InvestMacro

The EUR/USD currency pair

• Prev Open: 1.0114
• Prev Close: 1.0198
• % chg. over the last day: +0.83%

The US central bank raised rates by three-quarters of a percentage point for the second session in a row to rein in record inflation but noted that while the labor market remains strong, other economic indicators have deteriorated. According to the Fed gov, there are no signs of a recession at this time. At the press conference, Fed Chairman Jerome Powell supported the idea that the central bank will hold another rate hike in September, although he said that a slower pace of increases might be needed. According to the CME FedWatch Tool, expectations for a 50 basis point hike at the September Fed meeting rose to 60.9%, up from 50.7% the day before.

• Support levels: 1.0170, 1.0142, 1.0035, 1.0000
• Resistance levels: 1.0202, 1.0250, 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 has become positive. Under such market conditions, buy trades are best sought on intraday time frames from the support level of 1.0170 or 1.0142. Sell trades can be considered from the resistance level of 1.0202, only after additional confirmation and with short targets.

Alternative scenario: if the price breaks down through the 1.0035 support level and fixes below, the downtrend will likely resume.

• – US GDP (q/q) at 15:30 (GMT+3);
• – US Treasury Sec Yellen Speaks at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2016
• Prev Close: 1.2155
• % chg. over the last day: +1.16%

The British pound rose sharply yesterday as the dollar fell after the FOMC meeting. But traders should remember that the interest rate of the central bank of England is now at 1.25%, while the US Federal Reserve’s interest rate is 2.5%, which is twice as much. Such differences can’t pass in vain for the British currency, so analysts expect a decline in GBP/USD quotes in the coming weeks.

• Support levels: 1.2089, 1.2063, 1.1907, 1.1803
• Resistance levels: 1.2238, 1.2294

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. Buyer pressure remains. 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 1.2089 or 1.2063, but only with confirmation. Sell trades can be considered from the resistance level of 1.2238, but only after additional confirmation and with short targets.

Alternative scenario: if the price breaks down through the 1.1907 support level and fixes below, the downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 136.89
• Prev Close: 136.60
• % chg. over the last day: -0.22%

Despite the decline in the US Dollar Index yesterday, analysts are still confident in a further rise in USD/JPY quotes as the US and Japanese central banks are moving in different directions. The US Fed is planning another rate hike in September, while the Japanese bank does not intend to tighten its policy until the end of the year.

• Support levels: 134.64, 134.11
• Resistance levels: 135.88, 136.62, 137.11, 138.25

From the technical point of view, the medium-term trend on the USD/JPY currency pair is bearish. But it should be noted that the fall in the USD/JPY quotes is not accompanied by any fundamental factors, so traders should be careful. The MACD indicator has become negative, and the sellers’ pressure is still there, but there are signs of divergence. Under such market conditions, buy trades can be sought intraday from the lower boundary of the descending channel or the support level of 134.64, but with additional confirmation. Resistance levels of 135.88 or 136.62 may be considered for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes above 138.25, the uptrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.2886
• Prev Close: 1.2822
• % chg. over the last day: -0.50%

When the US Dollar Index is falling, and oil prices are rising, it is a green light for the Canadian currency because the Canadian is a commodity currency and is directly dependent on these indicators. Now the interest rates of the central banks of the USA and Canada are at the same level, so the price will keep a certain balance without significant trends.

• Support levels: 1.2781
• Resistance levels: 1.2880, 1.2923, 1.3006, 1.3085, 1.3154

In terms of technical analysis, the trend on the USD/CAD currency pair is bearish. Currently, the price is forming a wide balance and trading on the lower border of the descending channel. The MACD indicator is negative again, 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 1.2781 or 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.

The EUR/USD currency pair

• Prev Open: 1.0215
• Prev Close: 1.0117
• % chg. over the last day: -0.96%

TOn Tuesday, the dollar rose against a basket of major currencies ahead of an important US Federal Reserve meeting. At the same time, concerns about the possibility of another reduction in Russian gas supplies put pressure on the euro. Hedge fund EDL Capital is betting that the euro will fall to 80 cents to the dollar as rampant inflation fuels volatility in politics and bond markets, which could test the region’s unity. The EDL founder points out that risks related to Russian gas supplies will lead to record inflation in Europe, causing aggressive rate hikes during the recession and forcing Germany to potentially forego the cost of maintaining Eurozone unity.

• Support levels: 1.0120, 1.0035, 1.0000
• Resistance levels: 1.0171, 1.0202, 1.0250, 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 forming a wide balance, but there is seller pressure. The MACD indicator has become negative. Under such market conditions, it is best to look for buy trades on intraday time frames from the support level of 1.0120, but only with confirmation. Sell trades can be considered from the resistance level of 1.0171 or 1.0202, but only after additional confirmation and only with short targets.

Alternative scenario: if the price breaks down through the 1.0035 support level and fixes below, the downtrend 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);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• – US FOMC Statement at 21:00 (GMT+3);
• – US Fed Interest Rate Decision at 21:00 (GMT+3);
• – US FOMC Press Conference at 21:30 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2035
• Prev Close: 1.2025
• % chg. over the last day: -0.08%

On Tuesday, the pound sterling hit a two-week high as analysts assessed the prospect of a 50 basis point rate hike by the Bank of England amid a deteriorating economic outlook. But there is also the other side. The worsening economic outlook will pressure the Bank of England to take a less hawkish stance. A Reuters poll of economists indicates that the Bank of England will stick to a gradual 0.25% hike. Currently, the interest rate differential between the US Fed and the Bank of England is in favor of lower GBP/USD quotes.

• Support levels: 1.2027, 1.1907, 1.1803
• Resistance levels: 1.2056, 1.2085, 1.2137

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. Buyers’ pressure remains, but there was a false break out of yesterday’s highs. The MACD indicator shows signs of divergence. Under such market conditions, buy trades are best to look at intraday time frames from the support level of 1.2027, but only with confirmation. Sell trades can be considered from the resistance level of 1.2056, but only after additional confirmation and with short targets.

Alternative scenario: if the price breaks down through the 1.1907 support level and fixes below, the downtrend will likely resume.

• – US FOMC Statement at 21:00 (GMT+3);
• – US Fed Interest Rate Decision at 21:00 (GMT+3);
• – US FOMC Press Conference at 21:30 (GMT+3).

The USD/JPY currency pair

• Prev Open: 136.65
• Prev Close: 136.92
• % chg. over the last day: +0.20%

The US Federal Reserve will raise rates by 0.75-1% today, further widening the gap between the US and Japanese central banks. For the Japanese yen, fundamentally, there is no reason to strengthen right now, as the Bank of Japan is still sticking to its soft monetary policy and is not going to take a hawkish stance anytime soon.

• Support levels: 136.70, 135.99, 135.40, 134.64, 134.11
• Resistance levels: 137.26, 137.81, 138.25, 138.56, 140.29

From the technical point of view, the medium-term trend on the USD/JPY currency pair is bearish. Any fundamental factors do not accompany the fall in the USD/JPY quotes, so traders should be careful. The price is now trading between the moving averages. The MACD indicator has become positive. Under such market conditions, buy trades can be searched for intraday from the support level of 136.70, but with additional confirmation. For sell deals, traders can consider the resistance level of 137.26 or 137.81, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes above 138.25, the uptrend will likely resume.

• – US FOMC Statement at 21:00 (GMT+3);
• – US Fed Interest Rate Decision at 21:00 (GMT+3);
• – US FOMC Press Conference at 21:30 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.2845
• Prev Close: 1.2883
• % chg. over the last day: +0.29%

The Canadian dollar is a commodity currency highly dependent on the US Dollar Index and oil prices. The US Dollar Index got stronger yesterday in anticipation of the Fed meeting on the interest rate, and oil, on the contrary, went down as the United States is selling more reserves amid the worsening of the economic statistics. As a result, the USD/CAD quotes increased. It should be noted that after the US Fed rate hike of 0.75%, the central banks of the US and Canada will have rates at the same level. Therefore, traders should expect a wide sideways movement on this currency pair without any single dynamics in the coming weeks.

• Support levels: 1.2840, 1.2781
• Resistance levels: 1.2912, 1.3006, 1.3085, 1.3154

In terms of technical analysis, the trend on the USD/CAD currency pair is bearish. At the moment, the price is forming a wide balance and is trading at the levels of the moving lines. The MACD indicator has become inactive again. Under such market conditions, it is best to consider sell deals from the resistance level of 1.2912, but with confirmation. Buy trades should be considered on the lower time frames from the support level 1.2840, 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 be resume.

• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• – US FOMC Statement at 21:00 (GMT+3);
• – US Fed Interest Rate Decision at 21:00 (GMT+3);
• – US FOMC Press Conference at 21:30 (GMT+3).

The EUR/USD currency pair

• Prev Open: 1.0208
• Prev Close: 1.0218
• % chg. over the last day: -0.10%

The US central bank has no reason to get more hawkish, especially as the economy may be on the verge of recession. According to analysts, lower inflation expectations and an expected decline in the consumer price index are imminent in the coming months. It means that the Fed’s peak hawkishness has likely passed, removing a powerful bullish catalyst from the US dollar. On that basis, the most likely scenario of this week’s Fed meeting will be a 75 basis point rate hike. And this scenario is already priced in.

• Support levels: 1.0181, 1.0106, 1.0035, 1.0000
• Resistance levels: 1.0250, 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 forming a wide balance, and the MACD indicator has become inactive, but the buyers’ pressure remains. Under such market conditions, it is best to look for buy trades on intraday time frames from the support level of 1.0181 or 1.0106, but only with confirmation. Sell trades can be considered from the resistance level of 1.0250 or 1.0284, but only after additional confirmation and only with short targets.

Alternative scenario: if the price breaks down through the 1.0000 support level and fixes below, the downtrend will likely resume.

• – US CB Consumer Confidence (m/m) at 17:00 (GMT+3);
• – US New Home Sales (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.1993
• Prev Close: 1.2046
• % chg. over the last day: +0.44%

Despite gains in recent days, fundamentally, the British currency remains weak as the struggle for the Conservative Party leadership highlights the problems facing the country. The latest data from the US Commodity Futures Trading Commission shows that investors slightly reduced their net short positions in the sterling last week, halting a two-week rise but still keeping the market negative for the pound. As the race for the Prime Minister’s seat intensifies, analysts will be watching today’s televised debate between Foreign Secretary Liz Truss and former Finance Minister Rishi Sunak. Many expect UK policy to increase negative sentiment against the sterling in the coming months.

• Support levels: 1.2000, 1.1907, 1.1803
• Resistance levels: 1.2085, 1.2137

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. Buyers’ pressure has intensified. The MACD indicator is positive again, but there are signs of divergence. Under such market conditions, buy trades are best to look at intraday time frames from the support level of 1.2000, but only with confirmation. Sell trades can be considered from the resistance level of 1.2085, but only after additional confirmation and with short targets.

Alternative scenario: if the price breaks down through the 1.1907 support level and fixes below, the downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 136.09
• Prev Close: 136.65
• % chg. over the last day: +0.41%

According to the monetary policy minutes report, the Bank of Japan expects core consumer prices (excluding food and fuel) in Japan to rise by 2.3% this fiscal year on an annualized basis, mainly due to Russia’s invasion of Ukraine and the impact of yen depreciation. For the fiscal 2023 year, the forecasts are a 1.7% increase in consumer prices. Crude oil and other energy prices are expected to remain high. So, there are no fundamental reasons for the yen to strengthen at the moment, and the decrease in USD/JPY quotes occurs mainly due to the decline in the US Dollar Index.

• Support levels: 135.99, 135.40, 134.64, 134.11
• Resistance levels: 136.60, 137.26, 137.81, 138.25, 138.56, 140.29

From the technical point of view, the medium-term trend on the USD/JPY currency pair is bearish. The price is trading below the moving averages. The MACD indicator is not active. It should be noted that any fundamental factors do not accompany the fall in the USD/JPY quotes, so selling is still a very cautious option. Under such market conditions, buy trades can be searched for intraday from the support level of 135.99, but with additional confirmation. For sell deals, traders can consider the resistance level of 136.60 or 137.26, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes above 138.25, the uptrend will likely resume.

• – Japan Monetary Policy Meeting Minutes (m/m) at 02:50 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.2917
• Prev Close: 1.2846
• % chg. over the last day: -0.55%

The Canadian dollar is a commodity currency, so rising oil prices are strengthening the Canadian currency. The Bank of Canada, as well as the Fed, is on the path of aggressive interest rate increases. The difference between rates is minimal. The Central Bank of Canada holds the rate at 2.5%, while the Fed has a rate of 1.75%. A 0.75% rate hike on Wednesday would put both central banks’ rates at 2.5%. Therefore, traders should not expect a medium-term trend on the USD/CAD currency pair right now.

• Support levels: 1.2781
• Resistance levels: 1.2841, 1.2912, 1.3006, 1.3085, 1.3154

In terms of technical analysis, the trend on the USD/CAD currency pair is bearish. At the moment, the price is forming a balance and trading at the levels of the moving lines. The MACD indicator has become negative again. Under such market conditions, it is best to consider sell deals from the resistance level of 1.2841 or 1.2912, but with confirmation. Buy trades should be considered on the lower time frames from the support level 1.2781, 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.