InvestMacro

The EUR/USD currency pair

• Prev Open: 1.0736
• Prev Close: 1.0678
• % chg. over the last day: -0.54%

The Fed minutes confirmed that most participants are prone to raise rates by 50 basis points at their next two meetings. Concerns were also expressed that it would be difficult to reduce inflation to 2% if inflation expectations remain elevated. Much attention should be paid to today’s US GDP data. In the initial report, the economy unexpectedly contracted by 1.4%, so if today’s data is worse, it could heighten fears of stagflation.

• Support levels: 1.0643, 1.0680, 1.0611, 1.0568, 1.0509, 1.0445, 1.0379, 1.0342
• Resistance levels: 1.0700, 1.0759, 1.0799, 1.0869

From a technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. But the price began to correct, and the MACD indicator became inactive. Under such market conditions, investors can look for buy trades on intraday time frames from the support level of 1.0643, but only with confirmation. Sell trades can be considered from the resistance level of 1.0759 but only after the additional confirmation.

Alternative scenario: if the price breaks out through the 1.0508 support level and fixes below, the downtrend will likely resume.

• – US GDP (q/q) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Pending Home Sales (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2524
• Prev Close: 1.2572
• % chg. over the last day: +0.38%

The UK Consumer Confidence Index is the lowest since 1974. Rising consumer prices are increasing the risks of recession in the British economy. The Bank of England does not deny such a scenario in the next six months but does not intend to act aggressively. Many analysts believe that the Bank of England has already come to terms with the stagflation scenario and does not want to tighten its monetary policy so as not to increase the pressure on the already slowing economy.

• Support levels: 1.2525, 1.2437, 1.2398, 1.2283, 1.2199
• Resistance levels: 1.2602, 1.2695, 1.2792, 1.2981

On the hourly time frame, the GBP/USD currency pair trend is bullish. The MACD indicator is positive, but the divergence is getting stronger, which indicates the weakness of the buyers. Under such market conditions, buy deals may be considered from the support level of 1.2525, but only with additional confirmation. Sell deals should be looked for from the resistance level of 1.2602, but with confirmation in the form of sellers’ initiative.

Alternative scenario: if the price breaks down through the 1.2398 support level and fixes below, the mid-term downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 126.78
• Prev Close: 127.26
• % chg. over the last day: +0.39%

The Producer Price Index, which shows the inflation rate between factories and plants, rose from 1.3% to 1.7% year on year. This is a sign that inflationary pressures are rising throughout the economy. Consumer prices have already reached the 2% target. But the Bank of Japan still adheres to soft monetary policy, arguing that inflation is not yet sustainable. Soft monetary policy weakens the national currency.

• Support levels: 126.25, 125.47
• Resistance levels: 127.53, 128.29, 128.73, 129.07, 130.12, 130.99

The medium-term trend on the USD/JPY currency is bearish. The MACD indicator is in the positive zone, but the buyer’s pressure is weak. Buy trades can be considered from the support level of 126.25, but with confirmation. For sell deals, resistance level of 127.53 may be considered, but only with additional confirmation.

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

The USD/CAD currency pair

• Prev Open: 1.2817
• Prev Close: 1.2817
• % chg. over the last day: 0.00%

The fundamental picture of the USD/CAD currency pair remains the same. The Bank of Canada is on the way to aggressively raising rates, as well as the US Fed. Oil prices have been trading without significant dynamics for the last three trading sessions. Currently, the USD/CAD pair is trading in a wide sideways channel at the moment.

• Support levels: 1.2817, 1.2783, 1.2774, 1.2692, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.2893, 1.2953, 1.3000, 1.3052

The USD/CAD currency pair is bearish in terms of technical analysis. But the price is forming a wide-volatile sideways, which will eventually lead to an impulsive movement. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2817, but only with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2893, 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.

• – Canada Retail Sales (m/m) at 15:30 (GMT+3).

The EUR/USD currency pair

• Prev Open: 1.0687
• Prev Close: 1.0735
• % chg. over the last day: +0.45%

The business activity index in the manufacturing sector and the service sector showed a decline in the Eurozone. The slowdown in activity is attributed to high inflation, rising energy prices, and problems in the supply chain, which has not yet recovered from the Covid restrictions. Some ECB officials have begun saying it was appropriate to raise interest rates by 0.5% (0.25% was previously planned) as early as July. Usually, the ECB is known for its conservatism in aggressive actions, and such statements give confidence to the euro as investors always price in the most aggressive scenario.

• Support levels: 1.0680, 1.0611, 1.0568, 1.0509, 1.0445, 1.0379, 1.0342
• Resistance levels: 1.0766, 1.0799, 1.0869

From a technical point of view, the EUR/USD currency pair trend on the hourly time frame is bullish. The MACD indicator became positive, but the divergence is increasing. Under such market conditions, investors can look for buy trades on intraday time frames from the support level of 1.0680, but only with confirmation. Sell trades can be considered from the resistance level of 1.0766, but only after the additional confirmation.

Alternative scenario: if the price breaks out through the 1.0508 support level and fixes below, the downtrend will likely resume.

• – Eurozone Germany GDP (q/q) at 09:00 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 11:00 (GMT+3);
• – Eurozone ECB Financial Stability Review at 12:00 (GMT+3);
• – US Core Durable Goods Orders (m/m) at 15:30 (GMT+3);
• – US FOMC Member Brainard Speaks at 19:15 (GMT+3).
• – US FOMC Meeting Minutes at 21:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2578
• Prev Close: 1.2534
• % chg. over the last day: -0.35%

The British pound declined sharply yesterday amid PMI data. The manufacturing business activity index fell from 55.8 to 54.6, while the service sector index fell from 58.9 to 51.8. These are clear signs of a slowing economy. The UK is moving towards stagflation (decrease of economic indicators against the background of growing prices), and the Bank of England representatives do not talk about further monetary policy tightening yet, but only allow for another interest rate increase.

• Support levels: 1.2485, 1.2437, 1.2398, 1.2283, 1.2199
• Resistance levels: 1.2559, 1.2602, 1.2695, 1.2792, 1.2981

The GBP/USD currency pair trend is bullish on the hourly time frame. The MACD indicator has become positive, but the divergence is increasing, which indicates the weakness of the buyers. Under such market conditions, buy deals may be considered from the support level of 1.2437, but only with additional confirmation. Sell deals should be looked for from the resistance level of 1.2559, but with confirmation in the form of sellers’ initiative.

Alternative scenario: if the price breaks down through the 1.2398 support level and fixes below, the mid-term downtrend will likely resume.

The USD/JPY currency pair

• Prev Open: 127.88
• Prev Close: 126.85
• % chg. over the last day: -0.81%

The Bank of Japan Governor continues to insist on monetary policy easing, even though Japan’s core inflation rate has reached the 2% target. The Japanese yen has been strengthening recently as a safe-haven currency and also on the back of a declining dollar index. However, the fundamental picture is now in favor of USD/JPY quotes increasing, as the monetary policies of the US and Japanese central banks are diametrically opposite.

• Support levels: 126.25, 125.47
• Resistance levels: 127.19, 127.53, 128.29, 128.73, 129.07, 130.12, 130.99

The medium-term trend on the USD/JPY currency is bearish. The MACD indicator is in the negative zone, but sellers’ pressure is getting weaker, and divergence is increasing. Buy trades can be considered from the support level of 126.25, but with confirmation. For sell deals, resistance level of 127.53 may be considered, but only with additional confirmation.

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

• – Japan BoJ Governor Kuroda Speaks (Tentative).

The USD/CAD currency pair

• Prev Open: 1.2766
• Prev Close: 1.2820
• % chg. over the last day: +0.42%

The fundamental picture of the USD/CAD currency pair remains the same. The Bank of Canada is on the path of an aggressive rate hike, as well as the US Fed. The decline in oil prices over the past two days has weakened the Canadian currency a little, as it is a commodity currency. At the moment the USD/CAD currency pair is trading in a wide price corridor.

• Support levels: 1.2812, 1.2783, 1.2774, 1.2692, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.2893, 1.2953, 1.3000, 1.3052

The USD/CAD currency pair is bearish in terms of technical analysis. The MACD indicator has become positive, and the buyer’s pressure is slowly increasing. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2812, but only with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2893, 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.

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

The EUR/USD currency pair

• Prev Open: 1.0561
• Prev Close: 1.0691
• % chg. over the last day: +1.23%

ECB head Christine Lagarde said that they would start to normalize their monetary policy. The bond-buying program will be completed at the beginning of the third quarter. The interest rate will probably be raised closer to the end of the third quarter of 2022. If the ECB sees inflation stabilizing at 2% in the medium term, a gradual further normalization of interest rates to neutral rates would be appropriate. But the speed of the policy adjustment and its ultimate point will depend on how the medium-term inflation outlook evolves.

• Support levels: 1.0611, 1.0568, 1.0509, 1.0445, 1.0379, 1.0342
• Resistance levels: 1.0696, 1.0723, 1.0766, 1.0799, 1.0869

From a technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. The MACD indicator became positive, but the divergence is increasing. Under such market conditions, investors can look for buy trades on intraday time frames from the support level of 1.0611, but only with confirmation. Sell trades can be considered from the resistance level of 1.0723, but only after the additional confirmation.

Alternative scenario: if the price breaks out through the 1.0508 support level and fixes below, the downtrend will likely resume.

• – US FOMC Member George Speaks at 02:00 (GMT+3);
• – Eurozone French Manufacturing 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);
• – US Fed Chair Powell Speaks at 19:20 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 21:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2471
• Prev Close: 1.2586
• % chg. over the last day: +0.92%

Bank of England Governor Andrew Bailey said yesterday that the BoE is ready to raise interest rates if necessary. The UK is facing a huge negative impact on the real incomes of citizens caused by rising prices of imported goods, especially energy. Analysts are predicting another interest rate hike as soon as the next meeting.

• Support levels: 1.2485, 1.2437, 1.2398, 1.2283, 1.2199
• Resistance levels: 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 1.2485, but only with additional confirmation. Sell deals should be looked for from the resistance level of 1.2602, but with confirmation in the form of sellers’ initiative.

Alternative scenario: if the price breaks down through the 1.2398 support level and fixes below, the mid-term downtrend 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: 127.87
• Prev Close: 127.88
• % chg. over the last day: +0.01%

Manufacturing activity in Japan grew at its slowest pace in the last three months in May as supply bottlenecks due to parts shortages and blockages in China due to Covid-19 led to slower growth in production and new orders. Japan’s manufacturing PMI index fell to 53.2 from 53.5. Going below 50 would be a sign of stagnation in the sector.

• 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 is bearish. The MACD indicator has become inactive, sellers’ pressure is weakening, and there are signs of divergence. Buy trades can be considered from the support level of 127.46, but with confirmation. For sell deals, resistance level of 128.45 may be considered, but only with additional confirmation.

Alternative scenario: If the price fixes above 129.07, the uptrend 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: 1.2835
• Prev Close: 1.2769
• % chg. over the last day: -0.05%

The fundamental picture of the USD/CAD currency pair remains the same. The Bank of Canada is on the way to aggressive rate hikes, as well as the US Federal Reserve. But unlike the US, Canada has no signs that its economy is slowing down. Growth in energy prices gives confidence to the Canadian dollar because it is a commodity currency, but on the other hand, it leads to an increase in domestic fuel prices, which leaves some negative consequences for the economy. At the moment, both the Canadian dollar and the American dollar are inclined to rise, so investors should trade only short-term trends on this currency pair.

• Support levels: 1.2783, 1.2774, 1.2692, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.2826, 1.2859, 1.2953, 1.3000, 1.3052

The USD/CAD currency pair is bearish in terms of technical analysis. The MACD indicator has become inactive, while 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 1.2783, 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.