InvestMacro

The EUR/USD currency pair

• Prev Open: 1.0462
• Prev Close: 1.0583
• % chg. over the last day: +1.15%

The minutes of the European Central Bank’s April monetary policy meeting showed that inflation concerns prompted dovish central bank officials to support a 0.25-point rate hike as early as July. The rest of the representatives favor an immediate 0.5% hike. At the same time, net asset purchases will cease in late June. As the market began to consider the risks of a 0.5% interest rate hike, the euro began to strengthen.

• Support levels: 1.0545, 1.0509, 1.0445, 1.0379, 1.0342
• Resistance levels: 1.0595, 1.0646, 1.0723, 1.0766, 1.0799, 1.0869

From a technical point of view, the trend on the EUR/USD currency pair on the hour timeframe has changed to bullish. The price broke through the priority change level and consolidated above the moving averages. The MACD indicator became positive, but a divergence appeared. Under such market conditions, investors can look for buy trades on intraday time frames from the support level of 1.0545, but only with short targets and confirmation. Sell trades can be considered from the resistance level of 1.0595, but only after the additional confirmation.

Alternative scenario: if the price breaks out through the 1.0445 support level and fixes below, the downtrend will likely resume.

The GBP/USD currency pair

• Prev Open: 1.2335
• Prev Close: 1.2470
• % chg. over the last day: +1.09%

Consumer sentiment in the UK has fallen to its lowest level since 1974. Consumers are increasingly pessimistic about the economy amid a deepening cost-of-living crisis. Investor fears are growing that the UK, like the US, is facing a recession. The inflationary blow to living standards is already forcing consumers to tighten their belts as rising prices for necessities such as food, fuel, and energy are forcing them to cut other costs.

• Support levels: 1.2437, 1.2398, 1.2283, 1.2199
• Resistance levels: 1.2485, 1.2519, 1.2602, 1.2695, 1.2792, 1.2981

On the hourly time frame, the GBP/USD currency pair trend changed to bullish. The MACD indicator became positive, but divergence appeared. Under such market conditions, buy deals may be considered from the support level of 1.2398, but only with additional confirmation. Sell deals should be looked for from the resistance level of 1.2485, but with confirmation in the form of sellers’ initiative.

Alternative scenario: if the price breaks down through the 1.2282 support level and fixes below, the mid-term downtrend will likely resume.

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

The USD/JPY currency pair

• Prev Open: 128.13
• Prev Close: 127.82
• % chg. over the last day: -0.24%

Core consumer inflation in Japan reached a central bank’s target of 2% (2.1% year on year) in April, reaching a seven-year high as rising energy and commodity prices led to wider price increases. Rising prices are exacerbating public concerns about the high cost of living. The Bank of Japan must now respond by pursuing a soft monetary policy to boost the inflation rate. The Japanese yen may be strengthening not only as a safe-haven currency but also because the Bank of Japan may soon abandon its loose monetary policy.

• Support levels: 127.46, 126.91, 126.00, 125.57
• Resistance levels: 127.94, 128.45, 128.73, 129.07, 130.12, 130.99

The medium-term trend on the USD/JPY currency has changed to bearish. The MACD indicator is in the negative zone, and sellers’ pressure prevails, but there are signs of divergence. Buy trades can be considered from the support level of 127.46, but with confirmation. Resistance level of 127.94 may be considered for sell deals, but only with additional confirmation.

Alternative scenario: If the price fixes above 129.07, the uptrend will likely resume.

• – Japan National Core Consumer Price Index at 02:30 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.2885
• Prev Close: 1.2822
• % chg. over the last day: -0.49%

Given the rise in oil prices and the fact that the Bank of Canada will raise interest rates at its next meetings – all of these factors are positive for the Canadian dollar, which has been strengthening in recent days. Currently, the Bank of Canada and the US Federal Reserve hold key rates at 1%. This parity suggests that traders should not expect medium-term trends in the USD/CAD currency pair, as both currencies are inclined to rise now.

• Support levels: 1.2789, 1.2774, 1.2692, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.2858, 1.2859, 1.2953, 1.3000, 1.3052

The USD/CAD currency pair is bearish in terms of technical analysis. The MACD indicator is in the negative zone, but it moves towards zero. At the same time, there is a divergence, which is a sign of sellers’ weakness. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2774, but only with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2826, but also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates above 1.2953, the uptrend will likely resume.

The EUR/USD currency pair

• Prev Open: 1.0545
• Prev Close: 1.0460
• % chg. over the last day: -0.81%

The annual inflation rate in the Eurozone decreased from 7.5% to 7.4%. These are signs that inflation is slowing down. But it is a negative sign for the European currency as the ECB does not need to conduct a more aggressive monetary policy and rush to end its stimulus program. Today the ECB will publish the April minutes of its monetary policy meeting.

• Support levels: 1.0445, 1.0379, 1.0342
• Resistance levels: 1.0515, 1.0545, 1.0587, 1.0646, 1.0723, 1.0766, 1.0799, 1.0869

From the technical point of view, the trend on the EUR/USD currency pair on the hour timeframe is still bearish. The price is balanced now, as it is trading between the moving averages. The MACD is negative again. Under such market conditions, it is possible to look for sell trades from the resistance level of 1.0545, but only after the additional confirmation. Buy trades can be considered on intraday timeframes from the support level of 1.0445, but only with short targets and confirmation.

Alternative scenario: if the price breaks out through the 1.0545 resistance level and fixes above, the uptrend will likely resume.

• – Eurozone ECB Monetary Policy Meeting Accounts at 14:30 (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 Existing Home Sales (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2490
• Prev Close: 1.2337
• % chg. over the last day: -1.24%

The UK Finance Minister Sunak yesterday pointed out that unlimited fiscal stimulus risks exacerbating the inflation problem. In the UK there is an increasing conflict between the government and the Bank of England. The government is criticizing the policy for its inability to curb the rise in inflation rates. With a high probability, the Bank of England will begin to take more decisive action to save its face.

• Support levels: 1.2443, 1.2283, 1.2199
• Resistance levels: 1.2393, 1.2467, 1.2519, 1.2602, 1.2695, 1.2792, 1.2981

On the hourly time frame, the GBP/USD currency pair trend changed to bullish. The MACD indicator became negative, and the price pullbacks to the moving averages. Under such market conditions, buy deals may be considered from the support level of 1.2343 or 1.2283, but only with additional confirmation. Sell deals should be looked for from the resistance level of 1.2467, but with confirmation in the form of sellers’ initiative.

Alternative scenario: if the price breaks down through the 1.2200 support level and fixes below, the mid-term downtrend will likely be resumed.

The USD/JPY currency pair

• Prev Open: 129.40
• Prev Close: 128.24
• % chg. over the last day: -0.90%

More than 60% of Japanese companies want the central bank to end its policy of massive monetary easing this fiscal year because of yen weakness, with about a quarter urging it to take action now. A rapid slide in the yen to a two-decade low has jacked up prices of fuel and raw materials imports, lifting not only corporate costs but also hitting household spending. The Bank of Japan is not going to change its monetary policy yet, but it should be noted that Japan’s inflation rate is close to the 2% target. Now Kuroda wants to see inflation be sustainable.

• Support levels: 128.29, 127.29, 126.91, 126.00, 125.57
• Resistance levels: 128.93, 129.34, 130.12, 130.99

The medium-term trend on the USD/JPY currency has changed to bearish. The Japanese yen is being bought by investors as a safe-haven currency, so the yen is temporarily strengthening. But despite the change in the trend on the hour timeframe, it is better to look for buy deals with the expectation of an uptrend continuation since the Japanese Yen has no fundamental support. First of all, it is worth considering the support level of 128.29, but with confirmation. A resistance level of 129.34 may be considered for sell deals, but only with additional confirmation.

Alternative scenario: If the price fixes above 130.12, the uptrend will likely be resumed.

The USD/CAD currency pair

• Prev Open: 1.2809
• Prev Close: 1.2892
• % chg. over the last day: +0.64%

The growth of consumer prices in Canada showed 0.6% in April. On an annualized basis, the inflation rate reached 6.8%. Most of the price growth was driven by food and housing prices. Core inflation (excluding food and fuel prices) increased from 5.5% to 5.8%. This is the fastest rate of growth since 1999. Russia’s invasion of Ukraine continues to affect energy prices, commodity prices, and primarily food prices.

• Support levels: 1.2826, 1.2774, 1.2692, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.2858, 1.2904, 1.2953, 1.3000, 1.3052

The USD/CAD currency pair trend is bearish in terms of technical analysis. But now the price is balanced, the MACD indicator has become inactive, and the price is trading between the moving averages. It is worth trading only with short targets because, fundamentally, both the dollar index and the Canadian dollar are inclined to grow. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2826, but only with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2858 or 1.2904, but also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates above 1.3000, the uptrend will likely be resumed.

The EUR/USD currency pair

• Prev Open: 1.0434
• Prev Close: 1.0542
• % chg. over the last day: +1.03%

The Consumer Price Index data (inflation rate) will be released today in Europe. Analysts expect the inflation rate to remain unchanged, which will mean a slowdown in inflation in the region. If the data is worse than expected it will be a positive factor for the European currency strengthening on expectations of faster monetary policy tightening.

• Support levels: 1.0491, 1.0445, 1.0379, 1.0342
• Resistance levels: 1.0587, 1.0646, 1.0723, 1.0766, 1.0799, 1.0869, 1.0955

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is close to changing to bullish. The price has consolidated above the moving averages but has not broken through the priority change level. The MACD indicator has become positive, but buyer’s pressure remains high. Under such market conditions, it is possible to look for sell trades from the resistance level of 1.0587, but only after the additional confirmation. Buy trades can be considered on intraday timeframes from the support level of 1.0491 or 1.0445, but only with short targets and confirmation.

Alternative scenario: if the price breaks out through the 1.0588 resistance level and fixes above, the uptrend will likely resume.

• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
• – Eurozone ECB Financial Stability Review at 12:00 (GMT+3);
• – US Building Permits (m/m) at 15:30 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2313
• Prev Close: 1.2492
• % chg. over the last day: +1.45%

The UK inflation rate reached 9.0% on an annualised basis. This is the highest recorded 12-month value since 1997. Monthly inflation increased by 2%. The Producer Price Index, which measures the rate of inflation between factories and plants, rose from 11.9% to 14% y/y. UK consumer prices are approaching a projected peak of 10.25%. The Bank of England needs to take action to suppress inflation. Analysts forecast more aggressive interest rate hikes at the next meetings.

• Support levels: 1.2399, 1.2343, 1.2283, 1.2199
• Resistance levels: 1.2519, 1.2602, 1.2695, 1.2792, 1.2981

On the hourly time frame, the GBP/USD currency pair trend changed to bullish. The MACD indicator became positive, and the buyers’ pressure remains high. Under such market conditions buy deals may be considered from the support level of 1.2343 or 1.2283, but only with additional confirmation. Sell deals should be looked for from the resistance level of 1.2519, but with confirmation in the form of sellers’ initiative.

Alternative scenario: if the price breaks down through the 1.2200 support level and fixes below, the mid-term downtrend will likely be resumed.

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

The USD/JPY currency pair

• Prev Open: 129.14
• Prev Close: 129.34
• % chg. over the last day: +0.15%

Japan’s GDP fell by 0.2% for the quarter, but the data was better than analysts’ expectations of -1.0%. Japanese Economy Minister Yamagiwa believes the slowdown is due to rising commodity prices and supply-side constraints caused by the war in Ukraine and prolonged lockdowns in China. The industrial production rate showed a 0.3% increase last month. This is a significant decrease compared to the 2% growth a month earlier.

• Support levels: 129.02, 127.29, 126.91, 126.00, 125.57
• Resistance levels: 129.74, 130.12, 130.99

The medium-term trend on the USD/JPY currency has changed to bearish. The price has confidently broken through the priority change level and has consolidated below the moving averages. Despite the change in the trend on the hour timeframe, it is better to look for buy deals with the expectation of an uptrend continuation, since the Japanese Yen has no fundamental support. First of all, it is worth considering the support level of 129.02, but with confirmation. A resistance level of 130.12 may be considered for sell deals, but only with additional confirmation.

Alternative scenario: If the price fixes above 130.99, the uptrend will likely be resumed.

• – Japan GDP (q/q) at 02:50 (GMT+3);
• – Japan Industrial Production (m/m) at 07:30 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.2841
• Prev Close: 1.2809
• % chg. over the last day: -0.25%

Canada’s inflation data will be updated today. Analysts are forecasting a monthly inflation increase of 0.5%. If the forecasts are true, Canada’s annualised inflation rate will reach 7.2%, which will be a new multi-year record. Growth in consumer prices is usually accompanied by a strengthening of the national currency in anticipation of more aggressive monetary policy tightening by the central bank.

• Support levels: 1.2808, 1.2774, 1.2692, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.2875, 1.2904, 1.2953, 1.3000, 1.3052

The USD/CAD currency pair trend is bearish in terms of technical analysis. The MACD indicator is in the negative zone, but the bears’ pressure is decreasing, as there are signs of divergence. It is worth trading only with short targets because fundamentally both the dollar index and the Canadian dollar are inclined to grow. Under such market conditions it is better to look for buy trades on the lower timeframes from the support level of 1.2808 or 1.2774, but only with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2875 or 1.2904, but also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates above 1.3000, the uptrend will likely be resumed.

• – Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3).