InvestMacro

The EUR/USD currency pair

• Prev Open: 1.0159
• Prev Close: 1.0245
• % chg. over the last day: +0.84%

An important report on US Nonfarm Payrolls will be released today. Economists expect the US economy to have added about 250,000 jobs in July, up from 372,000 the previous month. The jobs report will also serve as an overview of the likely path of monetary policy action by the Federal Reserve, as the Сentral Bank emphasized the strength of the labor market as evidence that the economy remains resilient and able to withstand further rate hikes.

• Support levels: 1.0196, 1.0112, 1.0035, 1.0000
• Resistance levels: 1.0245, 1.0264, 1.0284, 1.0365, 1.0415, 1.050

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is still forming a wide volatile balance with the borders of 1.0112-1.0284. Buyer pressure increased significantly over yesterday. The MACD indicator became positive again. Under such market conditions, buy trades are best sought on intraday time frames from the support level of 1.0196. Sell trades can be considered from the resistance level of 1.0245 or 1.0264, but only after additional confirmation and only with short targets.

Alternative scenario: if the price breaks down through the 1.0112 support level and fixes below, the downtrend will likely resume.

• – German Industrial Production (m/m) at 09:00 (GMT+3);
• – US Nonfarm Payrolls (m/m) at 15:30 (GMT+3);
• – US Unemployment Rate (m/m) at 15:30 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2135
• Prev Close: 1.2158
• % chg. over the last day: +0.19%

The Bank of England raised the interest rate by 0.5% as expected. The rate is now at the level of 1.75%, higher than the ECB (0.5%) but lower than the US Federal Reserve (2.5%), the Canadian central bank (2.5%), and the Reserve Bank of New Zealand (2.5%). Normally when the interest rate rises, the national rate strengthens. Still, as mentioned earlier, the rate hike scenario was already built into the price movement, so the focus was on the Bank of England statement. Having produced the largest rate hike in nearly 30 years, the Bank of England suggested that it may be less decisive in raising rates in the coming months. The report also indicated that the UK would be in recession for more than a year under skyrocketing inflation, which caused traders to sell off the British currency yesterday.

• Support levels: 1.2114, 1.2114, 1.2063, 1.1907, 1.1803
• Resistance levels: 1.2167, 1.2209, 1.2294

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price is now balanced and trading between the moving averages. The MACD indicator has become inactive. Under such market conditions, it is better to look for buy trades on the intraday time frames from the support level of 1.2114, but only with confirmation. Sell trades can be considered from the resistance level of 1.2167, but only after additional confirmation and with short targets.

Alternative scenario: if the price breaks down through the 1.2063 support level and fixes below, the downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 133.85
• Prev Close: 132.92
• % chg. over the last day: -0.70%

A Reuters poll of strategists showed that 61% of participants believe that the rise in the Japanese yen against the US dollar since mid-July has been temporary. According to analysts, the yen is unlikely to strengthen in the short term as the Bank of Japan remains the exception among global central banks with its ultra-easy monetary policy. At the same time, the US Federal Reserve raises interest rates and will not complete its increases cycle until 2023.

• Support levels: 132.85, 132.12, 131.37, 130.85
• Resistance levels: 134.05, 135.29, 136.03, 137.11

From the technical point of view, the medium-term trend on the USD/JPY currency pair is bearish. But now the price has corrected to the average lines and is forming a balance. The MACD indicator has become inactive. Under such market conditions, buy trades can be sought from the support level of 132.85, but with additional confirmation. Resistance levels of 134.05 may be considered for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes above 135.29, the uptrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2838
• Prev Close: 1.2863
• % chg. over the last day: +0.19%

Canada’s trade surplus widened in June, but the Canadian dollar fell yesterday amid falling oil prices. The Canadian dollar is a commodity currency as oil is one of Canada’s main exports. Therefore, the Canadian currency is under pressure as a wave of sales has swept the crude oil markets. With crude oil inventories rising as the summer auto season draws close, investors are betting that oil prices could fall further in the coming months, negatively affecting the Canadian (USD/CAD rise).

• Support levels: 1.2832, 1.2803, 1.2786
• Resistance levels: 1.2871, 1.2929, 1.3006, 1.3085, 1.3154

In terms of technical analysis, the USD/CAD currency pair trend is bearish. At the moment, the price is forming a wide balance. The MACD indicator became positive, and there was an initiative of buyers. Under such market conditions, it is better to consider sell deals from the resistance level of 1.2871 but with confirmation. Buy trades should be considered on the lower time frames from the support level of 1.2832, but only with confirmation and short targets.

Alternative scenario: if the price breaks out and consolidates above the 1.2929 resistance level, the uptrend will likely resume.

• – Canada Unemployment Rate (m/m) at 15:30 (GMT+3);
• – Canada Ivey PMI (m/m) at 17:00 (GMT+3).

The EUR/USD currency pair

• Prev Open: 1.0164
• Prev Close: 1.0168
• % chg. over the last day: +0.04%

The US Dollar Index rose on Wednesday after data showed an unexpected recovery in US PMI services in July, which provided further support for the currency after hawkish comments from Federal Reserve officials on Tuesday. With the US Federal Reserve tightening monetary policy, the US dollar is both a source of growth and a safe haven for investors, especially during a war between Ukraine and Russia and new geopolitical tensions between China and Taiwan.

• Support levels: 1.0112, 1.0035, 1.0000
• Resistance levels: 1.0179, 1.0264, 1.0284, 1.0365, 1.0415, 1.050

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is still forming a wide volatile balance, but buyers’ pressure has changed to sellers’ initiative. The MACD indicator has become negative. Under such market conditions, buy trades are best sought on intraday time frames from the support level of 1.0112. Sell trades can be considered from the resistance level of 1.0179, but only after additional confirmation and only with short targets.

Alternative scenario: if the price breaks down through the 1.0112 support level and fixes below, the downtrend will likely resume.

• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US FOMC Member Mester Speaks (m/m) at 19:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2164
• Prev Close: 1.2146
• % chg. over the last day: -0.15%

The Bank of England is preparing for its biggest interest rate hike in 27 years because of rising inflation. The BoE is expected to raise interest rates by 50 basis points today, the most considerable increase since 1995. The probability of such a scenario is 70%. So, if 50 basis points raise the rate, the cost of borrowing will rise to 1.75%. This scenario is likely already priced in, and the most important event will be the speech of the governor of the Bank of England, Andrew Bailey. He will voice his views on further easing monetary policy and how quickly the Bank of England will reduce its balance sheet.

• Support levels: 1.2114, 1.2114, 1.2063, 1.1907, 1.1803
• Resistance levels: 1.2167, 1.2209, 1.2294

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame is bullish. The price is now balanced and trading between the moving averages. The MACD indicator is in the negative zone, and there is an initiative from the sellers. Under such market conditions, it is better to look for buy trades on the intraday time frames from the support level of 1.2114, but only with confirmation since the level was tested yesterday. Sell trades can be considered from the resistance level of 1.2167 or 1.2209, but only after additional confirmation and with short targets.

Alternative scenario: if the price breaks down through the 1.2063 support level and fixes below, the downtrend will likely resume.

• – UK Construction PMI (m/m) at 11:30 (GMT+3);
• – UK BoE Inflation Report (m/m) at 14:00 (GMT+3);
• – UK BoE Interest Rate Decision (m/m) at 14:00 (GMT+3);
• – UK BoE Monetary Policy Statement (m/m) at 14:00 (GMT+3);
• – UK BoE Gov Bailey Speaks at 14:30 (GMT+3).

The USD/JPY currency pair

• Prev Open: 133.14
• Prev Close: 133.85
• % chg. over the last day: +0.53%

The USD/JPY currency pair is returning to an upward movement amid renewed dollar growth. Fundamentally, the difference in the interest rates and diametrically opposite monetary policies between the United States and Japan contributes to the growth of quotes. Most likely, no significant changes are planned before the end of the year.

• Support levels: 132.12, 131.37, 130.85
• Resistance levels: 135.29, 136.03, 137.11

From the technical point of view, the medium-term trend on the USD/JPY currency pair is bearish. But in the last two trading sessions, the dollar is getting stronger, and now the price is trading between the moving averages. The MACD indicator is in the positive zone, and buyer pressure is increasing. Under such market conditions, buy trades can be sought from the support level of 132.12, but with additional confirmation. Resistance levels of 135.29 may be considered for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes above 135.29, the uptrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2874
• Prev Close: 1.2840
• % chg. over the last day: -0.26%

The Canadian dollar is a commodity currency that highly depends on the US Dollar Index and oil prices. Oil prices decreased by 3% yesterday after an unexpected 4.5 million barrels increase in inventories last week (forecast +600K), while the US Dollar Index increased on rising geopolitical tensions in Asia. As a result, the USD/CAD quotes demonstrated growth, but the end of the trading day was for the Canadian. Investors should consider the fact that the interest rates of the Bank of Canada and the US Federal Reserve are now at the same level. This means traders should not expect medium-term trends in this currency pair.

• Support levels: 1.2803, 1.2786
• Resistance levels: 1.2880, 1.2929, 1.3006, 1.3085, 1.3154

In terms of technical analysis, the USD/CAD currency pair trend is bearish. At the moment, the price is forming a wide balance. The MACD indicator became positive, and there was an initiative of buyers. Under such market conditions, it is better to consider sell deals from the resistance level of 1.2880, but with confirmation. Buy trades should be considered on the lower time frames from the support level of 1.2803 or 1.2789, but only with confirmation and short targets.

Alternative scenario: if the price breaks out and consolidates above the 1.2929 resistance level, the uptrend will likely resume.

The EUR/USD currency pair

• Prev Open: 1.0261
• Prev Close: 1.0165
• % chg. over the last day: -0.94%

New tensions between the US and China triggered a rise in the US dollar. Investors returned to safe-haven assets yesterday amid growing tensions between the US and China over a visit by the US speaker to the island of Taiwan, which China considers its territory. Also, the dollar was strengthened by Fed officials’ statements, which indicated that a 0.75% rate hike at the September meeting is also under active consideration. A possible economic slowdown is needed to slow inflation. The euro and other assets fell against the dollar.

• Support levels: 1.0112, 1.0035, 1.0000
• Resistance levels: 1.0191, 1.0264, 1.0284, 1.0365, 1.0415, 1.050

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is still forming a wide volatile balance, but the sellers’ initiative has replaced the buyers’ pressure. The MACD indicator has become negative. Under such market conditions, buy trades are best sought on intraday time frames from the support level of 1.0112. Sell trades can be considered from the resistance level of 1.0191 or 1.0264, but only after additional confirmation and only with short targets.

Alternative scenario: if the price breaks down through the 1.0112 support level and fixes below, the downtrend will likely resume.

• – US FOMC Member Bullard Speaks (m/m) at 01:45 (GMT+3);
• – German Services PMI (m/m) at 10:55 (GMT+3);
• – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
• – Eurozone Retail Sales (m/m) at 12:00 (GMT+3);
• – US ISM Services PMI (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2241
• Prev Close: 1.2161
• % chg. over the last day: -0.65%

The Bank of England will hold its monetary policy and interest rate meeting tomorrow. Five consecutive 25 basis point hikes have raised the bank rate to 1.25%, but actual inflation continues to rise, and inflation expectations remain dangerously high. Three bank officials last time wanted a 50 basis point increase, and with the economy’s apparent growing problems, a majority may now favor a larger move. Also, tomorrow, the Bank of England is due to present a plan to reduce its balance sheet. QE is still a whopping £843.8 billion, and just last month, Bank of England Governor Bailey said that the Central Bank was considering cutting its assets.

• Support levels: 1.2152, 1.2114, 1.2114, 1.2063, 1.1907, 1.1803
• Resistance levels: 1.2203, 1.2294

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame is bullish. The price is now balanced and trading between the moving averages. The MACD indicator is in the negative zone, and there is an initiative from the sellers. Under such market conditions, it is better to look for buy trades on the intraday time frames from the support level 1.2152 or 1.2114, but only with confirmation. Sell trades can be considered from the resistance level of 1.2203, but only after additional confirmation and with short targets.

Alternative scenario: if the price breaks down through the 1.2006 support level and fixes below, the downtrend will likely resume.

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

The USD/JPY currency pair

• Prev Open: 131.69
• Prev Close: 133.15
• % chg. over the last day: +1.11%

The Japanese yen was on track for its biggest gain since the coronavirus crisis in March 2020, as growing tensions between the US and China over Taiwan and deepening fears of a global economic slowdown increased the appeal of safe-haven assets. Against the dollar, the Japanese currency brought its cumulative gains to nearly 4.5% in five trading sessions. But the US dollar is also a safe-haven currency, so yesterday, it closed the day in the background of the dollar index growth. It is also worth keeping in mind that the US Federal Reserve is on the path to higher interest rates, while the Bank of Japan keeps its monetary policy soft. Such opposite policy plays in favor of USD/JPY quotes growth.

• Support levels: 132.42, 131.37, 130.85
• Resistance levels: 133.17, 134.00, 135.29, 136.03, 137.11

From the technical point of view, the medium-term trend on the USD/JPY currency pair is bearish. In the last trading sessions, the Japanese yen has strengthened, but yesterday the dollar intercepted the initiative. The MACD indicator became positive. Under such market conditions, buy trades can be sought from the support level of 132.42 or 131.37, but with additional confirmation. Resistance levels of 134.00 may be considered for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes above 135.29, the uptrend will likely resume.

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

The USD/CAD currency pair

• Prev Open: 1.2841
• Prev Close: 1.2879
• % chg. over the last day: +0.29%

USD/CAD quotes increased yesterday on the back of a rising dollar and because of lower oil prices. The Canadian weakness was also affected by the manufacturing data. The manufacturing PMI fell from 54.6 to 52.5. The latest survey showed a new decline in production and new orders, while employment growth slowed. The sector was hit particularly hard in July by a drop in export sales. Cost pressures continued on the price front, with higher material, food, and transportation costs often cited as the main drivers of inflation.

• Support levels: 1.2786
• Resistance levels: 1.2880, 1.2923, 1.3006, 1.3085, 1.3154

In terms of technical analysis, the USD/CAD currency pair trend is bearish. At the moment, the price is forming a wide balance. The MACD indicator became positive, and there was an initiative of buyers. Under such market conditions, it is better to consider sell deals from the resistance level of 1.2880, but with confirmation. Buy trades should be considered on the lower time frames from the support level of 1.2786 or from the lower border of the channel, but only with confirmation and short targets.

Alternative scenario: if the price breaks out and consolidates above the 1.3006 resistance level, the uptrend will likely resume.

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

The EUR/USD currency pair

• Prev Open: 1.0212
• Prev Close: 1.0260
• % chg. over the last day: +0.47%

European manufacturing PMI dipped below the level of 50 in July. This usually means that a country is approaching a recession. It is a preliminary and rough indicator, but the statistics show that a drop of 50 triggers recessive processes in the country. The Central Bank has begun to work toward easing monetary policy. In Spain, the Index fell from 52.6 to 48.7, Italy from 50.9 to 48.5, France from 49.6 to 49.5, Germany from 52 to 49.3, and the overall Eurozone PMI fell from 52.1 to 49.8. With the ECB just starting to tighten monetary policy and raise interest rates, Europe will slowly deepen into recession. Winter will not be easy for Europe.

• Support levels: 1.0112, 1.0035, 1.0000
• Resistance levels: 1.0284, 1.0365, 1.0415, 1.050

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is still forming a wide volatile balance, and buyer pressure prevails now. The MACD indicator is in the positive zone. Under such market conditions, buy trades are best sought on intraday time frames from the support level of 1.0112. Sell trades can be considered from the resistance level of 1.0284, but only after additional confirmation and only with short targets.

Alternative scenario: if the price breaks down through the 1.0112 support level and fixes below, the downtrend will likely resume.

• – US JOLTs Job Openings (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2164
• Prev Close: 1.2254
• % chg. over the last day: +0.74%

The UK manufacturing PMI declined from 52.8 to 52.1, which is better than the rest of Europe. Output fell for the first time in more than two years as new orders and export shipments continued to fall. The PMI held above the 50 mark thanks to faster job growth, increased inventories of purchases, and longer lead times for suppliers. Manufacturing output declined for the first time since May 2020, largely reflecting the downturn in the consumer and intermediate goods sub-sectors.

• Support levels: 1.2203, 1.2150, 1.2114, 1.2063, 1.1907, 1.1803
• Resistance levels: 1.2294

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame is bullish. The price reached the daily resistance level. The MACD indicator is in the positive zone but shows signs of divergence already in several time frames. Under such market conditions, it is better to look for buy trades on the intraday time frames from the support level 1.2203, but only with confirmation. Sell trades can be considered from the resistance level of 1.2294, but only after additional confirmation and with short targets.

Alternative scenario: if the price breaks down through the 1.2006 support level and fixes below, the downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 133.25
• Prev Close: 131.60
• % chg. over the last day: -1.25%

The Japanese yen is strengthening amid a decline in US yields. The dollar also declined, falling to its lowest level in two months. Nervousness over an upcoming visit to Taiwan by US House Speaker Nancy Pelosi also led to an influx of capital into the yen and put pressure on other Asian currencies. However, it should not be noted that the difference between the US and Japanese interest rates is not in favor of the Japanese yen, so at any time, upward movement on the currency pair USD/JPY may resume.

• Support levels: 130.85
• Resistance levels: 131.37, 133.17, 134.00, 135.10, 136.03, 137.11

From the technical point of view, the medium-term trend on the USD/JPY currency pair is bearish. In the last trading sessions, the Japanese yen is getting stronger. The MACD indicator is in the negative zone, and the sellers’ pressure is still there, but there are signs of divergence. Under such market conditions, buy trades can be sought from the support level of 130.85, but with additional confirmation. Resistance levels of 131.37 may be considered for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes above 136.03, the uptrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2808
• Prev Close: 1.2837
• % chg. over the last day: +0.22%

Oil decreased by almost 5% due to negative Chinese data. China is the world’s largest importer of crude oil, while the Canadian dollar is a commodity currency and depends on oil prices. Falling oil prices are weakening the Canadian dollar. It also should be noted that the Central Banks of the US and Canada keep their interest rates at the same level (2.5%), so there is no significant imbalance in this currency pair to form a long-term trend. At the same time, employment growth in Canada could affect the USD/CAD exchange rate as the Bank of Canada (BoC) wants to accelerate the path to higher interest rates. An improvement in the labor market could lead to a more aggressive rate hike.

• Support levels: 1.2786
• Resistance levels: 1.2880, 1.2923, 1.3006, 1.3085, 1.3154

In terms of technical analysis, the USD/CAD currency pair trend is bearish. At the moment, the price is forming a wide balance. The MACD indicator is in the negative zone, but there is a divergence, which indicates that it is harder for the price to move lower. Under such market conditions, it is better to consider sell deals from the resistance level of 1.2880, but with confirmation. Buy trades should be considered on the lower time frames from the support level of 1.2786 or from the lower border of the channel, but only with confirmation and short targets.

Alternative scenario: if the price breaks out and consolidates above the 1.3006 resistance level, the uptrend will likely resume.