InvestMacro

The EUR/USD currency pair

• Prev Open: 1.0553
• Prev Close: 1.0529
• % chg. over the last day: -0.23%

Today, investors and traders will closely monitor the April US Consumer Price Index for any signs that inflation may begin to cool off. Analysts expect annual inflation to fall to 8.1% (current level – 8.5%). Investors’ attention will also be focused on the inflation level in Germany, where analysts expect to see prices rise by 0.8%.

• Support levels: 1.0535, 1.0453
• Resistance levels: 1.0588, 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 still bearish. The price forms a wide price corridor, the MACD indicator has become inactive, and volatility is reduced in anticipation of inflation data. Such narrowing of liquidity usually leads to sharp impulse movements. Under such market conditions, traders can look for sell deals from the resistance level of 1.0646, but only after the additional confirmation. Buy trades can be considered on intraday timeframes from the support level of 1.0453, but only with short targets and confirmation.

Alternative scenario: if the price breaks out through the 1.0723 resistance level and fixes above, the uptrend will likely resume.

• – US FOMC Member Bostic Speaks at 02:00 (GMT+3);
• – German Consumer Price Index (m/m) at 09:00 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 11:00 (GMT+3);
• – US Consumer Price Index (m/m) at 15:30 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2329
• Prev Close: 1.2315
• % chg. over the last day: -0.11%

The British pound has lost ground against the euro, where the ECB has not yet raised interest rates. This means that the Bank of England is losing control, as the Bank of England has already raised interest rates three times, while the ECB will raise rates only in the second half of the year. Bank of England spokesman Michael Saunders said yesterday that UK inflation is expected to peak at 9% annually. Analysts believe that the Bank of England failed in its forecasting and completely misinterpreted the causes of high inflation.

• Support levels: 1.2276, 1.2127
• Resistance levels: 1.2450, 1.2519, 1.2602, 1.2695, 1.2792, 1.2981, 1.3010, 1.3114

On the hourly time frame, the GBP/USD currency pair trend is still bearish. The price forms a wide price corridor, the MACD indicator has become inactive, and trading activity has decreased. Such liquidity narrowing, as a rule, leads to sharp impulse movements. Under such market conditions, sell trades should be looked for from the resistance level of 1.2450 or 1.2519 intraday. For buy deals, traders may consider the level of 1.2127 if the price continues to decrease after the inflation data.

Alternative scenario: if the price breaks down through the 1.2695 resistance level and fixes above, the mid-term uptrend will likely be resumed.

The USD/JPY currency pair

• Prev Open: 130.24
• Prev Close: 130.43
• % chg. over the last day: +0.15%

The Bank of Japan’s prolonged stimulus program has been increasingly criticized for fueling an unwanted yen drop. Investors are paying attention to the widening gap between ultra-low interest rates in Japan and rising rates in other major economies. The Bank of Japan’s ultra-soft policy allows the government to support huge spending despite Japan’s growing national debt. But the country’s inflation rate is already approaching the 2% target, so analysts believe that the soft monetary policy is close to ending.

• Support levels: 129.42, 128.55, 127.29, 126.91, 126.00, 125.57
• Resistance levels: 130.99

The medium-term trend on the USD/JPY currency pair is still bullish. The price is forming a wide price corridor, and the MACD indicator has become inactive. With a high probability, the situation will not change before the inflation data. Under such market conditions, it is best to look for buy deals, expecting the continuation of the uptrend. First of all, it is worth considering the support level of 129.42. A resistance level of 130.99 may be considered for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes below 128.55, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.3012
• Prev Close: 1.3028
• % chg. over the last day: +0.12%

The Canadian dollar is a commodity currency and is highly dependent not only on the monetary policy of the Bank of Canada but also on the dynamics of the dollar index and oil prices. Oil prices continue to fall as tighter quarantine measures in Shanghai continue to raise demand concerns. This is negatively affecting the Canadian dollar.

• Support levels: 1.2992, 1.2838, 1.2908, 1.2774, 1.2692, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.3044

The USD/CAD currency pair is bullish in terms of technical analysis. The price has reached the daily resistance level. The MACD indicator is in the positive zone, but the divergence of higher time frames is increasing. Trade is worth it 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 1.2992, but only with additional confirmation. For sell deals, it is better to consider the resistance level of 1.3044, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below 1.2693, the downtrend will likely be resumed.

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

The EUR/USD currency pair

• Prev Open: 1.0539
• Prev Close: 1.0558
• % chg. over the last day: +0.18%

Federal Reserve official Bostic said yesterday that he sees 2 to 3 rate hikes of 50 basis points in the next meetings of the Committee. Meanwhile, analysts have already estimated the probability of a 75 basis point interest rate hike at the upcoming Fed meeting on June 14-15 at 79% (yesterday it was 75%). Such sentiments are actively pushing the dollar index up. Today the European Research Institute ZEW will publish an economic sentiment index in Germany and the Eurozone. Analysts expect a further decline in business activity in the region.

• Support levels: 1.0535, 1.0453
• Resistance levels: 1.0588, 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 still bearish. The price forms a wide corridor, the MACD indicator has become positive, and the buyers’ pressure increases. Under such market conditions, traders can look for sell deals from the resistance level of 1.0646, but only after the additional confirmation. Buy trades can be considered on intraday timeframes from the support level of 1.0535, but only with short targets and confirmation.

Alternative scenario: if the price breaks out through the 1.0723 resistance level and fixes above, the uptrend will likely resume.

• – German ZEW Economic Sentiment at 12:00 (GMT+3);
• – Eurozone ZEW Economic Sentiment at 12:00 (GMT+3);
• – US FOMC Member Williams Speaks at 14:40 (GMT+3);
• – US FOMC Member Bostic Speaks at 15:30 (GMT+3);
• – US FOMC Member Waller Speaks at 20:00 (GMT+3);
• – US FOMC Member Mester Speaks at 22:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2345
• Prev Close: 1.2329
• % chg. over the last day: -0.13%

The Bank of England should follow the Fed’s example and aggressively raise interest rates. Otherwise, the UK will face stagflation (slowing economic growth and declining GDP on the back of rising consumer prices). Analysts believe that if the Bank of England does not act decisively now, the UK will face a significant economic decline in the second half of the year. At the same time, economic surveys and studies already show that ordinary consumers have begun to save significantly due to a sharp jump in prices for almost all types of goods and services.

• Support levels: 1.2336, 1.2127
• Resistance levels: 1.2450, 1.2519, 1.2602, 1.2695, 1.2792, 1.2981, 1.3010, 1.3114

On the hourly time frame, the GBP/USD currency pair trend is still bearish. The price forms a wide corridor, the MACD indicator has become positive, and the buyer’s pressure increases. Under such market conditions, sell trades should be looked for from the resistance level of 1.2450 intraday. For buy deals, traders may consider the level of 1.2336, but only with short targets and after confirmation in the form of buyers’ initiative.

Alternative scenario: if the price breaks down through the 1.2695 resistance level and fixes above, the mid-term uptrend will likely be resumed.

The USD/JPY currency pair

• Prev Open: 130.50
• Prev Close: 130.32
• % chg. over the last day: -0.14%

In Japan, there are signs of price pressures on households. On a seasonally adjusted monthly basis, spending increased by 4.1% in March. It’s the first increase in three months. At the same time, rising living costs are putting the brakes on business activity. These are signs of rising inflation. The Bank of Japan, through its ultra-soft monetary policy, has planned to raise the inflation rate to the 2% target level, and it is likely to do so soon. However, as long as there is no talk of stopping the stimulative monetary policy, the Japanese yen will continue to weaken.

• Support levels: 129.42, 128.55, 127.29, 126.91, 126.00, 125.57
• Resistance levels: 130.58, 130.99

The medium-term trend on the USD/JPY currency pair is still bullish. The price forms a wide corridor, the MACD indicator has become negative, and sellers’ pressure increases. Under such market conditions, it is best to look for buy deals, expecting the continuation of the uptrend. First of all, it is worth considering the support level of 129.42. A resistance level of 130.99 may be considered for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes below 128.55, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2901
• Prev Close: 1.3013
• % chg. over the last day: +0.87%

The Canadian dollar is a commodity currency and is highly dependent not only on the monetary policy of the Bank of Canada but also on the dynamics of the dollar index and oil prices. The OPEC+ Alliance of Oil Exporters agreed at its monthly meeting to increase nominal production by 432,000 barrels per day, but this is well below the projected summer oil demand. This situation led to a sharp drop in oil prices yesterday, negatively impacting the Canadian dollar.

• Support levels: 1.2838, 1.2908, 1.2774, 1.2692, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.3019

The USD/CAD currency pair is bullish in terms of technical analysis. The price has reached the daily resistance level. The MACD indicator is in the positive zone, but the divergence of higher timeframes is increasing. Trade is worth it 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 1.2838, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.3019, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below 1.2693, the downtrend will likely be resumed.

The EUR/USD currency pair

• Prev Open: 1.0540
• Prev Close: 1.0545
• % chg. over the last day: +0.05%

According to European Central Bank President Christine Lagarde, stagflation is not the most likely economic outcome for the Eurozone, although the war in Ukraine is slowing growth and accelerating inflation. ECB officials are still determined to continue normalizing monetary policy, and many remain open to the possibility of a first interest rate hike in July. Lagarde also added that net asset purchases should end early in the third quarter based on available data. Asked about interest rates, the ECB President said officials would keep “all options open” and move forward gradually.

• Support levels: 1.0453
• Resistance levels: 1.0566, 1.0633, 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 still bearish. The price has dropped below the moving averages, and the MACD indicator has become negative. Under such market conditions, traders can look for sell deals from the resistance level of 1.0566, but only after the additional confirmation. Buy trades can be considered on intraday timeframes from the support level of 1.0453, but only with short targets and confirmation.

Alternative scenario: if the price breaks out through the 1.0770 resistance level and fixes above, the uptrend will likely resume.

• – US FOMC Member Bostic Speaks at 15:45 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2356
• Prev Close: 1.2326
• % chg. over the last day: -0.24%

Bank of England officials expect a serious economic slowdown in the second half of the year while inflation rises. At the same time, they plan to raise the interest rate to 2.5%, with inflation at 7.0%. To curb inflation, the interest rate must be either at the same level as inflation or 1%. As a result, the UK economy will likely face a slowdown, and inflation has not even reached its peak. Investors understand this, so the British pound is under selling pressure, especially when the dollar index rises.

• Support levels: 1.2293, 1.2127
• Resistance levels: 1.2450, 1.2519, 1.2602, 1.2695, 1.2792, 1.2981, 1.3010, 1.3114

On the hourly time frame, the GBP/USD currency pair trend is still bearish. The MACD indicator became negative, selling pressure remained high, but divergence appeared. Under such market conditions, sell trades should be looked for from the resistance level of 1.2450 intraday. For buy deals, traders may consider the level of 1.2127, but only with short targets and after confirmation in the form of buyers’ initiative.

Alternative scenario: if the price breaks down through the 1.2695 resistance level and fixes above, the mid-term uptrend will likely be resumed.

The USD/JPY currency pair

• Prev Open: 130.18
• Prev Close: 130.53
• % chg. over the last day: +0.27%

At the last monetary policy meeting, the Bank of Japan announced it would continue its easing policy to manage the economy. At the same time, Kuroda said he would leave interest rates unchanged and continue the asset purchase program. The fundamental picture of the USD/JPY currency pair remains unchanged. The monetary policy of the central banks of the United States and Japan is still at different poles, contributing to the growth of USD/JPY quotes in the medium term. Therefore, any pullback should be used as a buying opportunity. But inflation in Japan is rising slowly and is approaching the 2% target. As soon as the country’s inflation rate reaches 2%, the Bank of Japan will abandon its ultra-soft monetary policy.

• Support levels: 130.57, 129.42, 128.55, 127.29, 126.91, 126.00, 125.57
• Resistance levels: 131.24

The medium-term trend on the USD/JPY currency pair is still bullish. The MACD indicator has become positive, and the buying pressure has increased. Under such market conditions, it is best to look for buy deals, expecting the continuation of the uptrend. First of all, it is worth considering the support level of 130.57. A resistance level of 131.24 may be considered for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes below 128.55, the uptrend will likely be broken.

• – Japan Monetary Policy Meeting Minutes at 02:50 (GMT+3);
• – Japan Services PMI (m/m) at 03:30 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.2827
• Prev Close: 1.2907
• % chg. over the last day: +0.62%

Canada’s unemployment rate fell to 5.2% in April, the lowest level since 1976. Economists and policymakers expect job creation to slow as employment is already well above the pre-pandemic level. The imbalance between supply and demand for jobs is the main reason why the Bank of Canada is tightening its monetary policy. Analysts believe that the Bank of Canada will continue to raise interest rates in the coming months aggressively.

• Support levels: 1.2908, 1.2774, 1.2692, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.3033

In terms of technical analysis, the USD/CAD currency pair is bullish. The price forms a wide price corridor, but buyer pressure prevails. The MACD indicator is in the positive zone, but the divergence of higher timeframes is increasing. Trade is worth it 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 1.2908, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.3033, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below 1.2693, the downtrend will likely be resumed.