be the next prime minister are all factors creating a bearish mood for the British currency.

• Support levels: 1.1786, 1.1659
• Resistance levels: 1.1903, 1.2000, 1.2035, 1.2167, 1.2215, 1.2294

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price is now forming an accumulation zone. The MACD indicator has become positive, and sellers’ pressure has slightly decreased, but the main priority is still downward. At the moment, it is better to look for sell deals from the resistance level of 1.1903, but only after the additional confirmation. Buy trades can be considered on intraday time frames from the support level of 1.1786, but only with confirmation and short targets.

Alternative scenario: if the price breaks out through the 1.2000 resistance level and fixes above, the uptrend will likely resume.

The USD/JPY currency pair

• Prev Open: 136.76
• Prev Close: 137.12
• % chg. over the last day: +0.26%

Bank of Japan board member Toyoaki Nakamura said on Thursday that a new surge in pandemic cases clouds Japan’s economic outlook, continued supply constraints, and a steady rise in global commodity prices. So the Bank of Japan should maintain a large-scale stimulus to support the economy. Nakamura said that market worries about aggressive interest rate hikes by major central banks to curb inflation could also trigger capital outflows from emerging economies and hurt global growth.

• Support levels: 135.89, 135.35, 134.23, 133.47, 132.27, 131.08, 130.85
• Resistance levels: 137.01, 137.43, 138.25

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The USD/JPY quotes have corrected to the levels of the moving averages and are forming a balance. Under such market conditions, buy trades can be sought from the support level of 135.89 or 135.35, but with additional confirmation. For sell deals, traders can consider the resistance level of 137.01, but only with additional confirmation, as fundamentally, USD/JPY quotes are inclined to grow.

Alternative scenario: If the price fixes below 135.35, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2955
• Prev Close: 1.2971
• % chg. over the last day: +0.12%

The US Energy Information Administration reported a 3.3 million barrel drop in crude oil inventories last week. The Canadian dollar is a commodity currency that highly depends on oil prices. Also, yesterday it became known that the OPEC countries will fight the low oil prices, and if Iranian oil comes back to the world market, OPEC is ready to cut its production not to let the oil prices fall drastically. Therefore, the Canadian dollar, in addition to monetary tightening by the Bank of Canada, also has fundamental support in keeping oil prices from falling.

• Support levels: 1.2900, 1.2858, 1.2809, 1.2761
• Resistance levels: 1.2998, 1.3016, 1.3090, 1.3105

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is now trading at the levels of the moving averages, with the sellers’ pressure temporarily prevailing. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.2900, but only with confirmation. For sell deals, it is better to consider the resistance level of 1.2998.

Alternative scenario: if the price breaks down and consolidates below the 1.2900 support level, the downtrend will likely resume.

The EUR/USD currency pair

• Prev Open: 0.9939
• Prev Close: 0.9967
• % chg. over the last day: +0.28%

The US manufacturing PMI fell to 51.3 from 52.2 in August, while the services sector declined to 44.1 from 47.3, the lowest level since February 2021. Eurozone data is slightly better but also showed a downward trend. Thus, the index of business activity in the manufacturing sector of the Eurozone decreased from 49.8 to 49.7, and the services sector decreased from 51.2 to 50.2. Falling below the 50 bps level is the first sign that the economy is on the recession threshold.

• Support levels: 0.9949
• Resistance levels: 0.9996, 1.0112, 1.0146, 1.0230, 1.0286, 1.0365

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. But yesterday, the price showed a bullish impulse, forming an accumulation zone below. The MACD indicator has become inactive, and the sellers’ pressure is still high, but the divergence is observed. In such market conditions, it is better to look for buy trades on the intraday time frames from the support level of 0.9996, but with confirmation. Sell trades can be considered from resistance levels of 0.9956, but only after the additional confirmation.

Alternative scenario: if the price breaks out of the 1.0146 resistance level and fixes above, the uptrend will likely resume.

• – US Core Durable Goods Orders (m/m) at 15:30 (GMT+3);
• – US Pending Home Sales (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1761
• Prev Close: 1.1830
• % chg. over the last day: +0.59%

The UK manufacturing PMI fell sharply from 52.1 to 46. The decline was less painful in the service sector, from 52.6 to 52.5. The sharp slowdown in manufacturing is a direct consequence of the energy crisis in the country. According to JPMorgan Private Bank, the pound risks falling to 1.14 against the dollar if the winter gas supply crisis pushes the UK into recession.

• Support levels: 1.1786, 1.1659
• Resistance levels: 1.1903, 1.2000, 1.2035, 1.2167, 1.2215, 1.2294

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. Now the price has formed an accumulation zone with a bullish impulse, where traders can look for buy deals. The MACD indicator has become positive, and sellers’ pressure has decreased slightly, though the main priority is still downward. At the moment, it is better to look for sell deals from the resistance level of 1.1903, but only after the additional confirmation. Buy trades can be considered on intraday time frames from the support level of 1.1786, but only with confirmation and short targets.

Alternative scenario: if the price breaks out through the 1.2006 resistance level and fixes above, the uptrend will likely resume.

The USD/JPY currency pair

• Prev Open: 137.43
• Prev Close: 136.74
• % chg. over the last day: -0.50%

The Japanese yen gained some strength yesterday due to the dollar decline. But investors shouldn’t consider this movement as a full trend reversal, as fundamentally, the Japanese yen is getting cheaper due to the soft, adaptive policy of the Bank of Japan, while the US Federal Reserve conducts an aggressive tightening policy.

• Support levels: 135.89, 135.35, 134.23, 133.47, 132.27, 131.08, 130.85
• Resistance levels: 137.03, 137.43, 138.25

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. Yesterday, USD/JPY quotes were corrected to the moving averages’ levels. Under such market conditions, buy trades can be sought from the support level of 135.35, but with additional confirmation. For sell deals, traders can consider the resistance level of 137.03, but only with additional confirmation, as fundamentally, USD/JPY quotes are inclined to grow.

Alternative scenario: If the price fixes below 135.35, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3045
• Prev Close: 1.2957
• % chg. over the last day: -0.67%

The Canadian dollar strengthened considerably yesterday due to a decline in the dollar index and an increase in oil prices. Oil prices jumped more than $3 a barrel on Tuesday after Saudi Arabia floated the idea of OPEC+ production cuts to support prices in case Iranian oil returns to the world market and the prospect of US inventories declining.

• Support levels: 1.2967, 1.2900, 1.2858, 1.2809, 1.2761
• Resistance levels: 1.3006, 1.3090, 1.3105

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. Yesterday the price formed a false-breakout zone above the resistance level of 1.3006, which can be used as a selling point now. Buy trades should be considered on the lower time frames from the support level of 1.2967, but only with a confirmation.

Alternative scenario: if the price breaks down and consolidates below the 1.2903 support level, the downtrend will likely resume.

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

The EUR/USD currency pair

• Prev Open: 1.0035
• Prev Close: 0.9942
• % chg. over the last day: -0.93%

The dollar index continues to strengthen as several Federal Reserve officials reiterated an aggressive stance on monetary policy tightening ahead of the Fed’s symposium in Jackson Hole. As investors are now clearly expecting a relatively hawkish message from Fed Chairman Jerome Powell in Jackson Hole on Friday, there is a sell-off in risky assets and a buy of defensive ones. The euro is also negatively affected by the energy crisis in Europe. As a result, the euro fell to a 20-year low yesterday.

• Support levels: 0.9806
• Resistance levels: 0.9990, 1.0112, 1.0146, 1.0230, 1.0286, 1.0365

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The euro continues to lose ground. The MACD indicator is in the negative zone, and sellers’ pressure is still high. Under such market conditions, it is better to look for buy trades on the intraday time frames from the support level of 0.9806, but with a confirmation in the form of reverse initiative. Sell trades can be considered from resistance levels of 0.9990, but only after the additional confirmation.

Alternative scenario: if the price breaks out of the 1.0146 resistance level and fixes above, the uptrend will likely resume.

• – Eurozone French Manufacturing PMI (m/m) at 10:15 (GMT+3);
• Eurozone French Services PMI (m/m) at 10:15 (GMT+3);
• – Eurozone Germany Manufacturing PMI (m/m) at 10:30 (GMT+3);
• – Eurozone Germany Services PMI (m/m) at 10:30 (GMT+3);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
• – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
• – US Manufacturing PMI (m/m) at 16:45 (GMT+3);
• – US Services PMI (m/m) at 16:45 (GMT+3);
• – US New Home Sales (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1816
• Prev Close: 1.1764
• % chg. over the last day: -0.44%

The pound sterling and inflation rates have fallen to record levels due to the UK energy crisis. The British currency against the dollar fell to its lowest level since March 2020. Traders are increasingly concerned about a prolonged decline in energy supplies, exacerbating inflation, which is already at its highest level in decades. The UK also faces uncertainty over government policy as a new prime minister will be elected next month. Weak PMI data today could further exacerbate the sell-off in the pound. HSBC Bank Plc expects the British currency to trade at $1.16 in the first quarter of 2023.

• Support levels: 1.1659
• Resistance levels: 1.1801, 1.1903, 1.2000, 1.2035, 1.2167, 1.2215, 1.2294

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price is trading below the moving averages, indicating selling pressure. The MACD indicator has become negative, but there are signs of divergence. At the moment, it is better to look for sell trades from the resistance level of 1.1801, but only after the additional confirmation. Buy trades can be considered on intraday time frames from the support level of 1.1659, but only with confirmation.

Alternative scenario: if the price breaks out through the 1.2006 resistance level and fixes above, the uptrend will likely resume.

• – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
• – UK Services PMI (m/m) at 11:30 (GMT+3).

The USD/JPY currency pair

• Prev Open: 136.85
• Prev Close: 137.49
• % chg. over the last day: +0.47%

The USD/JPY quotes are trading near a 52-week high. The growth of the dollar index against the background of the US Federal Reserve’s tightening of the monetary policy on the one hand and the adaptive soft monetary policy of the Bank of Japan, on the other hand, contribute to the growth of USD/JPY quotes. The Business Activity Index in the manufacturing and services sectors dropped below 50, indicating a serious slowdown in business processes in Japan.

• Support levels: 135.89, 135.35, 134.23, 133.47, 132.27, 131.08, 130.85
• Resistance levels: 137.43, 138.25

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The USD/JPY quotes continue to grow steadily, breaking through all the resistance levels. Under such market conditions, buy trades can be sought from the support level of 135.89, but with additional confirmation. For sell deals, it is possible to consider the resistance level of 137.43. Still, only with additional confirmation in the form of a reverse initiative, as fundamentally, USD/JPY quotes are inclined to grow.

Alternative scenario: If the price fixes below 135.35, the downtrend will likely resume.

• – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
• – Japan Services PMI (m/m) at 03:30 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.2981
• Prev Close: 1.3052
• % chg. over the last day: +0.55%

The Canadian dollar is under pressure as the dollar index rises and oil prices plummet. The Canadian dollar is a commodity currency, so it depends not only on the decision of the Canadian Central Bank but also on oil prices. Fears that Iranian oil may return to the world market have caused crude oil prices to approach six-month lows on Monday.

• Support levels: 1.3006, 1.2900, 1.2858, 1.2809, 1.2761
• Resistance levels: 1.3090, 1.3105

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The MACD indicator is in the positive zone, and the buyers’ pressure remains, but there are signs of divergence. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3006, but only with confirmation. For sell deals, it is better to consider the resistance level of 1.3105 but also with a confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks down and consolidates below the 1.2903 support level, the downtrend will likely resume.